Agriculture is one of the most important sectors in Australia, providing significant economic contribution through exports as well employment opportunities around the country. New data from the Australian Trade Commission (Austrade) demonstrates just how strong agribusiness is, and with the global population growing, it’s likely the demand for Australian agricultural products will only rise.
This presents ripe opportunities for farmers, but also entails a higher level of risk. Do you have the comprehensive farm insurance necessary to withstand future pressures?
Australian agribusiness exceeded the global productivity average by 46 per cent.
High productivity and rising demand spells promising future
According to a 2016 report from Austrade, Australian agribusiness is a very strong sector right now, particularly in terms of productivity. In fact, in the period between 2014 and 2015, it was not only the most productive industry in the country, but it also exceeded the global productivity average by 46 per cent.
Austrade reveals agribusiness contributed around 2.4 per cent of Australia’s gross economic value for that period. It also grows by an average of 3 per cent each year. However, is this rise in value enough to keep up with international demand?
Analysing data from The Demand Institute, global research company Nielsen reveals that global demand for grain and dairy products will increase significantly, reaching respective levels of 659 million and 1.41 billion tons by the year 2023. Much of this will stem from Asia, and Australia’s Free Trade Agreement with China puts it in prime position to capitalise on primary industry exports.
But are farm owners ready?
As the demand increases, so too does the pressure of farmers to sustain it. The Australian Bureau of Statistics reveals both farm yield and land area are gradually decreasing, dropping by around 4 per cent between the 2013-2014 and 2014-2015 period. Agribusinesses may need to increase their yield and productivity if they want to stay on top of the exports game, but expansion leads to higher levels of risk.
Whether it is machinery breakdown, an accident affecting the owner, or problems with livestock and produce, these hazards could significantly impact the operation of a farm. It’s vital that farm owners arm themselves with a specialised business insurance product to protect their assets.
In the event that a mishap occurs, they will be safe from the financial effects and are more likely to be able to get their farm up and running as soon as possible. They will be well equipped to continue profiting from the demand in the future.