Some of the best and brightest in the Australian agriculture sector gathered in Canberra earlier this month for the 2016 ABARES Outlook conference.
These events are always an important opportunity for those involved in rural industry to examine and discuss the directions and trends that is shaping our sector.
The ABARES conferences have increasingly generated significant attention in recent years as the Australian economy continues its successful transition from the mining-led investment boom to broader-based growth, driven by services, exports, innovation and technology.
Some of Australia’s greatest exports—particularly agriculture, international education and tourism—are spearheading this transition, and they have helped to add more than 300,000 new jobs to our economy over the past year.
As the latest figures show, Australia’s economic growth is about three per cent, which is better than the OECD average. That is a good sign of the overall management of our nation.
The gross value of farm production for the financial year ending 2015-16, however, is predicted by ABARES to be at 9.3 per cent.
This is three times better than the national average growth across the whole economy, and at least four times better than the OECD growth.
Livestock is a classic example of this.
In the 2014-15 financial year Australia recorded a 13.3 per cent gross value increase in livestock production. This is profit that is going all the way back through the farm gate.
These are the highest prices for livestock in 20 years, and it shows that we are standing behind and delivering on our promise to deliver a better return through the farm gate.
Overall, Australian agriculture has performed very solidly in recent years. This is the result of a strong economy and growing global food demand.
The increasing middle class of our major trading partners means the demand for protein is increasingly rapidly.
Farm exports are forecast to reach nearly $45 billion in 2015-16. That’s a 37 per cent increase since 2010-11.
These figures are edging closer to our top export earner in mining – iron ore currently tracking at $49billion and surpassing number 2 on the list – coal, at $37billion.
Our exports to Asian markets, in particular, are expected to grow even more as a result of the entry into force of FTAs with our three major markets in North Asia, and eventually the TPP.
Under the Japan-Australia Economic Partnership Agreement, tariffs on exports of fresh beef to Japan have already fallen from 38.5 per cent to 31.5 per cent. They will fall again on 1 April this year, to 30.5 per cent. As a result, exports of fresh beef to Japan grew by 22 per cent in 2015.
The Korea-Australia Free Trade Agreement (KAFTA) has already seen three sets of tariff cuts since it entered into force in late 2014. KAFTA immediately eliminated tariffs on wheat, sugar, wine, fodder and many horticultural products. Tariffs on beef, cheese, lamb and other products will be eliminated over time. As a result, Australia’s beef exports to Korea grew by 30 per cent in 2015.
As the figures from the ABARES conference reveal, there has already been a significant impact from the Federal Government’s focus on agriculture as one of the most significant sectors in our transitioning economy.
And we fully expect this impact to continue to will grow as agreements achieve full implementation and we continue to do the work to addressing market access issues and building resilience in family farms.