Legislative and Financial Support
Write a report on Australia Agriculture reforms.
Largely, the performance of the agriculture industry in Australia is responsible for 0.9 % of the overall 1.9 % growth of its gross domestic product. Recently, the contribution of the Australian agriculture industry to its gross domestic product has been significant (Johnson 2017).The improved performance in the agriculture sector is due to the reforms that have taken place in the country. The effects of these reforms on the Australian economy and farmers has been both negative and positive. Primarily, the legislative and financial commitment of the Australian government through funding of research and development initiatives, financial and technical support through the drought policy program ,subsidies ,price support mechanisms and financial support during the dairy farming adjustment phase have contributed to the growth in revenue for the government through taxation and increased income for them respectively. The impact of these reforms has been the development of newer farming methods and equipment, employment opportunities, loss of employment opportunities due to the invention of agro-based robots and increased competitiveness of agricultural produce.
In addition, the Australian agricultural market has expanded its markets due to the productivity and competitiveness of their products. Also, stronger trade relations between the United States of America and Australia has boosted the performance of the agricultural sector due to the mutually recognized food safety standards between the two countries. Small farm enterprises have been the greatest beneficiary of taxation cuts .Particularly, small business with an annual turnover of less than three million dollars. Also, the fact that current legislative instruments have been incorporated into the agriculture sector has equally boosted the security of the Australian agricultural produce through structural internal measures for exportation of goods and prevention of foreign diseases and pests from foreign countries produce. All in all, the reforms have affected the performance of the sector.
Recently, the Australian government has enacted important regulations which directly impact the performance of farmers in the country .In the year 2017, the Export control bill was introduced by the Australian parliament to address the modern exportation challenges facing farmers and exporters in the industry (Department of Agriculture and Water resources N .d).The export legislation is intended to provide a modern export platform for the exportation of agricultural produce having taken into account the challenges of globalization. The agricultural produce exportation department will be efficient and conducive for business in the event that the current bill is incorporated into Australian legislation. Noteworthy, the Australian dairy industry has experienced change over the past few years. The Australian government rolled out a financial adjustment assistance after the massive exit of dairy farmers from the industry .Essentially, the Australian dairy market deregulation took place in the year 2000(Department of foreign trade and affairs N .d).Currently, dairy farmers in Australia are susceptible and exposed to market forces which directly impact their actions and income.
Expanded Markets
Hopefully, the enactment of the Export control bill will boost the trade volume of Australia’s agricultural produce. The Bill is expected to provide adequate protection for farmers and exporters when it comes to exporting and dealing with export based agricultural produce. Previous exportation regulations are currently ill-equipped to handle the modern challenges facing the export processing zones due to the effect of globalization. Following the harsh economic times facing the dairy market, certain dairy farmers had to be bought out by other farmers and by the Australian government. This adjustment phase required the financial assistance of the Australian government (Harris N .d).During this adjustment phase, there was investment uncertainty into the dairy market thus reduced production and manufacture of dairy products. Also due to the uncertainties facing the dairy sectors, most employment opportunities in the dairy market were lost following the drastic reduction of dairy farmers. The unemployment rates in the country increased due to this dairy market restructuring. Also, the prices for dairy products went up due to the limited supply of dairy products despite the growing demand for dairy produce in the country.
In addition, there was limited exportation volume for dairy produce from the Australian farmers following the market deregulation and adjustment phase. These changes in the dairy sector led to a significant drop in revenue contribution to the gross domestic product by the sector. There was instability in the dairy produce prices due to the transitioning phase of the sector. Unlike the Export control Bill, the Australian government has enacted the Biosecurity Act. The Act was enacted in the year 2015 to replace the Quarantine Act. Primarily, the object of the Biosecurity Act is to protect Australian agriculture produce from foreign threats of pests and diseases (Department of Agriculture and Water Resources N. d).Following its enactment, the Australian farmers have faced little or no foreign threats of pests and diseases to their produce. It can be said that the Australian agricultural industry mainly battles domestic threats of pests and diseases following the inception of the Biosecurity Act. In addition to protection farmers produce from foreign pests and diseases, the biosecurity Act has been effective in providing a balance between protecting agricultural produce from diseases and pests and also promoting trade relations in agricultural produce.
Moreover, taxation regime flexibility has been observed in the agricultural sector of Australia over the years. Friendly taxation practices are likely to encourage investment as opposed to saving .Typically, high taxation rates are not favorable to the income and investment of farmers (Vidot 2017).Since the year 2015,small farm businesses in Australia have enjoyed tax cuts. The Australian government wanted to boost the performance and expansion of small farming enterprises through reducing the taxation brackets for the farmers’ revenue with a turnover of less than 2 million dollars and below. This move has led to the expansion of small sized farming businesses into large farm businesses due to the increase in income following low taxation rates for their businesses. Also, small business have enjoyed future tax exemptions (Marshall 2015).This taxation incentives have grown small farm businesses which have increased the employment opportunities in the agricultural sector. Primarily, growth in size of business inspires the need for more labor force thus increased labor opportunities in the agricultural sector over the years. However, the taxation benefits were only enjoyed by small rather than big farms.
Dairy Industry Deregulation
Further, the effects of the Australian water reform s has been felt in the agricultural sector Over the years, the water infrastructure in Australia has been facing various challenges such as aging, depletion, overuse among others. However, following the Australian government financing of water infrastructure changes over the years, water sources have been conditioned to serve the agricultural purposes of irrigation and transport more efficiently(Pittar N. d).Particularly, the Australian government did set aside $USD 300 Million towards its water reform initiative according to the Competitiveness White paper of 2017(Vidot 2017).The implementation of the water system reforms are implemented through the National water infrastructure Fund. In addition to boosting agricultural performance, the Australian government through the competitiveness Paper has tasked various departments to boost the competitiveness of agricultural produce through advertising and regulating the environment within which agricultural produce is produced .Primarily, the ACCC is tasked with the mandate of maintaining a fair level ground for agricultural practices so as to boost their performance and productivity.
Predominantly, the financial subsidies to the Agriculture sector in Australia have been given by the government (Gray, Emer & Sheng 2014).In addition to subsidies, the tobacco and sugar industries have been the recipients of supportive price mechanisms over the years. However, in recent years, the Australian farmers is among the least subsidized farmers in the world due to recent financial cuts to the sector (Farmers.Org 2017).Prior to the price support initiatives by the Australian government to the tobacco and sugar agricultural sectors, the production volume in the respective areas had reduced significantly .However, through the price support system, there was increase in the production of sugar and tobacco due to the better pricing. Also, the income for tobacco and sugarcane farmers slightly increased. Also, through the introduction of the drought policy program, the volume of agricultural produce during dry season has increased significantly. Through the drought policy program, the Australian government has provided training, financial and technical support to farmers during and after dry climatic spells.
Also, technological advances in the agricultural sector has contributed to the growth of productivity and competitiveness of Australian agricultural produce. The Australian government has invested financially in the research and development of its agricultural among other sectors Specifically, the Australian government made an allocation of USD 180.5 million towards a competitive grant program (Department of Foreign affairs and Trade N .d).The program is aimed at promoting innovation and research in the field of agriculture for better and efficient production and quality of agricultural produce. There have been notable innovative farming techniques and equipment in Australian field of agriculture which has contributed to the increased and efficient production levels in the country(Department of Agriculture and Water resources N .d).Organic farming has been encouraged through innovative environment friendly farming practices. Through the innovative farming ways, Australian farmers have embraced better, efficient, productive and environment friendly farming practices which have made their revenue and quality of produce increase alongside reduced carbon emissions to the environment.
