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1345.4 - SA Stats, Aug 2008  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 26/08/2008   
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FEATURE ARTICLE: SOUTH AUSTRALIA'S AGRICULTURE INDUSTRY


INTRODUCTION

The agriculture industry in South Australia experienced a downturn during 2006-07 as a result of severe drought conditions through 2006. This article provides an overview of South Australia's agriculture industry using data from multiple sources, with an overview of how it has changed over the ten years between 1996-97 and 2006-07. Key points from the article include:

  • In 2006-07, income from the South Australian agriculture industry was $596m, a decrease of 51.7% from 2005-06.
  • The main agricultural commodities produced in South Australia in 2006-07 were grapes and wheat.
  • The value of agricultural exports as a proportion of total exports for South Australia has steadily decreased over the last five years, from 18.2% in 2001-02 to 7.5% in 2006-07.
  • The average number of people employed in the agriculture industry has decreased over the last decade, from 45,064 people in 1996-97 to 31,870 people in 2006-07.


SOUTH AUSTRALIA'S AGRICULTURAL LAND

In 2006-07, South Australia had 50m hectares of agricultural land and close to 16,000 agricultural establishments. Three-quarters (75.8%) of the agricultural area in South Australia is located in the Northern Statistical Division, but only 7.7% of agricultural establishments are in this region.

Map of South Australia's Statistical Divisions (PDF 2.44MB)

Agricultural land and holdings, by Statistical Division, South Australia - 2006-07

Area of holding
Establishments
(ha)
(Number)

South Australia
50 064 634
15 835
Statistical Divisions
Adelaide
34 692
1 344
Outer Adelaide
648 355
3 323
Yorke and Lower North
2 068 247
2 234
Murray Lands
3 271 603
3 681
South East
1 895 334
2 562
Eyre
4 180 168
1 480
Northern
37 966 236
1 212

Source: Agricultural Commodities: Small Area Data, Australia, 2006-07 (cat. no. 7125.0)



THE 2006 DROUGHT

The Bureau of Meteorology defines a drought as 'a prolonged, abnormally dry period when there is not enough water for users' normal needs.' (Bureau of Meteorology, 2008). During 2006, South Australia experienced very dry conditions, with many areas of the state receiving only about 50% of their annual average rainfall, according to the Bureau of Meteorology.

The following maps show seasonal rainfall in South Australia in 2006 and how rainfall totals deviated from historical averages. During Autumn, most of the state experienced average to below average rainfall and in Winter, rainfall was well below average and particularly deficient over agricultural areas of the state. During Spring 2006, most areas of South Australia experienced rainfall totals which were well below average, with many centres recording their lowest totals on record.


Seasonal rainfall percentiles in SA during 2006
Diagram: Seasonal rainfall percentiles in SA during 2006


Agricultural income

Agricultural income can be defined as the income that is left to farmers after all their operating costs have been met (ABS, 2006). Agricultural income tends to vary significantly from year to year due to variations in agricultural production and the prices farmers receive for their products. The drought conditions during 2006 had a substantial effect on the income of South Australian farmers in 2006-07. As shown in the graph below, agricultural income (in current prices) decreased by 51.7% from $1,233m in 2005-06 to $596m in 2006-07. There has been a general decline in income from the agriculture industry over the last six years from a peak of $2,311m in 2001-02.

Agricultural income, South Australia, Current Prices
Graph: Agricultural income, South Australia, Current Prices



Commodities produced

The fall in agricultural income in 2006-07 was primarily due to a fall in the volume of agricultural commodities produced in South Australia. The following table shows the volume and value of selected agricultural commodities produced in South Australia. The commodities shown are generally the highest valued agricultural commodities produced in South Australia.

Over the last 10 years, wheat has generally been one of the highest valued agricultural commodities produced in South Australia. However, the value of wheat produced in 2006-07 was only $341m, down from $829m in 2005-06. This was by far the lowest value of wheat production in South Australia over the decade beginning 1996-97. Only 1.4m tonnes of wheat were produced in South Australia in 2006-07, down markedly from the 3.9m tonnes in 2005-06.

Similarly, the volume of grapes produced in South Australia decreased from 886,000 tonnes in 2005-06 to 586,000 tonnes in 2006-07. The value of grape production was down 28% during this period, from $598m in 2005-06 to $430m in 2006-07.

The gross value of sheep/lambs and cattle/calves has increased over the last ten years and despite the drought, has remained relatively stable since 2004-05. However, the number of livestock slaughterings did increase in 2006-07. The number of sheep/lambs slaughtered in 2006-07 was 4,666, up from 4,171 in 2005-06. According to the Australian Bureau of Agricultural and Resource Economics (ABARE), the drought has reduced the quantity and quality of pasture available, which has led to farmers reducing their livestock numbers by selling lamb and cattle for slaughter (ABARE, 2007). The production of lamb and cattle is likely to be reduced in the next few years as producers reduce sales in order to rebuild livestock numbers for breeding (ABARE 2007).

