Economics and International trade assignment

Industry Reforms, Agriculture 1
Economics and International Trade
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Industry Reforms, Agriculture 2
INTRODUCTION
Notably, the Australian agriculture industry contribution to the country’s 2016-17 gross
domestic product has largely improved. The Australian agriculture industry contributed 0.9
percent out of the 1.9 percent growth rate (Johnson 2017).Over the years, there has been
profound changes in the Australian agricultural industry. The reforms have positively and
negatively impacted the Australian agricultural performance. The Australian government
commitment to the growth of the agricultural industry cannot go unnoticed due to the financial
subsidies, financial and technical support through drought support initiatives and favorable tax
benefits to farmers. Through several legislations and agreements the Australian government has
positively brought changes into the economic livelihood of its farmers. Through government
financing of research and development initiatives, there is development of innovative farming
practices which have made the agricultural produce more productive, efficient and
competitive .However, not all changes have made the agricultural industry in Australia such as
tax exclusivity of large farming businesses in some areas.
Currently, small Australian farmers enjoy more taxation benefits as opposed to large scale
farming businesses. Recently, the Australian government made an agreement with the United
States of America as to a mutual recognition of food safety standards. This food and security
agreement has strengthened the trading relationship between Australia and United States of
America and made it more efficient. Mutual recognition of food safety standards between the
two countries is a show of confidence in the agricultural produce between the two countries thus
boosting sales and saving inspection of export procedures. Also, modern legislative instruments
have been implemented in the agriculture sector regarding exportation which offers safeguards
towards modern challenges such as pests and diseases. In addition, the demand for Australian

Industry Reforms, Agriculture 3
agricultural produce has increased the production level for agricultural produce thereby
increasing the revenue for Australian government and farmers. Largely, the Agricultural sector
reforms have been positive as opposed to negative.
INDUSTRY REFORMS
Notably, the Australian agriculture industry has experienced some taxation policy
changes over the years. Through taxation cuts, farmer’s profits are likely to increase.
Typically ,the higher the taxation bracket, the less profit farmers make due to the high taxable
income rates(Vidot 2017).In the year 2015,small sized farming business were the beneficiaries of
a taxation cut. For small sized businesses with an annual turnover of below two million dollars,
there was a substantial taxation relief bracket.in the instant case, large sized farming businesses
do not get to enjoy the taxation uplift due to the fact that their annual turnover are likely to be
above two million dollars annually. While it is a gain for small businesses, large farm businesses
are not beneficiaries. Moreover, the small farmer businesses in Australia are eligible to future
taxation refunds (Marshall 2015).In addition to the tax relief being offered to small farm
businesses, the tax applies to specified farm plants and equipment which is a limited application.
This selective application of tax reprieves makes the effect selective rather than general.
According to the 2017 White Competitiveness paper, changes are in motion for the
Australian agricultural sector. Specifically, the Australian government seeks to reform its water
infrastructure .The water industry reform is due to fact that the water infrastructure has been
aging over the years .Particularly ,the government of Australia allocated $300 million towards a
water infrastructure recon structuring. There changes are being financed by the National water

Industry Reforms, Agriculture 4
infrastructure Fund to facilitate agricultural purpose of the water infrastructure (Vidot 2017).The
water infrastructure reforms are expected to boost agricultural production (Pittar N. d).Through
the ACCC, the Australian government is implementing fair trading practices for its farmers and
encouraging agricultural competitiveness among its domestic farmers and the global trading
partners. The ACCC is responsible for facilitative programs to boost the agricultural produce
quality, efficiency and productivity among its farmers. Under the Competitiveness agenda, the
agriculture industry is likely to benefit from the funding allocations that are likely to make
innovative practices and techniques for farming thus increasing the desirability of Australian
agricultural produce.
Further changes have taken place in the Australian dairy market. The Australian dairy
sectors was deregulated in the year 2000(Department of foreign trade and Affairs
N .d).Australian dairy producers are subject to market forces due to the reduced government
intervention in the sector. The Australian dairy farming industry has managed to sustain itself
much better after the deregulation and it is considered more sustainable. Moreover, there has
been current legislative reforms in the Agriculture industry. Particularly, the is the export control
bill which was introduced in the year 2017.The piece of legislation is aimed at making the
Australian export platform adequate in handling changing exportation landscape at the global
level. The bill also seeks to streamline the export sector of the economy making it more efficient
and responsible to the current market changes (Department of Agriculture and Water Resources
N. d).The fact that the sector regulation has taken into account the modern economic changes
and challenges of globalization makes the agriculture sector more efficient and functional.
In addition, the Australian government had to financially bail out dairy farmers in the
adjustment assistance program. The process led to some dairy farmers leaving the dairy industry

