Agricultural Production in Australia: Impact of Recent Drought

Running head: ECONOMICS FOR BUSINESS
Higher-Education Faculty
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ECONOMICS FOR BUSINESS1
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Student name/s Student number Signature
Melbourne - 185 Spring Street, Melbourne Australia 3000, Telephone: [phone], Facsimile: [phone]
Sydney - Level 6, 91 York Street, Sydney Australia 2000, Telephone: + 61 2 9299 1400, Facsimile: [phone]
Holmes Commercial Colleges (Melbourne) Ltd ABN 50 005 085 585 Email: [e-mail] Website: www.holmes.edu.au

ECONOMICS FOR BUSINESS2
Executive Summary
The report primarily aims to discuss agricultural production in Australia with special
reference to the impact of recent drought. Agriculture is one of three main sectors of the
economy. Production of agricultural commodities is largely dependent on climatic
condition. Agricultural production is largely vulnerable to extreme climatic condition.
Drought defines a natural calamity when a region suffers from lack of rainfall. Hot dry
summer in Australia has wiped away moisture of soil in almost every state and union
territory. Water storage has declined to an extremely low level. The impact of current
drought is more severe in some states compared to others. Continuous lack of rainfall
hampers agricultural production resulting in a decline in farmers’ income which in turn
adversely affects overall health of the economy. Analysis has found that production of
agricultural commodities has increased significantly in the last 20 years. The marker
structure of agricultural commodities is close to perfectly competitive market. The drought
has a severe impact on agricultural production as well as the economy as a whole. In
order to reduce severity of the impact government should take necessary policy measures.

ECONOMICS FOR BUSINESS3
Table of Contents
Introduction............................................................................................................................4
Background of the industry....................................................................................................4
Market structure of agriculture...............................................................................................6
Recent drought in Australia...................................................................................................6
Analysis of the impact of drought...........................................................................................7
Impact of drought on agricultural production......................................................................7
Impact on Australian economy...........................................................................................8
Government Policy.................................................................................................................9
Conclusion...........................................................................................................................10
References...........................................................................................................................11