Economic Analysis: Growth in Australian Agricultural Export Sector

This report analyzes the growth and challenges within the Australian agricultural sector, focusing on its export market performance. It highlights a slight decline in agricultural exports despite overall economic growth, noting significant changes in farm size and consumer demands. The report examines the impact of factors like seasonal conditions and pricing ratios on export trends, referencing farm GDP and rural export data from 1980 to 2010. It identifies stiff competition and limited farmland as key issues, while also acknowledging the growth contribution of commodities like wine and live cattle. The report concludes with recommendations for policymakers and farmers, emphasizing the need for new land, advanced technologies, innovative policies, and quality production techniques to enhance Australia's agricultural export market share. Desklib provides access to similar solved assignments and resources.

Growth in Australian Agricultural Sector for Export Market
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Table of Contents
Introduction................................................................................................................................3
Title............................................................................................................................................4
Conclusion..................................................................................................................................9
References................................................................................................................................10
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Introduction
This is a written report in which the analysis of growth in Australian agricultural sector is
determined from the economic perspective. The various issues, concepts, and theories in
relation to the growth rate and trend of agricultural sector within the export market is
highlighted in report study using certain stats and figures. The particular issue which is
emphasised in the report is losing market share within Australia’s agricultural export sector.
Moreover, some of the corrective actions have also been recommended to the key players and
policyholder in this report study. The conclusion is drawn at the end of the report which
supports the economic analysis of subject matter.
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Title
“Growth in Australian Agricultural Sector for Export Market”
Trends in Australian Agriculture
According to Australian Government Productivity Commission (2005), there is a slight
decline in agricultural export when the economy is growing in absolute terms over last 20
years. Within the agricultural export sector, there are various remarkable changes been
recorded in terms of number and size of Australian farm. Some of the crucial factors which
lead to changing the agricultural export trend are changes taking place within consumer
demands, government policies, innovation, technological advancements, developing
environmental concerns and others. The issue is declining in the trend of Australian
Agricultural export which is because of on-going challenges in variations in seasonal
condition and underlying pricing ratio.
The agricultural sector over past few decades have undergone various changes and the key
drivers which led to change in such trend are an unrelenting decrease in the sector in terms of
the trade market. However, when observed historically the agriculture sector has dominated
the market segment and is significant for the economic growth and development of Australia.
According to Vidot (2017), there is an increase in the value of Australian agricultural sector
due to the peak after 3 years of strong growth in the economy. In the financial year 2017,
Australian agricultural market is all set to break down another record which is striving at
$63.8 billion. During the past three years, the Australian economy has shown tremendous
growth which creates a high-water mark and is unmatched for the next coming five years.
For example -
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Figure 1: Farm GDP
Source: (Reserve Bank of Australia, 2010)
The farm sector has a great influence on the Marco economy of Australia and contributing
nearly 2.5% of nominal GDP. On the basis of analysis from past trends of Farm GDP starting
from year 1980 to year 2011, there is a fluctuating trend been observed. The ratio is inclining
and declining throughout the years and in some of year it has reached to generating of
negative returns for the economy. After, year 2006, there is a constant increase in farm GDP
and ratio is also recorded to rise.
Figure 2: Farm GDP and Rural Exports
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Source: (Reserve Bank of Australia, 2010)
The above figure represents ratio and trend in farm GDP and rural exports from year 1980 to
2010. There is increasing trend in farm GDP and rural exports which led to contributing
maximum in Australian economy. The main reason behind the growth of farm GDP as well
as rural export is the distinctive features of agricultural workforce who has renewed and
reframed their agricultural policies which overcome with the issues and challenges (Deloitte,
2018).
