Trends in Australian Agriculture

Agriculture has undergone much change over the last few decades. Key drivers have been shifts in consumer demand, changes in government policies, technological advances and innovation, emerging environmental concerns and an unrelenting decline in the sector’s terms of trade.

While historically agriculture played a dominant role in the economy — its relative importance has declined in recent decades.

That said, in absolute terms, real agricultural output has more than doubled over the four decades to 2003 04. And agricultural exports have almost tripled in value (real terms) since the mid 1970’s.

In 2003 04, the sector directly generated 4 per cent of GDP and employed 375 000 people or 4 per cent of the workforce. It looms larger in Australia’s exports, accounting for around 22 per cent of total exports in 2003 04.

Farms are much fewer and larger than twenty years ago. Production is increasingly concentrated on larger farms, accentuating the dual nature of the sector (with a few large commercial farms accounting for the majority of output and many farms accounting for a small share of output).

Agriculture has become increasingly export oriented over the last two decades — around two-thirds of production is now exported. Exports have also become more diverse, with less reliance on traditional commodities such as wool and more on processed products such as wine, cheese and seafood.

The agricultural workforce has a number of distinctive features, including: a high proportion of self-employed, family and casual workers; long job tenure; and a relatively old workforce with relatively low education levels and employee wages.

The last two decades have seen an increase in the number of employees and a fall in employers and contributing family workers. The educational attainment of workers has also improved.

Off-farm employment has become increasingly important to maintaining family farm incomes. Since 1990, the proportion of farm families deriving income from off-farm wages and salaries increased from 30 to 45 per cent, with average earnings rising from $15 000 to $33 500 per year.

Agricultural productivity has exhibited strong growth over the last three decades — more than twice the rate achieved in Australia’s market sector as a whole.

Productivity growth has accounted for the entire increase in output by the agriculture sector over the last 30 years.

Performance within the sector has been mixed — over the last three decades the cropping industry recorded the highest productivity gains, and the sheep and sheep–beef industries the lowest.