Agricultural Industry Reforms in Australia

Question: Discuss about the Report for Agricultural Industry Reforms in Australia. Answer: Introduction The economist believes that there is a need to grow the agricultural productivity of a nation in a sustainable manner to seek the long-term welfare of the rural regions. It is important to note that the government of Australia has undergone various economic reforms to improve the current status of industrial production on which the GDP of the nation depends (Lee and Heshmati, 2009). It is important to note that the Australian agriculture industry has sought decline in the production due to various natural uncertainties. The paper has been developed to analyse the current microeconomic reforms in the Australian agricultural industry made by the government to improve the productivity of the economy. The study presents the overview of the agriculture industry of Australia and the policy reforms faced by the industry in the recent years. According to Kingwell (2013), the climate change in Australia has emerged to be the major challenge for the agriculture industry (Kingwell, 2013). A fall in the productivity has been evident in the recent years that must be checked to control the economic balance of the country. The implementation of innovative technology in agricultural production and legislation has been identified as major micro-economic reforms for the Australian agriculture industry. Furthermore, the government has introduced low-cost input strategy that minimises the cost of production and increases profitability of the farmers. Analysis of economic reform in agriculture industry The agriculture industry of Australia is one of the major contributors to the real GDP of the nation. It is important to note that around 60% of the agricultural products are exported to other countries that increased to 75% in 2012 (Salim and Islam, 2010). Hence, the economy seeks a comparative advantage in the excess production of the agriculture industry that helps it to earn foreign income. The Broadacre Farms cover around 54% of the total production of the agriculture industry that makes up 53% of the total agriculture business in the nation (ODonnell, 2010). On the other hand, horticulture industry makes up around 16 percent of the total agricultural production. A figure has been given below that presents the contribution of sub-industries in terms of the gross value production in the Australian agriculture industry. Figure: Share of gross value of Australia's agricultural production, by industry (2015) Source: (Connolly and Gustafsson, 2015) Climate change and decline in rainfall has been identified as major challenge for the agriculture industry. It is important to note that the production of the agriculture industry fell during the draught years (ODonnell, 2010). On the other hand, the excess production of the industry on other years using economic reforms has helped the country sustain the deficit of agricultural supplies during the draught years. A diagram has been presented below for better understanding. Figure: Impact of drought on the gross value of agricultural production Source: (Fuglie, Wang and Ball, 2012) It has been found that the contribution of the agriculture industry has increased from $14 billion in 1980 to $30 billion in the year 2012. Hence, several economic reforms have been introduced by the government of Australia that supports the growth of agriculture industry in the country (Salim and Islam, 2010). The Australian government has identified the prospects in agricultural industry over the past couple of decades or so the agriculture industry has been significantly contributed to the increase in Real GDP of the country. Hence, in order to improve the current status of agricultural sector in Australia, the government has enforced some crucial macro-economical as well as micro-economical reforms (Foster, 2015). Understandably, the primary aim of the agricultural reforms is to control the cost of production contributing to the growth of the sector. Furthermore, the government of the country has figured out effective cost-efficient and productive agricultural reforms so that the margin of profitability can be increased supporting to the farmers and people attached to the sector. Moreover, economy-wide agricultural reforms have been launched to construct improved agricultural structure (Anderson and Strutt, 2014). The economy-wide reforms have cut down the prices of transportation system, technology, electricity and new water irrigation facilities so that the farmers can utilise the necessary facilities at a reasonable cost. Apart from that, deregulation of significant financial services sector has delivered efficient credit policies for the farmers to strengthen the financial position of the agriculture sector. On the other hand, primary agricultural reforms include the low the cost of farming machinery, farming labours and efficient training programmes for the farming people to improve the knowledge, skills and productivity of the farmers associated with agricultural sector (Kingwell, 2013). In order to deliver the most sufficient financial, technological and business development within the farming industry, the Australian government has implemented economic reforms protecting the margin of production cost of the farmers. Meanwhile, contemporary industrial development and increasing growth in the industrial sector have somehow overshadowed the contribution of agricultural industry. Hence, the government has delivered suitable credit policy to the farmers so that the growth structure of the farming industry will be linked up with the reform deliverable. In addition to that, latest technology and innovation tactics have been influenced within the agricultural industry to support the productivity of the farmers (Connolly and Gustafsson, 2013). Significant changes have been made in the existing agricultural reforms to improve the current set of supply and demand model. Through the identification of the crucial productivity determinants, the economic reform policies have been directed towards agricultural sustainability improving the present status of the farming people. Nevertheless, the reforms have significantly participated in the improving condition of rural economy creating jobs in the agricultural market (Sheng, Jackson and Gooday, 2015). Through such reform measures, the government has also promoted agricultural industry and its contribution in front of the Australian society. Conclusion Though the agricultural industry of Australia has shown massive improvements in the past couple of decades, few issues and challenges have to be resolved providing support to the people attached to the same. Meanwhile, the identified reforms and policy measures have significantly contributed to the farming industry to say the least. By providing new technological assistance and training facilities, the government has improved the agricultural knowledge resources among the contemporary farmers. Furthermore, low prices of effective infrastructural facilities and product subsidies have helped to maintain significant production margins for farmers attached to the farming industry. Moreover, the changes in agricultural taxation through reform policies have added extra leverage to the farmers to secure improved profit margins. 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