Analysis of Reforms to Improve Agriculture in Australia: Report

This report examines the reforms implemented and proposed to improve the Australian agricultural sector. It focuses on the Farm Management Deposits (FMD) and tax reforms, which aim to reduce farmers' interest costs and provide financial flexibility, with the FMD maximum expected to double. The report also discusses the need for multi-peril crop insurance to protect farmers from drought and other risks. Furthermore, it highlights government spending on biosecurity, trade, research and development, and dam construction to enhance productivity. The analysis includes recommendations for government investment in farmer knowledge and market expansion, alongside tighter import tariffs. The report concludes that successful implementation of these reforms will position Australia as a leading agricultural producer and exporter, benefiting farmers and the economy. The student's report is available on Desklib, a platform for students to access AI-powered study tools and resources.

Running Head: Agriculture in Australia
Reforms to improve the Australian Agriculture
By (Name)
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(University)
(Date)

Agriculture in Australia 2
Reforms to improve the Australian Agriculture
Introduction
Many people in Australian Rural areas are dependent on agriculture for their living; this
is the primary source of income. According to Gray, Oss-Emer and Sheng (2014) agriculture can
be argued to play an important role in poverty elimination; even without some other income, the
agricultural produce enables survival in the rural areas. Despite being a source of food, many
people are employed in this sector. In the traditional period, agriculture was so underdeveloped
owing to the lack of knowledge and skills. However, currently there is much development in this
sector since the advancements in technology. Globalization has had much contribution in this
sector’s total productivity growth. New methods of production have been introduced, better
animal breeds and crops that are adaptable to different climates have been invented. The
government should ensure that it offer proper protection and assistance to the Australian farmers
(Sanderson, 2016 and Dfat.gov.au, 2017). The article analysis will help create an awareness of
the important reforms that are driving agricultural growth to the most farmers who are not yet
informed. The government will also be able to determine whether the policy reforms are actually
driving growth and may consider the recommendations drawn as the additional important ways
in which better results may be stimulated.
Analysis
The concern of the Australian government on it agricultural development led to the plan
on Farm Management Deposits and tax reforms. This article was referring to these reforms as the
white paper’s vision and was said to have been given a rating of 8 out of 10 by the National
Farmers' Federation (NFF). Simon Talbot was the Chief executive of the NFF and pointed out
that farmers would be happy with receiving the announcement of these reforms (Vidot, 2015).
Farmers had for long requested for these reforms so as to improve their accessibility and
flexibility. The article noted that the maximum FMD for a farmer was $ 400,000 and was
expected to double to $ 800,000 the following year (Ato.gov.au, 2016). These FMDs were to
have a very important role of reducing the farmers’ interest costs as it would facilitate the
offsetting of the bank loans. The annual saving for the farmers according to the government was
projected to be $ 150 million (Mcmahon and Cardwell, 2015). The government also noted that
there would be no loss of tax concessions or the farmers who are affected by drought in
accessing the FMDs. Peter Tuohey the president of Victorian Farmers' Federation (VFF)

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supported this idea by calling it fantastic. Fiona Simson the president of NSW Farmers'
Association noted that this was an important innovation that would help the farmers survive
during the drought season (Business.gov.au, 2017). MS Fiona also noted that drought-hit farmers
should continue being given concessional loans of which structure was to be revised.
The other reform proposed in the white paper vision is that of the need for crop
insurance. Farmers suffer from losses that arise during the drought season. These risks mostly
face those young farmers who are not in a position to put a risk cover on their crops for drought.
Multi-peril crop insurance is common overseas but absent in Australia. It is an insurance
program that helps in insuring the crops failure which may be brought about by drought, storm or
hail. It is meant to help farmers recover the cost of the important inputs they spend on putting the
crops on the ground.
Finally, the article talked about the welcoming of extra spending by the government on
biosecurity improvement, trade, Research and Development (R&D), and dams construction.
Simon Talbot noted that increased R&D would help the government in achieving the objectives
quickly. He also noted that R&D should go to branding, marketing and accessing Asia. NFF also
pointed out the need for five agricultural counselors to be appointed from overseas in addition to
extra spending on biosecurity. The government also proposed to build Dams according to the
information provided by VFF; dams would help in storage of large water volumes that would be
used for irrigation. The improvement in the terms of trade has resulted in improved factor
productivity.

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Fig: Australian terms of trade and factor productivity
Source: Xia, Zhao and Valle (2017)
The easing of terms of trade has led to a rise in total factor productivity which is essential for
Australian agriculture.
Recommendation
I would recommend the government to invest more on areas that would improve the
farmers’ knowledge so as to be able to raise their productivity. Some small scale farmers lack
sufficient knowledge and resources to boost their productivity. The government should come up
with a program to recognize and help the small scale farmers. The market for Australia farm
produce also plays an important role in the production level; the government should ensure that
there is a wide market for the farmers produce. This could be by easing the terms of trade
between Australia and other nations. Most importantly this should be on the exportation side.
The importation of farm produce should be tied up to tighter tariffs so as to discourage such a
trade. In this paper, there are many proposed reforms and recommendations made by different
people, the government should therefore consider such important and do an analysis of the
impact they would have on improving the Australian agriculture.
Conclusion
Agriculture has played an important role in the growth of the Australian economy. Many
reforms have been implemented that has created an initiative for increasing production. If the
imposed and the proposed reforms are put into work and they perform well, Australia is

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projected to be among the leading producer and exporters of farm produce. Many farmers who
are not aware of the existence or the importance of the FMD will benefit much from this paper.
Automation has led to the availability of cheap and fast labor. It is through the many reforms
implemented in this sector that development was made possible. The government has recognized
the benefits of agriculture to an economy and has formulated many strategies to improve its
productivity. More reforms are on the way.

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