Adapting to the changing climate could mean pressure on the bottom line for agriculture

Production and exports from Australia’s agricultural sector are tipped to hit record levels in 2022-23, but there may be pressure on profits from adapting to the negative effects of climate change.

That’s the conclusion from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) “Snapshot of Australian Agriculture 2023” report published this month, which notes challenges ahead requiring due care for an industry that otherwise continues to “grow and perform strongly”.

“We’re anticipating farms facing pressures to adapt to the negative effects a changing climate will have on profit,” says ABARES’ Executive Director, Dr Jared Greenville.

Jared greenville
Dr Jared Greenville

“In addition, sustainability is an increasingly important attribute to both consumers and investors in all markets, including agriculture, and sustainability credentials are being included in trade policies and investment criteria in many countries.”

Agriculture accounts for more than half of Australian land use and one-quarter of water extracted.

It also provides jobs for 2.5% of Australians and produces more than one-tenth (11.6%) of the nation’s exported goods and services.

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But with the recent run of wet years expected to end, rainfall patterns are likely to shift back to normal, says Greenville.

“Despite the deteriorating conditions, strong soil moisture, full water storages and the rebuilding of our herds and flocks will provide a buffer for overall production, giving us another year in the high country.

“On many criteria, Australia’s agricultural industries are already very sustainable compared to our competitors in global markets.

“We need to be careful to ensure we maintain that advantage.”

The annual ABARE report describes the current state of Australian agriculture and delivers key information and statistics across eight aspects of the sector: role in the economy; production trend; farm incomes; industry structure and productivity; climate change; jobs; sustainability; and trade.

The report lists several sustainable practices being used in the sector, including broadacre cropping farms retaining stubble, minimising tillage and optimising the use of – and reducing reliance on – pesticides or fertiliser. It also lists the use of grazing management systems such as cell, trip or rotational grazing, and setting a long-term groundcover requirement.

According to the report, Australia’s farm sector averages around 14-16% of national greenhouse gas emissions, varying with seasonal conditions.

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