Aus farm productivity 'flat-lining'

30 Aug, 2015 02:00 AM
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AFI executive director Mick Keogh says Australian farm productivity has been
The US is increasing productivity, producing more with the same inputs
AFI executive director Mick Keogh says Australian farm productivity has been "flat-lining" since 1997.

NOT all research projects provide definitive bottom line conclusions - but the investigation process can still deliver new or valuable insights, as the Rural Industries Research and Development Corporation’s latest work has shown.

The RIRDC report, Assessing the competitiveness of Australian agriculture was written by the Australian Farm Institute and released last week.

The report investigated the potential development of a national agricultural competitiveness index to evaluate Australia’s performance against other leading farm nations like the US, Brazil and Canada.

RIRDC managing director Craig Burns said the research involved an investigation of the current understanding both in Australia and internationally of factors that contribute to the competitiveness of a national agriculture sector.

Mr Burns said specifically, the research involved an investigation of the potential for development of a competitiveness indicator or index as a tool to inform decision-making about ways to enhance agricultural competitiveness.

He said the research found that interest in the development of indicators of competitiveness had been growing internationally, especially as a means of comparing the relative competitiveness of different nations.

However, the research also found that correlations between indicators of competitiveness and national economic performance are not strong, he said.

“One major limitation to better understanding relative national agricultural competitiveness was found to be a lack of robust, internationally-comparable agriculture sector statistical data, evidenced by some major flaws identified in international data used in this research,” he said.

The report recommended that the Australian government, relevant national and international agencies and the Australian agricultural industries take steps to improve the quality and comprehensiveness of Australian agricultural statistics.

Speaking to Fairfax Media, AFI executive director Mick Keogh said the research highlighted that trying to look for simplistic numbers or single indicators to show how competitive Australian agriculture was, relative to the rest of the world “is not a sensible or reliable way to go”.

“You need to rely on a much broader range of factors and understand what they are in order to get a better picture of what’s happening,” he said.

However, Mr Keogh was adamant the new RIRDC report would still provide valuable information to farmers or policy-makers, especially about Australia’s “flat-lining” rate of productivity.

“The thing that just strikes you quite immediately is the productivity numbers,” he said.

“The US is increasing productivity, producing more with the same inputs and we’ve been flat-lining since about 1997.

“We haven’t really been able to maintain and improve productivity numbers since then.

“I think that probably tells us that we’re losing competitiveness and we need to be pretty careful about that.

“Finding new technologies and finding ways to lift that competitiveness is just as important as it has ever been and I think there’s a bit of a message for us.”

Mr Keogh said a range of factors had caused Australian agriculture’s productivity to flat-line, including broader economic factors.

“You can’t disassociate it from profitability,” he said.

“The mining boom lifted the Australian exchange rate and basically disadvantaged the farm sector and that really did a lot to reduce the profitability of the farm sector.

“That also meant investment rates dropped off for areas like new machinery, new capital expenditure, new fencing etc.

“But there’s no doubt Genetically Modified crops, genetics, genomics and digital technologies are going to be very significant to lifting productivity.”

Mr Burns said data in the new RIRDC report would suggest Australian farmers are competitive - but areas like R&D investment, whether government or private investment, needed to be maintained “to make sure we don’t fall behind”.

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FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

wtf
30/08/2015 2:55:11 AM

Could it be that the US figures are being distorted by such factors as ethanol mandates, multi peril crop insurance, access payments for fracking? Govt legislation such as these can artificially elevate production, at a severe disadvantage to other parts of the world. I guess if the biotech sector really wanted to improve malnutrition in the world they would target this legislation, or maybe they are just lining their own pockets? What a load of rubbish this comparison is, but I guess any propaganda to tell farmers about the benefits of regulated monopolies via patents is good propaganda.
John
30/08/2015 9:40:46 AM

Farming is a business. Australia is an incredibly difficult place in which to run a business. Australia is also a vast continent. The so called 'tyranny of distance' adds to the cost of doing business. Every fluctuation in the exchange rate; every rise in wages, or fuel and other associated costs has a big impact on the bottom line of every farmer. Fix Australia's competitiveness issues and let some more positive market signals flow through to farmers and you will see an increase in productivity. It's that simple
Colly
30/08/2015 1:54:37 PM

All research projects should provide definitive bottom line conclusions because without a profit all the production gains in the world are not going to sustain or progress farm businesses. Stop trying to get production gains and make all research outcomes profit based.
Beef man
30/08/2015 5:44:22 PM

Farm productivity flat I wonder why would 1$ a litre milk price ruthless supermarkets behaviour towards producers acc investigations found this out and poor returns for a long time cause this and the fact that the average age of the producer would be nudging 60.In The beef game abatoirs have been ruthless towards producers.we also aren't subsidised and in the last ten yrs our govt has been focused on minning instead of primary production. They have just worked out that Australia doesn't ride on a haulpac and we are not just a quarry however if the a$ heads towards parity ag dreams will fade.
Invey
31/08/2015 6:28:10 AM

If you want to know why farmers aren't increasing production, just ask one. We could all produce more but there are many reasons we won't and don't. Mostly to do with massive costs, high risk and Govt imposts to business. Remember LE, you have to protect your business now from our own Govt interventions and restrictions. This means you only run a low risk low production business, and mostly just as much profit. Profit is more important to farmers than production. Let us make a profit and production will rise.
THE FARMER
31/08/2015 6:38:48 AM

There are limits to productivity .Hard to be productive in a drought .You can't beat the fact that be it plant or animal we are dealing with the limits of biology.
Jacky
31/08/2015 7:37:37 AM

Farmers need to focus on profitability, not productivity.
nico
31/08/2015 8:03:26 AM

Good sense from The Farmer. Colly, you say "make all research outcomes profit based". That's not how science works. Or would you shut down astronomy, physics, chemistry, biology, quantum theory, climatology, meteorology, oceanography, medical science? These are not driven by the profit motive.
Jessy
31/08/2015 8:46:07 AM

Workers in America get paid $7us an hour,in Australia the regulated labour market controlled by the government dictates farmers pay workers $22+ an hour.the Aus government then tells Aus farmers how good deregulated ag is,wot a load of bull!!!
angry australian
31/08/2015 9:16:39 AM

Not much sense from you either Nico. Are you seriously suggesting we give an open ended cheque to researchers, without a shred of accountability for the use of the research? That time passed with your fore bearers who claimed they could turn lead into gold. Most of those disciplines you nominated are funded and driven by by profit. The problem with the current Australian system is the research institutions know the pot of gold is automatically replenished annually so any research tends to be funded without the true scrutiny on whether the funders (farmer) will truly benefit.
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