What Are the Impacts of COVID-19 on Australian Agriculture?
The COVID-19 pandemic has been devastating to economies the world over since it took hold in March 2020. This is not surprising given the fact that some industries have suffered as the result of local lockdowns. The restrictions have caused some businesses to close temporarily or reduce their services.
- Australian agriculture has been resilient during the pandemic with favourable growing conditions in much of Australia
- Land prices remain high in agricultural sector
- Three-year farm profits are at the highest level since 1990
Like other countries, Australia has not been immune to this financial damage. The economy of the country has gone into the deepest slump on record. However, the food and agriculture industry has not been subject to as large a negative impact as other industries. For example, it has not suffered restrictions like the travel and hospitality sectors.
Why agriculture has been less damaged than other industries
Despite the current global situation, it’s actually a relatively good time to be involved with the agriculture industry in Australia. This is because the COVID-19 impacts on the industry have been minimal.
There is likely to be reduced demand for products like canola internationally as biofuel consumption has reduced during the crisis. However, there is increased demand for other agriculture related products such as flour. The fact is that people still need to eat, so the demand for agricultural products remains significant overall.
There may be movement in where this demand exists. For instance, supermarket chains have experienced increased demand since the pandemic began whereas demand has fallen in restaurants. This means that the agriculture industry has been vital to making sure that the supply chain for supermarkets has kept up with the demand.
Overall the agriculture industry is in a strong position especially as exports are also being supported by the federal government. The impact on agriculture from the pandemic has not been a negative one and the future of the industry seems secure.
Agricultural land prices remain strong
Land prices in the agricultural industry also remain high, despite the economic downturn caused by the COVID-19 pandemic.
This is due to the low number of available properties and a high level of demand. The demand comes from farmers who are looking to expand at a time when the agriculture industry is healthier than most. In fact, three-year farm operating profits are at their highest since 1990.
These farmers have the capacity to invest in new property thanks to the low borrowing costs that exist at present. They are also benefiting from the current low value of the Australian dollar,
None of the different economic sectors in Australia has completely escaped the economic impact of the coronavirus pandemic. However, people in the country, and across the globe have needed to eat throughout the crisis. This continues to be the case.
This means that the agricultural sector has continued to be busy providing a reliable secure food source for the country. Agricultural exports have also continued, backed by support from the Australian government.
Of course, farming is also a recognised essential service. This means that the industry has continued to operate throughout the crisis, to supply Australia’s food. Therefore, there has been limited impact of COVID-19 on Australian farms. The industry overall has not suffered the financial implications of service interruptions in the way that other sectors have.
The result is that the impacts of COVID-19 on the Australian agribusiness sector have been limited and remain so. The industry continues to be financially healthy. In the longer term, it will also be heavily involved in helping the country as it recovers from the impact of the crisis.
This help will consist of providing secure and reliable access to food and related products for the long term. This provision will include private households and the commercial sector.