Murray McGregor and Martin Bent

Muresk Institute of Agriculture

Western Australia

Farming in the New Economy

An Australia Perspective

Introduction

• Australia is large (5,000 x 3,000km)

• Concentrated urban population, and low rural

population density

• Productivity not high, but large areas are farmed

• Significant exporter - wheat, wool, meat and cotton,

wine, oilseeds and pulses, dairy and horticulture.

• Import some inputs

• Agriculture is young

• Environmental impacts

World Trade Organisation

• Australia is a significant exporter

• No subsidies, export incentives or significant

Government support

• Access and equity in international markets

• Increasing sophistication in marketing - moving

away from commodities

• Phyto-sanitary barriers

• Supply chain management and QA

• Regulatory harmonisation

Globalisation

• Internationalisation of agri-food industries

• Reductions in institutional barriers to trade

• Information flows - IT and QA

• Logistics and food technology

• Concentration along the agribusiness chain

Concentration

• No of commercial farmers declining

• Changes in land use (1993 -2000)

Nurseries, flowers and grapes >+40%

Sheep - 28% Pigs - 30%

• New products - noodle wheat and lupins

• More employment in agribusiness

• Rationalisation of input suppliers - less competition

• Demutualisation of farmer cooperatives (often with

statutory powers)

New Technologies - IT

• High computer and Internet usage

• traditional management uses but also Internet

overcomes some of the distance barriers - eg banking

• Electronic marketing

• Transponders for identification - stock and wool

• Marketing - Mick’s Whips

• Poor telecommunications infrastructure

• Low levels of expertise in some sectors

New Technologies - IT

• Precision farming

• heterogenous soils and landscapes

• low yields and extensive systems

• Lower costs and relevant applications are

encouraging uptake

• Remote sensing and remote control

• Variable rate technology - trials on the run

• Prescriptive solutions

New Technologies - BT

• Reactions to GM crops mixed

• BT Cotton 1996 - price cf USA

• Precautionary approach

• Agronomy, environment and markets

• Reactions from farmers, not consumers

• Banned in some Shires

• Premia/market access - real or not?

• Intellectual property rights - Aus not in the game

• Market power

New Technologies - BT

Natural

Resources

Plant

Breeding

Seed A

Inputs

Farm

Manager

Animal

Farmer

Food

Feed

+ Harvest

+Less crude

oil,minerals,

land

water Less fertiliser,pesticides, fuel,

machinery, energy

Less time,information

Processor C

Less energy

Less waste Less

waste

NewGenes

Seed B

Seed C

Seed D

CropC

CropD

Crop

A

Crop

B

Consumer A

Processor A

Processor B

Processor D

Higher quality, more nutritious

Higher quality, more nutritious

Consumer B

Consumer B

New Economy

• Concentration of industry

• Prescriptions - QA, expert technology, biotechnology

companies

• Will there be farmers and farm managers or just

contractors?

• Where’s the fun?

• Heterogeneity - soils, plants, animals, staff, markets

• New economy creates problems - but also provides

solutions