Industry Reforms, Agriculture 5
while other farmers acquired more land for dairy farming services (Harris N. d).Primarily, the
bailout of some of the dairy farmers took place in the year 2000.This adjustment phase caused a
revenue reduction from the sector due to the reduced number of dairy farmers affected by the
buyout. In addition to reduced dairy income, there was massive job losses for the case of dairy
farms which were sold out. The prices in dairy products were unstable for a while due to the
uncertainty period that faced the dairy sector for a period of time. The uncertainty of the future of
the dairy industry was faced by reduced financial contribution. The adjustment phase was
characterized by reduced number in dairy farmers, reduced volume in dairy products for a given
period of time. Also, dairy farmers faced tough economic times due to the reduced income
following the adjustment phase.
With the implementation of the export control legislation, the Australian farmers and
exporters will be shielded from exploitative practices. Also, the export laws will help to boost the
revenue for Australian farmers engaged in exportation activities. The current exportation
legislative framework are not adequate and responsive to the current challenges being raised by
the globalization. The new piece of legislation in that it is implemented, farmers will have a
stronger supportive business environment. This is because the new bill has taken into account the
current economic conditions under which exportation of goods and services takes place. In an
effort to make the Australian agricultural produce to boost its export sales, the government has
marketed its agricultural produce through advertising and production investments. The export
performance of the Australian economy depends on the marketing and advertisement initiatives
of the Australian government on various forums. To boost its export volume, the Australian
government has provided subsidies for its agricultural produce (Gray, Emer & Sheng 2014).

Industry Reforms, Agriculture 6
In addition to the debated export control legislation, the Australian government has
implemented the Biosecurity Act. The Act came into force in the year 2015.Prior to the
enactment of the Biosecurity Act, there was the Quarantine Act whose function were similar.
However, the Biosecurity Act provides a contemporary approach to biosecurity. The Act
provides for the protection of Australian agricultural produce from potential threats of pests and
diseases form external sources, through importation (Department of Agriculture and Water
resources N .d).Under the new Biosecurity Act seeks to produce a balance between strict
protective measures from disease and pests and trading relations at the international level. The
Act seeks to protect farmers from additional costs for pest and disease control while keeping
them in business through laid down procedures to ensure safe trade practices while importing
and exporting agricultural produce. There is need for governments to protect their produce from
external threats of pests and diseases while promoting international trade. This biosecurity has
shielded farmers from imported diseases and pests thus increased production and revenue for
farmers.
Moreover, the Australian government has implemented price supporting schemes for its
vulnerable agricultural produce. Namely, the tobacco industry has received price support
mechanisms to boost its production and performance .Through price support systems, struggling
sectors of the economy are able to sustain themselves. The price support system of the tobacco
industry increased its production and revenue for tobacco farmer’s .In addition, employment
opportunities were saved by the tobacco sector assisted price mechanism .Also, financial aid has
been boosted into the agriculture sector through financial and technical assistance implemented
under the drought policy programs. This drought based programs equip farmers with the skills,
finances and technical expertise to farm during and after drought spells in the country(Vidot

Industry Reforms, Agriculture 7
2017).However, the has been reduced government financial aid over the agricultural
sector(Farmers.Org 2017).
Remarkably, the Australian agriculture research and development capabilities are among
the best in the world .Further, there has been increased government investment in agriculture
based research and development. The Australian government commitment for research has been
demonstrated by the financial allocations to the Australian research and development corporation
among other agri-based research initiatives. The Australian agriculture sector has made various
innovative farming techniques and practices which have contributed to the high production and
quality of agricultural produce (Department of Foreign affairs and trade N. d).Particularly, there
was $180.5Milion dollars as a competitive grants program package to promote the development
of innovative farm techniques and equipment. Due to the nature of agricultural produce and its
potential to harm the environment ,research has been encouraged and has borne fruit through the
development of organic ways of farming which are efficient and environment
friendly(Department of agriculture and Water Resources N. d).
Notably, the Australian research and development capabilities have made a mark in the
modern innovative farming techniques and equipment .Owing to the innovative ways of farming,
the volume of agricultural produce has increased in Australia (White 2017).Due to increased
production volume of agricultural produce, the export revenue for Australia has doubled over the
years .Also, technological advances have increased the quality of Australian agricultural
produce. Typically ,high quality products provide a competitive edge for products and the case
is no different in the case of Australian agriculture produce quality which has increased over the
years(Langridge 2014).Through innovative ways of production, the has been a productivity and
quality increase in the Australian agricultural produce in terms of exportation quality and volume

