Australian Natural Resources Atlas

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People - Australian Agricultural Sector in 1986

Australian Agricultural Sector in 1986

Over past two decades catchment plans have been developed for many catchments across the country. Despite setting catchment objectives to be achieved over decades, these plans have generally been based upon an assumption of an unchanging economic and social structure in the catchment. In response to the incremental change achieved under the current generation of catchment plans, landscape change has been proposed as a requirement for catchment protection. The structural change implied by landscape change has generally been overlooked or underplayed in the debate over landscape change.

This report seeks to inform both sides of this debate by describing the changes that have occurred in farming communities during the period 1986 to 1996, and exploring potential changes that may occur in the next 20 years. The study draws mainly on data from the Australian Bureau of Statistics Population and Housing Census and Australian Agricultural Census.

In 1996 agriculture was the dominant land use of Australian land. The Bureau of Rural Science land use map shows agriculture in its various forms occupying 60.9 per cent of Australia. Changes in the use of land will necessarily involve changes to the structure of agriculture. Estimates of the number of farm establishments vary according to the definition of farm one uses. In 1986 there were 128,783 farm establishments which earned more than $5,000 gross value of production. In the same year 250,858 persons described farming as their main occupation. There were 129,358 farm families. These farmers comprised 3.4 per cent of the Australian workforce.

Australian agriculture is characterised by a large number of small farms and a small number of large farms. In 1986 the median gross farm establishment income was estimated at $94,000 (using 1996 dollars and farms with at least $5,000 gross income). The financially smallest 50% (incomes lower than $94,000) produced approximately 10 per cent of total agricultural value of production. The financially largest 10 per cent of farms (incomes greater than $400,000) produced between 40 per cent and 50 per cent of gross value of Australian agricultural output. These larger farms managed over 60 per cent of Australian agricultural land, over a third of the total land area of Australia.

Farm businesses must keep pace with an overall long-term decline in agricultural terms of trade. Farmers generally achieve this by increasing productivity or by taking off farm work. Productivity increases often are achieved by adopting improved technology and increasing farm size. The counter-point to increasing farm size is the exit of some farm businesses from agriculture. Between 1986 and 1996 exits from agriculture were greatest during periods of higher commodity prices. Higher land values provided a greater incentive to sell farms. During low commodity price periods this incentive was greatly reduced. Entry to farming was less influenced by commodity prices. Entry was more likely to occur in more attractive locations or in irrigation areas. Entry to farming was far less likely in traditional broadacre cropping regions. This in part reflects the lower perceived amenity and the higher capital barriers to entry.

A constant throughout this period was an underlying trend of a loss of younger persons from agriculture. Given the observations of skewed distribution of Australian farm sizes, the low recruitment of younger persons to agriculture may be a reflection of major adjustment decisions being delayed to the inter-generational transfer period.

During this same period there was a significant increase in the dependence of many farm families on off farm income, particularly those operating smaller farms. This may in part explain the finding of that average farm family incomes in Australia were remarkably similar to family incomes of the country as a whole. This is not to argue that we should not be concerned at low incomes amongst Australian farm families, but rather that we should be no more or less worried about this than about low incomes across Australia as a whole. During 1986 to 1996 there were some areas of significant low income amongst farm families. These areas were not necessarily those with smallest farms, but were more often those areas with small to medium sized farms and lesser access to off farm employment.

The net result of these adjustment decisions has been an 18 per cent decline in farm establishment numbers between 1986 and 1996. There was a 16 per cent decline in the number of farm families and a 21 per cent decline in the number of farmers over the same decade. Establishment decline was greatest amongst the middle sized farms (those with gross farm incomes between $50,000 and $200,000). Operators on farms with smaller gross farm incomes were often under less pressure to adjust because of their greater dependence upon off-farm income. Farm adjustment seemed to be related to remoteness. There were generally greater farmer population movements in more remote locations and in irrigation areas.

A second outcome of the adjustment decisions of Australian farmers has been an apparent ageing of the farm population between 1986 and 1996. The ageing is an outcome of both a lower recruitment of younger persons to agriculture and a greater movement towards off-farm income dependence amongst younger farm based families.

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