Australia’s wheat exports are among the world’s largest and Australia accounts for almost 60% of the global production of wheat. Australia’s wheat export authority has implemented a number of programs to boost the nation’s farming sector, one of which is the Wheat Marketing Regulations (WMO). This government initiative provides direct financial support to farmers for their growing and marketing operations. The aim of WMO is to ensure that the nation’s agricultural producers have access to consistent supplies of food grains at all times and the scheme itself serves as a gauge of Australia’s competitiveness in the international market.
In this context, the WMO was established. The Australian wheat industry is very important to the Australian economy, contributing to more than A$1 billion (U.S.) in exports every year. It is therefore essential that the Australian wheat industry remains on track, both during periods of economic growth and hard times. To this end, the Australian wheat industry has been given tools and support by the federal government to successfully weather whatever difficulties may come its way. It is noteworthy to note that the success of the wheat industry is not only dependent on external factors but also internal factors.
First and foremost, the Australian agricultural base is strong. The country has the world’s fifth largest wheat production base, which accounts for about A$5 billion (U.S.) in exports. Second, Australia’s agricultural base is highly diversified, with crop varieties ranging from citrus fruits, to tomatoes, to potatoes and the like. This diversity serves as an advantage to the Australian exporters, as they have the potential to tap into a variety of international markets.
Moreover, Australia’s wheat production and exports are largely insulated against ups and downs in global markets. This is primarily due to the country’s tight access to the agricultural production, especially in the areas of eastern Australia, where the irrigated croplands dominate the agricultural production. Also, Australia’s large production base in the outback serves as an insurance against competition in the wheat production and export market. Lastly, the political and social climate of Australia favors its exports. The country enjoys free trade policies, and there are no prohibitions when it comes to setting up new trading agreements with other countries.
Australia’s wheat and canola exports are primarily used as feedstock for animal feed and also for making cash. However, the use of these products for such purposes is a controversial issue. While the government considers it safe to export wheat and canola to non-OECD countries, critics argue that the practice is economically inefficient and environmentally harmful. They argue that canola plantations harm water systems and do not contribute to the upliftment of the local agriculture. Furthermore, they argue that the extensive use of the grains hampers the growth of local agriculture and employment opportunities.
With regard to the future of the world’s most important agricultural commodity, Australia’s position is strengthened by its relative abundance. In the past, the continent was vulnerable to trade deficit issues. However, in recent years, with the growth of the Middle East and the rising demand for grain products, the Australia’s trade surplus has significantly improved. Moreover, the agricultural specialists believe that with further liberalization and increased access to new markets, the advantages of Australia’s export boom will further enhance Australia’s attractiveness to the global wheat market. The country is highly vulnerable to trade tensions, so it’s important to diversify its trading partners to ensure consistent agricultural income.
There is certainly scope for further diversification of the agricultural export market. For instance, in 2021, the European Union (EU) started to reduce its import tariffs on certain foodstuffs like sugar and beef. Even countries like India and Pakistan have reduced their import tariffs on select food items. This means that the Australia’s grain reserve, once considered as an area of great agricultural potentiality, is no longer among the world’s top priority for global trade. The future of the market for grain is therefore highly dependent on the direction of international trade policies.
With a view to maintaining a strong agricultural base, farmers are relying more on their local seed. Australian farmers are increasingly innovative in their use of genetic resources. They are able to increase the size of their farming populations by increasing the production of seeds and the development of hybrid varieties of crop plants. A recent study by the CSR group shows that the use of genetic resources is contributing to the increase in Australia’s wheat exports. It is expected that these policies will further boost Australia’s wheat production.