Increasing access to international markets and embracing new technological innovations are critical to the growth of the country’s agriculture industry.
That’s according to the Bankwest Future of Business: Focus on Agriculture report, published by Bankwest as part of its Focus on Industry series.
The report shows the importance of agriculture to the economic future of WA - still the dominant crop producing state in Australia - is growing with mining commodity prices forecast to sit well below historical highs.
Commenting on the report Bankwest General Manager of Business Banking WA, Richard Bator, says growing WA’s slice of international trade is crucial.
'Access to global markets outside of WA's existing largest export destinations of Indonesia ($940.8m), China ($912.4m) and Vietnam ($833.5m) presents an unmissable growth opportunity.
'Brokering free trade agreements with major countries importing Australian agriculture has the capacity to unlock more buyers for the industry. Recent FTAs with China, Korea and Japan have unlocked new revenue streams for parts of Australia’s agriculture sector.
'Promisingly FTAs are already being negotiated with Indonesia, the EU and the UK,' he added.
The report also outlines how Australia’s climate-aided farming performance in 2017 contributed to a record $63.4b in revenue for the nation’s agricultural sector. Crops remain the dominant form of agricultural revenue, accounting for 55.3%, although strong prices for livestock in the 2017 financial year led to stronger profits without much change in production levels.
WA’s farmers produced 18 million tonnes of crops in the year to June 2017, the highest production nationwide. WA’s agricultural sector also contributed the highest proportion of the state’s GDP growth of all industries in the year to June 2017, contributing 0.5 percentage points.
Nationally, agricultural exports grew by 8.7% to $48.7 billion in the year to June 2017 andcontributed 0.4 percentage points to Australia's 2.0% growth. The nation’s largest export destination, China, will see its middle class more than double to 3.5 billion by 2030, bringing with it vast opportunity for export of premium agricultural products.
'The future will be increasingly influenced by the role of agricultural technology and the greater adoption of drones, soil mapping software and driverless tractor technology. These advances will allow small to medium sized farms to perform farming operations with lower risk,' added Mr Bator.
'But as always, climate volatility and commodity prices will continue to have the greatest impact on farming bottom lines.'
About the report
The Bankwest Future of Business: Focus on Agriculture Report covers Australia’s agricultural sector, summarising trends based on statistics from IBIS World, the Australian Bureau of Statistics and other reputable sources.