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Feature Article - Impact of 2003-2004 Farm Season on Australian Production
AGRICULTURAL PRODUCTION, Chain volume measures(a) : Seasonally adjusted
In the Australian System of National Accounts, industry estimates of value added are presented at basic prices, in accordance with international standards. Such estimates give a better indication of an industry’s actual value added as they exclude the taxes less subsidies on the products produced by an industry. It is projected that gross value added at basic prices for the agriculture industry will rebound from $16,837 million in 2002-2003 to $21,555 million in 2003-2004, a rise of $4,718 million or 28%.
The graph below, in seasonally adjusted chain volume terms, shows the projected outputs for five major categories of agricultural output. Most of these data are based on ABARE forecasts. The improved performance of the farm sector in 2003-2004 is expected to be driven by cropping industries, with the rise in the output of cereals forecast to more than double in 2003-2004. Caution should be exercised in interpreting the quarterly seasonally adjusted forecasts as revisions to the seasonally adjusted estimates may be expected as additional information becomes available.
FARM OUTPUT(a), Chain volume measures(b)-Seasonally adjusted
For a complete picture of the impact of the improved farm production on GDP, both the direct and indirect effects of the sector must be considered. Indirect effects can be put into two categories. The first category is the effect on downstream industries, principally transport, wholesale trade and the manufacturing of products from agricultural outputs. The second category comprises the multiplier effects arising from the increased value of production by the agriculture industry and its downstream industries. This has two elements. One arises from any increase in the inputs of these industries which leads to an increase in the production of other Australian industries. The other arises from any increase in factor income of the agriculture and downstream industries that leads to a rise in final expenditures by farmers and others who draw an income from these industries.
In this article no attempt is made to quantify the magnitude of the indirect effects. These indirect effects are described in more detail in a feature article published in the September quarter 2002 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0).
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