Terry Sheales
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Transcript of Terry Sheales
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Terry Sheales
Economic issues affecting the region
Economic issues affecting the region
Deputy Executive Director
KununurraRegional Outlook Conference
Wednesday 20 May 2009
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1. Commodity market drivers
2. Key challenges for the future
• climate change and the CPRS
• allocating water
• productivity growth
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Real 2004 Dollars
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What will be the impact of the CPRS on the farm sector?
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Agriculture and the CPRSAgriculture and the CPRS
• 2011: CPRS commences
• agriculture initially excluded from the scheme
• 2013: decision to include agriculture or not
• 2015: earliest possible date of inclusion
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Australia’s greenhouse gas emissions, by sector, 2006
3%5%6%7%
14%16%
50%
50
100
150
200
250
300
stationaryenergy
agriculture transport LUCF fugitiveemissions
industrialprocesses
wasteMt CO2-eq
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Agriculture and the CPRS: 2010percent change in agricultural input costs
0.1
0.2
0.3
0.4
0.5
wheatand other
crops
mixedlivestock
beef sheep-beef
sheep dairy
%
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Percent change in agricultural production with the CPRS
-8
-6
-4
-2
2
4
6
beef &sheepmeat
dairy cattle otheranimals
grains other crops
2020
2030
%
Agricultural production with the CPRSPer cent change relative to no CPRS
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without CPRS
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without CPRS
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Options for reducing emissions from agriculture
• improved feed conversion efficiency
• feed additives
• alter fertiliser applications
• waste management
• carbon sequestration
• GM technologies
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Efficient allocation of water
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Water availability
• CSIRO
– 11% availability by 2030
• ABARE
– 3% incomes
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Lifting productivity
• Remains the key to handling pressure on the farm sector
• Whether it be:
– seasonal variability and drought
– climate change
– CPRS
– global food crisis
– global economic crisis
– protectionist responses
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Source: Mullen and Crean 2007
expenditure2007A$million
publicly funded
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How do we lift productivity growth?
• Measure productivity and understand its drivers
• Improve R&D effectiveness
– encourage further business R&D
– improve targeting and evaluation of public good R&D
• Remove government impediments to productivity growth
– efficient water allocation
– efficient climate change policies
– efficient drought policies
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Conclusions
Unprecedented declines in economic growth but a resilient farm sector response
Long run challenges exacerbated by the global economic crisis
Productivity growth slowing – just when we need it to be accelerating
Further reforms in water allocation systems and R&D policies needed.
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