Export Control Bill and Biosecurity Act
Notably, the innovation capability of Australia is ranked among the best in the world. The research and development efforts in Australia has boosted its production and exportation levels thus leading to increased foreign revenue (White 2017).Due to the incorporation of modern farming ways, the quality of agricultural produce by Australian farmers has improved and grown over the years. Not only has the quality of the produce grown but also the sales volume. Usually, good quality is a competitive advantage for the Australian farmers thus the increase in revenue margins over the years in the agriculture sector(Langridge 2014).The research and development efforts in Australia have borne fruits with the development of modern agricultural based robots(How Agricultural robots..2018).The robots are very fast, efficient and increase production and quality as compared to human labor. Due to this benefits the agriculture sector production and quality have grown. However, some farm laborers have lost their employment opportunities due to the fact that their employers have adopted machine labor instead of human labor thus the assertion that innovation might cause negative impacts on human livelihoods.
Consequently, there has been increase in the overall Australian unemployment rates owing to the adoption of farming technologies .Particularly, the tea-picking industry has been affected due to the adoption of tea-picking machines which have substituted human labor. Despite these negative effects of unemployment, robots are perfect labor substitute in the case of fast aging farmers. The fact that most of the young generation prefer white collar jobs leaves the aging population in the agriculture sector. Owing to the devolution of robots in the agricultural sector, faster harvesting has been done, faster production, faster spraying through the use of drones .Essentially, robots in agriculture have made some agricultural process faster and more efficient (SBS News 2018).Through the use of innovative farming, there has been increased production of agricultural produce thus increased income for Australian farmers and the government through taxation(Government of Australia N. d).Australian government has various research institutions dealing with different sectors of the economy.
Further, there has been a growing demand for Australian agricultural produce (Ferguson 2018).The top trading partners for Australian agricultural produce is the Chinese and American economies, alongside other Asian economies. The increase in demand for Australian produce has triggered an increase in supply for Australian agricultural produce (Mclver & Bajada 2012).This increase in produce has increased the income for Australian farmers .The demand for Australian agricultural produce is also boosted by the high productivity levels which are a competitive edge on the global trade scene. The productivity levels of the Australiana agricultural produce has grown annually. Due to the incorporation of innovative ways of farming, there has been production efficiency which has grown over the years thus making Australian produce more attractive to the global markets. The competitive advantages of Australian agriculture produce stems from use of technological advances in the production and processing of agricultural produce. Also, the demand for its produced has greatly boosted its sales and increased the supply for agricultural produce thus increased revenue from agricultural produce by the farmers.
Taxation Regime Flexibility
Currently, the signing of the food and safety regulation agreement between the United States of America and the Australian government on behalf of its farmers has grown the market base for its agricultural produce (Export.Gov 2017).The agreement is a mutual recognition arrangement of the safety standards for their respective agricultural produce. This recognition of standards has increased the level of agriculture produce being exported between the two countries (Fowler, Stanley & Langdgraft 2018).
Conclusion
Most definitely, reforms have taken place in the Australian agricultural sector. Its effects have been majorly positive. The Australian government reforms have been through funding of research, water industry reforms, adjustment phase funding, drought policy funding, subsidies and price assistive mechanisms. Through taxation cuts, small farming businesses have benefited at the expense of large farming enterprises. Notable developments have been encountered in the agriculture sector due to this reforms, increased production, competitiveness and income from agricultural produce. Whereas employment opportunities have been created in some instances robots have caused loss of jobs.
Moreover, modern technological advancement such as biogenetics, seasonal forecast, biotechnology and cloning have been achieved through government support of research and development .Regarding modern farming innovations, the Australian government has enhanced contractual protection of small farm business when it comes to digital innovations(Wiseman 2016).The Australian laws require a standard and mandatory terms of use agreement to secure the rights and privileges of innovators.Also,the mandatory terms of usage agreement is meant to encourage innovation and research in the field of agriculture .It is important that technological advances in the field of agriculture preserve jobs .All in all, the reforms in the agriculture sector have caused negative and positive impacts on the lives of farmers, exporters and consumers of agricultural products in Australia and globally.
References
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