Main agricultural commodities produced in South Australia, Volume and gross value

Grapes
Wheat
Barley
Sheep/Lambs
Cattle/Calves
Year
('000t)
($m)
('000t)
($m)
('000t)
($m)
('000)
($m)
('000)
($m)

1996-97
n.a.
298.3
n.a.
602.1
n.a.
358.6
2 731
134.5
384
137.6
1997-98
461
473.9
2 689
542.2
2 027
328.5
3 143
175.9
393
158.2
1998-99
497
540.3
3 310
641.0
2 501
303.5
3 487
148.2
298
129.4
1999-00
483
471.8
2 586
534.7
1 409
243.7
4 059
137.9
332
187.5
2000-01
676
752.4
4 162
1 069.3
2 320
495.7
4 364
192.8
328
230.5
2001-02
698
693.5
4 778
1 309.6
2 782
587.6
4 268
329.8
342
272.6
2002-03
617
597.0
2 072
543.6
1 440
383.9
3 983
333.7
370
233.5
2003-04
886
788.9
3 490
781.9
2 691
453.4
3 863
315.7
350
242.8
2004-05
862
670.3
2 621
531.1
1 979
304.1
4 155
303.9
364
276.6
2005-06
886
597.7
3 853
829.3
2 548
403.8
4 171
307.0
329
266.1
2006-07
586
430.1
1 446
340.5
996
226.4
4 666
307.5
347
286.3

Source: Agriculture Commodities, Australia (cat. no. 7121.0), Historical Selected Agricultural Commodities, by state (1861 to present), 2005 (cat. no. 7124.0), Livestock Products, Australia (cat. no. 7215.0), Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0)



Exports

The value of agricultural exports from South Australia in 2006-07 was $678m, constituting 7.5% of all exports from South Australia. The value of agricultural exports as a proportion of total exports for South Australia has steadily decreased over the last five years from 18.2% in 2001-02 to 7.5% in 2006-07.

Agriculture exports as a proportion of total exports, South Australia
Graph: Agriculture exports as a proportion of total exports, South Australia



Employment

In 2006-07, the average number of people employed in the agriculture industry was 31,870 people. Over the last decade, there has been a gradual decline in employment from an average of 45,064 people employed in 1996-97.

Employment in the Agriculture industry, South Australia (a)
Graph: Employment in the Agriculture industry, South Australia (a)


The decline in the number of people employed in the agriculture industry has been mainly due to a fall in Own account workers (workers who operate their own economic enterprise and hire no employees). There were 24,203 persons employed in the agriculture industry as Own account workers in 1996-97, but by 2006-07 this had fallen to 11,679. The number of Employees in the agriculture industry actually increased during this period, from 12,396 in 1996-97 to 15,902 in 2006-07.

The agriculture industry includes a greater proportion of Employers and Own account workers compared to Other industries in South Australia. In 2006-07, 36.6% of those employed in SA's agriculture industry were Own account workers, while 11.5% were Employers and 49.9% were Employees. This compares to Other industries in South Australia as a whole, where 9.4% were Own account workers, 3.1% were Employers and 87.3% were Employees.

Employment type for Agriculture industry and Other industries, South Australia - 2006-07

Agriculture industry
Other industries(a)
1996-97
2006-07
1996-97
2006-07
no.
%
no.
%
no.
%
no.
%

Employee
12 396
27.5
15 902
49.9
524 875
86.3
659 333
87.3
Employer
5 059
11.2
3 672
11.5
19 786
3.3
23 263
3.1
Own account workers
24 203
53.7
11 679
36.6
59 020
9.7
71 190
9.4
Contributing family workers
3 406
7.6
617
1.9
4 551
0.7
1 647
0.2
Total(b)
45 064
100.0
31 870
100.0
608 231
100.0
755 433
100.0

(a) Includes industry not stated
(b) Includes employment status not stated
Source: Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003)



Conclusion

The 2006 drought has had an impact on the agriculture industry in South Australia, which experienced a significant drop in income in 2006-07. Agricultural exports as a proportion of all South Australian exports have more than halved over the last decade and employment in the agriculture industry has gradually decreased. Although many of South Australia's main commodities including grapes, wheat and barley showed large decreases in production and gross value, the gross value of livestock increased slightly due to a high rate of slaughterings as a result of the dry conditions. However, the production of lamb and cattle is likely to be reduced in the next few years as producers reduce sales in order to rebuild livestock numbers for breeding (ABARE, 2007).


Sources

ABARE 2007, Australian Lamb 07.2, May 2007, viewed 5 August 2008

ABS 2006, Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0)

ABS, Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0)

ABS, Agricultural Commodities: Small Area Data, Australia, 2006-07 (cat. no. 7125.0)

ABS, Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003)

ABS, International Trade in Goods and Services (cat. no. 5368.0)

Bureau of Meteorology, 2008, viewed 4 August 2008, http://www.bom.gov.au/climate/drought/livedrought.shtml

National Agricultural Monitoring System (NAMS), 2008, viewed 2 May 2008, <http://www.nams.gov.au>


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