Farming in the 21st Century

Thursday 19 May 2011

• Myth One:

Drought is an unlucky and unexpected event.

• Myth Two:

Australian farmers are poor.

• Myth Three:

If I struggle and get one good season, all will be OK.

• Myth Four:

Family farms have no future.

• Myth Five:

Agriculture has no future.

The effects of major drought

1864-66 All States affected except Tasmania.

1880-86 Southern and eastern States affected.

1895-1903 Sheep numbers halved and more than 40 per cent loss of cattle. Most devastating drought in terms of stock losses.

1911-16 Loss of 19 million sheep and two million cattle.

1918-20 Only parts of Western Australia free from drought.

1939-45 Loss of nearly 30 million sheep between 1942 and 1945.

1963-68 Widespread drought. Also longest drought in arid central Australia: 1958-67. The last two years saw a 40 per cent drop in wheat harvest, a loss of 20 million sheep, and a decrease in farm income of $300-500 million.

1972-73 Mainly in eastern Australia.

1982-83 Total loss estimated in excess of $3000 million. Most intense drought in terms of vast areas affected.

1991-95 Average production by rural industries fell about 10 per cent; $590 million drought relief provided by the Commonwealth Government.

2002-03 Economic growth in Australia reduced by about $7 billion. The Australian Government has committed more than $1 billion in assistance to farm families.

The effects of major drought (cont’d)

Myth two:

Australian Farmers are poor

State

New South Wales 26 676

Victoria 20 305

South Australia 7 586

Tasmania 2 415

Western Australia 11 697

Queensland 24 569

Northern Territory 5 423

Australian Capital Territory 1 229

TOTAL 99 900

Myth three:

If I struggle and get one good season!

One good season?

Or Skill

Scale,

And off farm income

Myth four.

Family farms have no future

Ninety-seven %Of farms with a GFIExceeding $500,000Are Family Owned

ABARE 2006

Myth five:

Agriculture has no future.

Myth five: Agriculture has no future

• around 17 per cent of the work force.

• 4 per cent of workers employed in the rural industries contribute as much to Australia’s export earnings as the 85 percent of the work force employed in the services sector.

Myth five: Agriculture has no future

While agricultural production today contributes only 3.1 per cent of GDP) the farm-dependent economy – the farm services sector, food and fibre processing, and similar industries –

•account for a massive 12.1 per cent of GDP.

•agriculture accounts for only about 4 per cent of employment directly, it keeps 1.6 million people in work nationally

Agriculture can perform as the graph below indicates.

Risk/ Return Profile 1989-2003

Aust SharesList Prop

Cash

Aust BondsFMP Top

20%

FMP AVE

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

0% 2% 4% 6% 8% 10% 12% 14% 16%

RISK

RETU

RN

Year Population Rural Population

1810 12,000 All

1910 4.3 Million Approximately 1

million

1960 10.3 million Approximately 1

million

2010 22,393,141 ( 12.30 est

20/07/10)

????

Australia’s population

GP PSC PSC Wine and spirit manufacturing

Manufacturing:- $M/No (%) $M/No (%) $M/No (%)Output 1,145 35.3 125.7 27.5 94.99 20.8Employment/Jobs 1479 13.6 180 10.3 120 6.9Wages and Salaries

128.2 20.87 16.942 19.1 11.5 13

AgricultureOutput 411.8 12.7 117 25.6Employment 2165 20 619 35.5Wages 38,925 6.3 11.4 12.9

All IndustriesOutput 3247 457.6Employment 10849 1744Wages 619.4 88.5

January 2011 Remplan Economic Data for the Grampians Pyrenees Region(GP region = Ararat, Northern Grampians and Pyrenees Shires) and Pyrenees Shire Council (PSC)

Grampians Pyrenees PSCManufacturing 128.25 Manufacturing 16.94Health Care and Social Assistance

79.90 Agriculture 11.40

Public Administration

74.13 Public Administration

11.37

Education and Training

57.82 Education and Training

9.56

Retail 40.87 Health Care and Social Assistance

8.50

The top five ranking industries in terms of wages payments (in $M):-

Industry Name $M Output (gross revenue)

Jobs Wages %

Manufacturing 125,747 180 16.9Agriculture Forestry and Fishing

117,116 619 11.4

Total 457,603 1744 88.478

Wine Spirits and Tobacco

94,994 120 11.5 13

Sheep, Grain, Beef and Dairy Cattle

93,184 519 7.84 8.9

MAJOR INDUSRIES OF THE PYRENEES SHIRE JANUARY 2011

The Second and Third S

New Approaches

• Farmers don't need to own land.

• Landowners don't have to farm.

• Agriculture must compete with other industries.

• Next Gen may get a start away from the family farm

• Need new ways of doing things.