Agriculture in Australia

Lecture 1&2
The world, and Australian agriculture
Reading for this topic:
• Chapter 1 Agriculture in Australia, p3-10.
• Article ‘Still Hungry’ by Pinstrup-Anderson and Cheung,
Scientific American, September 2007.
• Article ‘Global Food Security: facts, Issues and implications’ by
Moir and Morris, Science and Economic Insights, Vol1, 2011,
ABARES.
• Lecture 1&2 PPT slides
(The readings are on the LMS)
Lets Start with the history of
agriculture
Now let’s think about the world food
situation and where Australia fits
into the story
First, WHAT IS AN ECONOMY?
Australia and the rest of the world
 Economic growth
Increase in goods and services in an economy per
head of population

This happens when there are economic resources and

investment of capital, goods and services are
produced and sold, people have jobs, incomes rise
 How are things in the world?
• Rapidly growing population (7bn, soon 9bn 2050)
• Widespread poverty and hunger (1bn)
• Rapidly growing large emerging economies
(China, India, Brazil, Indonesia, Eastern Europe)
• Rapidly growing incomes
• Rapidly growing demand for Food
• Warming Climate
• Food shortage is because of Income shortage, ie
world food problem is world income problem
 Australia and Australia’s Agriculture Place in the
World?

• Wealthy country: Average income/hd $50k

• Produces enough food to feed 60million people
• Sells 65% of agricultural production overseas
• This means Australian farmers (most) are
efficient at agriculture (low cost, people buy the
production)
 Role of Agricultural Technology and Agricultural
Production
• Agricultural production is 2.5% of total production of goods and
services in Australia

• Agricultural production is 15% of Australia’s total exports

• Agricultural productivity (output produced/inputs used)

increases around 2% p.a.
Further Detail
Factors that increase demand for food
China experience: indicator of what will happen in other
poor countries that grow
China
So what has happened to agricultural commodity prices?
Comparative advantage and
trade

• Benefits of trade
– Trade can benefit everyone in a
society and in different countries
because it allows people to specialise
in activities in which they have a
comparative advantage.
• Each person consumes goods and
services produced by many other people
both in our country and around the
world.
• Trade allows everyone to enjoy a greater
quantity and variety of goods and
services.
• Trade makes everyone better off
because it allows people to specialise in
those activities in which they have a
comparative advantage – both parties to
a trade deal gain
TRADE NOT AID: