Australian Agriculture Industry Assessment 2022

Australian Agriculture
Industry

Details Of The Industry
 One of the largest industries in Australia
 Contributes 3% to the GDP of the country
 Key products are wheat, wool, beef and wine
 Other important products are molasses, honey, horticulture and viticulture products
 The industry contributes around $10 billion to the economy of the country
(Tradingeconomics.com 2019)

Details Of The Industry
 48.2% of land is allocated for agriculture purpose (Data.worldbank.org. 2019)
 6% land is fertile and suitable for crop production
 One of the largest employer of the country
 Employs 228,372 persons (Agriculture.gov.au. 2019)
 Australia is leading exporter of wheat, beef, wine and wool

Details Of The Industry
 Australia is the 5th largest exporter of wine in the world
 In Australia, the agriculture industry is among the top 3 industries in the world
 The agriculture industry from earns more than $40 billion from the export sector of the
country
 The agriculture industry is suffering from various issues and drought is one of the
prime reasons

Market Structure
 Many sellers and many buyers
 Heterogeneous products with no uniqueness
 All the products are different from each other even if they come under the same
category
 Sellers has low power over the market

Market Structure
 Firms can only influence the market of same products but not the entire industry
 Firms earn more profit than the firms in perfectly competitive market
 The demand curve of the industry is much flatter than the demand curve in monopoly
market
 The market structure of the industry is monopolistic competition

Drought 2018-2019 In Australia
 Most severe drought of the decade
 In the east coast region of Australia 49% of land become unsuitable for cultivation
 Wheat production fell by 23% (Time 2019)
 Export of wheat fell by 18%
 12% of total domestic demand for wheat has been imported

Drought 2018-2019 In Australia
 Water stored in dams reduced by 50%
 The production of winter crops fell
 The impact of drought is still persisting in the country
 The agricultural production of the country fell by 15%
 The share of agriculture industry in the GDP of Australia reduced

Other Issues Of The Industry
 Low soil fertility of the agricultural lands in Australian agriculture industry
 Water required for irrigation of agriculture fields are scarce
 Lowering availability of workers for agriculture industry
 No genetic modification of grains is permitted in Australia
 Threats of agriculture product diseases from the imports of animals and foods

Other Issues Of The Industry
 Depreciating domestic currency of Australia
 Political distrust among the farmers and they do not believe the parliamentarians
 Low export demand for agriculture products of Australia
 Persisting effect of drought hampering the industry

Impact Of Issues
 Low productivity of the agriculture industry
 Low revenue for the sellers
 Thus revenue of the industry is low and thus income of people associated with it is
low too
 Low aggregated demand of eh economy
 Slowing economic condition of the economy

Impact Of Issues
 Increased unemployment in the economy due to contraction of the industry
 Low aggregate demand occurred giving rise low price level and thereby low inflation
 Economic slowdown of Australia
 No new variety of product is developing in the agriculture industry of Australia

Policy Suggestions
 Building more water catchments in order to hold more water for irrigation
 Providing subsidies to farmers during the period of drought
 Encourage workers for joining the agriculture industry by providing industry exclusive
benefits
 Allocation more fertile lands to agriculture industry
 More investment in R&D for agriculture industry

Policy Suggestions
 Implementation of the policies would improve the agriculture industry
 The main problem that arises due to the agriculture industry issues has affected the
supply side factors
 The supply side factors are workers, land for cultivation and available amount of water
for irrigation
 Low yield of existing variety of crops

Policy Suggestions
 More water catchments means more water and that will mitigate the problem of
irrigation
 The productivity of the agriculture industry rises
 More the investment in R&D of crops more will new its development
 The yield of the crops will increases and growing period will decrease

Policy Suggestions
 Social and financial benefits to the workers of the agriculture industry provided by the
government in order to incentivize workers would encourage workers to join the
industry
 Allocation of more land to the agriculture industry will increase the total land of the
industry
 The production of the agriculture industry will further increase owing to increased land

References
 Agriculture.gov.au. (2019). [online] Available at:
http://www.agriculture.gov.au/abares/Documents/snapshotaustraliasagriculturalworkfo
rce20181213_v1.0.0.pdf.
 Data.worldbank.org. (2019). Agricultural land (% of land area) | Data. [online] Available
at: https://data.worldbank.org/indicator/AG.LND.AGRI.ZS?locations=AU.
 Time. (2019). https://time.com. [online] Available at:
https://time.com/longform/australia-drought-photos/
 Tradingeconomics.com (2019). Australia GDP From Agriculture | 2019 | Data | Chart |
Calendar | Forecast . [online] Available at: https://tradingeconomics.com/australia/gdp-
from-agriculture

Thank You