THE number of farms will drop by 30pc by 2025,an agricultural consultants forum has been told.
Bedbrook Johnston Williams agricultural consultant David Williams told delegates at the Australian Association of Agricultural Consultants (AAAC) Outlook Day last week that the number of farms in WA in 2025 would be 3900.
The number of grain, grain/sheep or grain/beef farms is 5456. He predicted a decline of 1.5pc per year.
From 1982-1991 there was 1pc/year decline of farm numbers, a trend which increased to 1.2pc/year between 1993-2003.
Mr Williams suggested that some of the reasons contributing to the decline were economies of scale imperatives, declining terms of trade, succession planning issues and the age of farmers.
"The age of farmers on a national basis shows that like the rest of the economy, there is a significant ageing of the workforce," he said.
"Over 70pc of Australia's agriculture workforce is aged 35 years or older compared with 58pc for the rest of the economy.
"Older age groups in the agriculture sector are increasing at a faster rate than the rest of the economy which indicates less inclination for farmers to retire early.
"The average age of farmers in 1981 was 44 years, with the average age in 2001 at 50 years."
According to Mr Williams, the decrease of farm numbers has also seen the average farm size increase.
The average farm size over the period between 1982-2003 increased from 2720ha to 3340ha nationally.
Mr Williams said small farms would continue to exist, but would have to be innovative in business structure and have a source of off farm income.
"Local farmers will continue to expand," Mr Williams predicted.
"The good farmers in local areas are still making good returns."
Productivity has also increased significantly from 1974-2004, with agricultural productivity growth at 2.8pc/year compared with 1.1pc in the wider market economy.
Mr Williams said the increase in productivity was linked to the uptake in technology and surge in research and development in the agricultural sector.
"Cropping specialists and mixed sheep/crop farmers have managed to maintain productivity growth in line with a decline in terms of trade," he said.
"As a general overview, productivity growth has been critical in ensuring farm business survival as terms of trade have declined."
Mr Williams said data suggested that productivity growth was beginning to slow, but was critical for future viability.
The decline in farmers would have implications for other agricultural services, such as service specialisation and a contraction of services in areas.
Cost control and risk management will also become more important.