Domestic and Export market for chosen commodities
Figure 3: Australian domestic and export markets for selected commodities, 1983-84 to
2003-04
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Source: (Commonwealth of Australia, 2005)
The above figure reflects of Australia’s agricultural export profile in regards to some of the
selected commodities. There have been fluctuations and variations been recorded in the
above commodity graph and it is evident the wine market is constantly growing its export
whereas, the ratio of other commodities are increasing and decreasing. The performance of
the agricultural export sector is mixed as from the last three decades the cropping industry
seems to be at the highest productivity of gain and on the other hand, sheep – beef industry
recorded to be the lowest (Export.gov., 2017).
According to Jasper (2016), the rural sector of Australia is facing with stiff competition and is
a reason behind declining market share and performance of agricultural export. The central
issue is lack of new farmland which is needed for effectively capped agricultural production
as compared to the land and equipment’s used in countries such as Asian and South
American.
Figure 4: Top 20 agricultural export commodities — contribution to growth and growth rate,
1990-91 to 2003-04
Source: (Commonwealth of Australia, 2005)
Although, the agriculture sector is facing some issues and challenges there are some
agricultural commodities which are contributing to the growth of export market. The above
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figure highlights of such commodities i.e. wine, live cattle, processed food and others which
contributes towards the growth rate in export market (Rayner, et. al., 2010).
Recommendation
The actions are recommended to the policyholder and farmers for increasing their agricultural
export market share (Deloitte, 2018).
 The farmers must be provided with new land for cultivation and with advanced
technologies so that they can produce commodities efficiently and effectively.
 There is a requirement of formulating new policies and strategies which consist of
innovation in the agricultural activities so that there can be an increase in export in the
economy.
 Employing new techniques, processes and workers which contribute to the
maximum production of quality output and increases the export market (Rayner, et.
al., 2010).
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Conclusion
On the basis of above study, it is analysed that Australian agricultural sector is facing with
stiff competition and issues which enable low export in the economy. The agricultural sector
as a whole does not contribute much in export but some of the agricultural commodities are
contributing significantly to GDP and exports. Wine commodity is a majorly exported
product and comparatively contributes slightly that of another commodity. From the recent
development, it is observed that there is expected growth in Australian agriculture export
market and will continue the same till year 2033. Also, there is an upcoming opportunity for
agribusiness in Australia.
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References
1. Australian Government Productivity Commission. (2005). Trends in Australian
Agriculture. [Online] Pc. Available at:
https://www.pc.gov.au/research/completed/agriculture [Accessed: 06th April 2018].
2. Commonwealth of Australia. (2005). Trends in Australian Agriculture. [Online]
Pc. Available at:
https://www.pc.gov.au/research/completed/agriculture/agriculture.pdf [Accessed: 06th
April 2018].
3. Deloitte. (2018). Where are the growth opportunities in Australian agriculture?.
[Online] Deloitte. Available at: https://www2.deloitte.com/au/en/pages/consumer-
business/articles/where-are-growth-opportunities-australian-agriculture.html
[Accessed: 06th April 2018].
4. Export.gov. (2017). Australia - Agricultural Sector. [Online] export.gov. Available
at: https://www.export.gov/article?id=Australia-agricultural-sector [Accessed: 06th
April 2018].
5. Jasper, C. (2016). Australia's agriculture exports losing market share. [Online]
abc. Available at:
http://www.abc.net.au/news/rural/rural-news/2016-07-21/australian-agricultural-
trade-performance/7647784 [Accessed: 06th April 2018].
6. Rayner, V., Tan, N., & Ward, N. (2010). Trends in farm sector output and
exports. RBA Bulletin, December, 1-8.
7. Reserve Bank of Australia. (2010). Trends in Farm Sector Output and Exports.
[Online] rba. Available at:
https://www.rba.gov.au/publications/bulletin/2010/dec/1.html [Accessed: 06th April
2018].
8. Vidot, A. (2017). ABARES Outlook: Value of Australia's agriculture sector to
peak after three years of strong growth. [Online] abc. Available at:
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http://www.abc.net.au/news/rural/2017-03-07/abares-wrap-2017/8328922 [Accessed:
06th April 2018].
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