Industry Reforms, Agriculture 8
.Innovatively, Australian innovative efforts have given rise to agbots(robots) which are
essentially robots for the agricultural sector(How Agricultural robots…2018).Due to
technological progress, agriculture based robots and machines have been developed hence better
performance in the Australian agricultural sector.
Despite the efficient, productivity and competitive merits of innovative farming ways,
such as robots, drones, there are negative consequences. Unemployment has befallen some
farmers and agriculture laborers due to modern inventions which can perform their function
faster .Some farmers have replaced human labor with drones and agbots which had increased the
unemployment level in the country and negatively impacted the economic livelihood of former
agricultural laborers. However, agbots are a perfect substitute for the aging skilled farmers (SBS
News 2018).This incorporation of agbots and drones among other technologically advanced
practices and equipment has increased the quality, volume of production for agricultural produce
thus leading to increased government and farmer revenue over the years (Government of
Australia N.d).Despite the revenue surge, the risk of massive loss for employment opportunities
in the agriculture sector has created missed reactions among some farmers .Some laborers have
lost their source of income due to the incorporation of modern farming techniques such as drones
by their employers.
Subsequently, for crops requiring picking of leaves such as tea leaves, some global
laborers have lost their employment to machines. Also, the development of biotechnology,
cloning, biogenetics has made the production of better and increased quality of agricultural
produce in Australia and globally .Predominantly, biological, material and seasonal forecast
technologies have been developed and have made the farming process faster, efficient and
competitive in nature (Government of Australia N .d).Among Australis’s notable research center

Industry Reforms, Agriculture 9
is the CSIRO among other research based institutions. Recent contractual changes have been
made to the standard contract for small sized farming business regarding technological
advancements. Australian farmers who invent or have rights to digital technology and other
inventions have received increased legislative protection through the “terms of use” mandatory
requirement for such contractual relations(Wiseman 2016).This mandatory agreement has been
implemented since the year 2016 to promote and protect innovation of digital farming techniques
and equipment.
Additionally, the increased demand for Australian agricultural produce has increased its
revenue and production base (Ferguson 2018).The Chinese economy and the Asian region are
some of the largest exporters of Australian agricultural produce. According to the principles of
Economics by laws of demand, an increase in price is equal to an increase in price for goods and
services thus increased revenue for the producers(Mcliver & Bajada,2003). Accordingly, the
demand for Australian agriculture produce has created increased income for the Australian
farmers due to the increased demand and supply of its agricultural produce (Ferguson
2018).Alongside the growth of market demand for the Australian agriculture programs ,the
productivity levels of agriculture has grown steadily over the years(Langridge 2014).The
production of goods and services using modern technological ways of farming has made the
quality and productivity of the agricultural sector grow for the income benefit of Australian
farmers and the Australian government though taxation. The increased productivity in Australian
agricultural goods has increased the competitive and productive level for its agricultural
products.
Recently, the signing of the food and safety agreement between Australia and the United
States has strengthen the trading relationship between the two nations(Export.Gov 2017).This

Industry Reforms, Agriculture 10
mutual confidence as to each country’s food safety standards has increased the consumption
levels of agricultural produce between the two nations .Increased consumption levels implies
more exportation volume among the two countries. Primarily, this has expanded the Australian
agricultural produce market in the United States of America (Fowler, Stanley & Landgraft
2018).In addition to expanded export markets, the Australian government is promoting
environment friendly farming practices. Such practices inclusive taxation benefits for low carbon
emission farming equipment and techniques .As a member of the commonwealth, the Australian
government is bound by common agricultural policy and other directives rolled out by the
European Union Recently, some Western Australians took part in the Commonwealth Emission
reduction fun d program.
The Commonwealth emission reduction initiative has taken place in Australia which has
made farmers embrace organic farming as a way of reducing carbon emissions and to enjoy
taxation benefits.
CONCLUSION
Undoubtedly, the agricultural sector in Australia has undergone reforms over the years.
The Australian government has been the force behind its transformation through its funding,
subsidies, legislative and technical assistance to the agricultural produce .Through its support of
research ,innovative farming ways and equipment have developed which have made the produce
more productive ,high quality and competitive .Also taxation reliefs have made the agriculture
sector more productive. However, the taxation system affecting farmers seems to favor small
farms over big farms .All in all, the reforms have positively impacted on the Australian
agriculture performance.

Industry Reforms, Agriculture 11
References
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Department of Agriculture and Water Resources. (N. d).Research and Innovation.
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