Rural and Agriculture Based Industries †Free Samples to Students

Question: Discuss about the Rural and Agriculture Based Industries. Answer: Introduction The dairy industry in Australia is one of the biggest employers of the rural and agriculture based industries. The dairy industry in Australia constitutes almost $1.3 billion export, farm, and manufacturing industry (Research and Markets: Analyzing the Australian Dairy Industry, 2015). The dairy industry is a significant contributor to Australias economy and ranks fourth among the agricultural exports from the country. Australia accounts for approximately 2% of the milk production in the world but on the global level is the fourth largest exporter of dairy and dairy products (Dairy Australia, n.d.). The Australian dairy industry has been facing some tough challenges in the last few years and the fluctuations in the international and domestic market have augmented the crisis being faced by the industry (Research and Markets: Analyzing the Australian Dairy Industry, 2015). Some of the challenges are: The average lifespan of a cow is 20 to 25 years but the dairy cows in Australia have a much shorter life span which is just 6 to 7 years. This is because the cows that are being used in the Milk production are being continuously subjected to impregnation, and forcefully induced calving to have a regular supply of milk production. This has a negative impact on the complete lifecycle of the dairy cows negatively impacting the whole industry (Villanueva, 2016). Livestock and dairy farming accounts for almost 70% of the available agricultural and pastoral land and accounts for 3% of the total greenhouse emissions in Australia. This has a significant impact on the environmental and climatic conditions in Australia (Villanueva, 2016). The seasonal nature of Australian farming, the lack of expertise in grazing and herd management, and the changing weather and climatic conditions have all had a negative impact on the Australian Dairy sector which has resulted in a lack of capital investment in the dairy sector (Dairy Industry Overview, 2016). Further, the increasing age of the dairy farmers is making way for the natural exit of many of the dairy producers in the coming few years which would negatively impact the milk supply (Theme 5 - Market growth - Australian Dairy Farmers, 2014). The constraints on milk supply, in turn, affect the whole supply chain process and result in lower investments in technology and scale of operations in dairy manufacturing. As a consequence of this factor the Australian dairy supply chain loses out on cost-competitiveness to the other global competitors (Growing the NSW Dairy Industry, 2014). On the global level, the dairy industry has been facing an increasing competition from the European countries, USA, and New Zealand. This has resulted in reducing international rates for milk and milk products which have affected the dairy industry (Worthington, 2017). The trade war which resulted from the growing tensions between Russia and Ukraine has lead to trade bans being imposed by Russia on all the Western imports. This prevented the western dairy and dairy related products from entering Russia and this directly impacted the dairy farming in Australia. The European countries with their surplus supply of milk and milk products turned to the Asian and the other markets where Australia was a major supplier (Villanueva, 2016). Growth Opportunities and Potential for Australian dairy Industry Rising income levels lead to increase in the per capita expenditure on food and also on the dietary composition of people. The rising urban lifestyle, especially in the developing countries and increasing disposable incomes, have led to diverse diets and increase in the consumption of protein rich foods like meat, dairy, and eggs, leading to an increase in the demand for dairy and dairy products all over the world. This presents a unique opportunity to Australias dairy industry to grow and expand their export operations across the world (Growing the NSW Dairy Industry, 2014). Many of the developing countries do not have sufficient domestic production to meet their growing dietary requirements of milk and milk related products due to the lack of infrastructure, natural resources, and inhospitable climate. So, these nations are dependent on the imports from other countries to meet their growing demand providing a growth opportunity for Australian dairy industry (Theme 5 - Market growth - Australian Dairy Farmers, 2014). Australia has been maintaining a competitive advantage over its rivals by targeting the high-value segments and gradually moving away from the increasingly competitive volume market globally. Asian economies like the Philippines which recorded an approximately 31% growth in international milk imports to the country in 2014 and Indonesian market which has over twenty million children under the age of four, present tremendous opportunities for growth for the Australian dairy industry (Bennet, 2015). China already accounts for almost nineteen percent of the export of dairy and dairy related products from Australia. With the Chinese government lifting the ban on one child policy, the dairy market in China is expected to grow even further. In todays market scenario the total milk import requirement of China far exceeds the total milk production in Australia. The China-Australia Free Trade Agreement provides a huge opportunity for growth to the Australian dairy industry as it gives Australia a chance to capitalise on the increasing demand from the Chinese market (Bennet, 2015). Conclusion There have been investments from the multinational companies and the government in developing the dairy industry in Australia with a commitment to address the ethical and environmental concerns along with addressing the infrastructure development issues (Dairy Australia, n.d.). The growth in the international dairy demand is stemming from the very competitive Asian markets and the other developing economies. To meet this demand in a more profitable manner and maintain a competitive advantage over rivals is a challenge which Australian dairy industry has to meet with its developmental policies and strategies (Research and Markets: Analyzing the Australian Dairy Industry, 2015). References: Bennet, M. (2015, November 4). Can Australia meet Asia's growing dairy demand? Retrieved from: https://bluenotes.anz.com/posts/2015/11/can-australia-meet-asias-growing-dairy-demand Dairy Australia. (n.d.). Retrieved from: https://www.dairyaustralia.com.au/ Dairy Industry Overview. (2016, June). Retrieved from: https://www.kollinscapital.com.au/wp-content/uploads/2016/06/DairyIndustryOverview-WEB-SINGLE.pdf Growing the NSW Dairy Industry. (2014, September). Retrieved from: https://www.dpi.nsw.gov.au/__data/assets/pdf_file/0008/526688/Growing-the-dairy-industry.pdf Research and Markets: Analyzing the Australian Dairy Industry. (2015, January 27). Retrieved from: https://www.businesswire.com/news/home/20150127005850/en/Research-Markets-Analyzing-Australian-Dairy-Industry-2015 Theme 5 - Market growth - Australian Dairy Farmers. (2014, March 13). Retrieved from: https://www.australiandairyfarmers.com.au/PDF/Theme-Market-Growth.pdf Villanueva, G. N. (2016, May 24). There are a lot more problems with the dairy industry than the price of milk. Retrieved from: https://www.businessinsider.com.au/there-are-a-lot-more-problems-with-the-dairy-industry-than-the-price-of-milk-2016-5 Worthington, B. (2017, January 29). Understanding the dairy industry and why it soured to the point of crisis. Retrieved from: https://www.abc.net.au/news/rural/2017-01-27/understanding-the-dairy-crisis/8184510