Australian Agriculture Industry's Contribution to GDP

The assignment discusses the Australian agriculture industry's growth and contribution to the country's GDP. It explores the impact of climate change on production and export rates, as well as the industry's role in generating employment opportunities and supporting economic development.

INTRODUCTION
Agriculture sector of Australia influence economy condition of the nation to great extent.
Contribution of agriculture industry in GDP was 2.5% last year (McCombie and Thirlwall,
2016). Though this is small contribution but variation in weather conditions supports in
generating high revenues. Present study will discuss growth in Australian Agriculture sector for
Export Market from economic perspective. Government, agriculture firms are interested in this
study because by identifying the potential growth opportunities of the industry, these
stakeholders can make effective strategies for increasing revenues (Australia's booming ag
sector grows 23% in a year, 2017).
ECONOMIC ANALYSIS
Over a period of time agriculture industry has added 1.5% in annual growth in GDP. This
year rainfall in many cropping regions has been above regions which has impact positively on
the output (Larder, Sippel and Lawrence, 2015). This has contributed positively in overall
economy condition.
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Illustration 1: farm GDP
Source: (Trends in Farm Sector Output and Exports, 2010)
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Illustration 2: Contribution
Statistical records show that in the year 2009/10 overall production was 23 billion. At
that time total contribution of agriculture industry in the economy was 2%. Records of Australian
Bureau of Agricultural and resources economics and Sciences (ABARES) show that this sector
employed 10% of population. Around 440000 people work in this industry but till 2009/2010
they have remained 325000 (Cronshaw and Grafton, 2016).
Illustration 3: Share of gross value of farm production
Source: (Trends in Farm Sector Output and Exports, 2010)
Over a period of time output has been decreased but rural exports have remained
unchanged. But it has weak growth that tend to have high export. Recently this sector is
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performing well and it is expected that in coming year it will be risen more. Last three years
growth of agriculture industry has been seen amazing. ABARES records reflect that production
will be enhanced and more export will be done of agricultural products. Crop production is
increasing with the rapid speed that has helped in enhancing export which has been recorded
48.7 Billion in the year 2016-2017. Since four years seasonal condition of Australia is good
which is creating positive environment for the farmers and it is supporting in enhancing output of
agricultural products. This year production has been raised by 20% as compare to last year.
Illustration 4: Rural exports and farm GDP
Source: (Trends in Farm Sector Output and Exports, 2010)
Agriculture industry is considered as biggest employer in rural and regional communities.
It has hired more than 1.6 million Australian. There are 135000 Australian farmers those who are
working well for producing enough food to feed approx 80 million people. It is beneficial for
fulfilling domestic food requirements but also assist in exporting agricultural products to other
nation in order to fulfil their need as well (Australia’s ‘five strong pillar economy’: agriculture,
2015). Export market value of this industry is 41 Billion per annum. ABARES figures reflect
that grains and oilseeds (29.8%), meat (24.0%), Dairy (6.6%), Horticulture (4.5%), Wool
(13.5%) contributes in export market. Asia is the emerging nation, income level of people are
increasing that contributes 60% Australian export of farm products. It exports its goods to China,
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Japan, Indonesia, Singapore etc. many countries. Its export business is expected to grow well in
coming future (Agriculture is now the powerhouse driving economic growth in Australia, 2017).
Though, due to increasing demand, high competition recently Australia has to face huge
difficulties Government of Australia support agriculture industry just 960 million. Climate
change is the major factor that influence overall growth of the farm industry. Because of poor
weather condition farmers fail to produce adequate material. Furthermore, advance
technological support is beneficial for the growth of this sector to great extent (Australia's
booming ag sector grows 23% in a year, 2017). Despite of huge contribution in economy, still
this industry is not getting required investment capital from the government and other investors.
But current records show that agriculture industry is the largest contributor to the economy
growth of the nation. GDP of farm production rate has been recorded 62.8%. In the year 2016-
2017 this industry has contributed 50 billion in exports. This 41% high as compare to last five
year records. In the year 2016-2017 export of pulses were worth of 3 billion, nuts export was 822
million. Top products which demand is high in export industry are beef, goat meat, offal etc. In
the year 2016-2017 total Australian wine was exported which had worth of 596 million which
was 43% high as compare to previous year (McCombie and Thirlwall, 2016). This is expected
that agriculture industry will continue to grow well in coming future as well and it will support in
raising economy condition of the nation significantly.
Actions taken by key players
In order to encourage export of agriculture products Australian government has to make
effective export laws (Trends in Farm Sector Output and Exports, 2010). Policy makers should
give exemption on tax on earning through agriculture industry. If this sector has to pay less tax
than it will support in increasing export activities and increasing revenues as well. One of the
major issue that faced by agriculture industry is poor production due to which it fails to meet the
demand (Australia’s ‘five strong pillar economy’: agriculture, 2015). If government take care of
environmental condition then it will make the climate favourable by this way output will be
increased thus, export will be raised to great extent. Improvement in soil health, ecological health
and biodiversity can be beneficial for the growth of agriculture industry (Agriculture is now the
powerhouse driving economic growth in Australia, 2017). By this way this sector will be able to
generate more revenues and contribute well in the economy.
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CONCLUSION
From the above study it can be concluded that climate has been changed which has
supported in increasing output of agriculture products. By this way export has been raised which
contributes well in the economy development of the nation. The compositional shift in the farm
production is beneficial for the nation, it is expected to grow well. This sector generates more
employment opportunities for the population and support in increasing per capita income of the
nation.
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