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Terry Sheales

Kununurra Regional Outlook Conference Wednesday 20 May 2009. Economic issues affecting the region. Terry Sheales. Deputy Executive Director. Commodity market drivers Key challenges for the future climate change and the CPRS allocating water productivity growth. Real 2004 Dollars.

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Terry Sheales

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  1. Kununurra Regional Outlook Conference Wednesday 20 May 2009 Economic issues affecting the region Terry Sheales Deputy Executive Director

  2. Commodity market drivers • Key challenges for the future • climate change and the CPRS • allocating water • productivity growth

  3. Real 2004 Dollars

  4. What will be the impact of the CPRS on the farm sector?

  5. Agriculture and the CPRS 2011: CPRS commences agriculture initially excluded from the scheme 2013: decision to include agriculture or not 2015: earliest possible date of inclusion

  6. Australia’s greenhouse gas emissions, by sector, 2006 Mt CO2-eq

  7. Agriculture and the CPRS: 2010percent change in agricultural input costs %

  8. Agricultural production with the CPRS Per cent change relative to no CPRS Percent change in agricultural production with the CPRS %

  9. without CPRS

  10. without CPRS

  11. Options for reducing emissions from agriculture • improved feed conversion efficiency • feed additives • alter fertiliser applications • waste management • carbon sequestration • GM technologies

  12. Efficient allocation of water

  13. Water availability • CSIRO • 11% availability by 2030 • ABARE • 3% incomes

  14. Lifting productivity • Remains the key to handling pressure on the farm sector • Whether it be: • seasonal variability and drought • climate change • CPRS • global food crisis • global economic crisis • protectionist responses

  15. publicly funded expenditure 2007A$million Source: Mullen and Crean 2007

  16. How do we lift productivity growth? • Measure productivity and understand its drivers • Improve R&D effectiveness • encourage further business R&D • improve targeting and evaluation of public good R&D • Remove government impediments to productivity growth • efficient water allocation • efficient climate change policies • efficient drought policies

  17. Conclusions Unprecedented declines in economic growth but a resilient farm sector response Long run challenges exacerbated by the global economic crisis Productivity growth slowing – just when we need it to be accelerating Further reforms in water allocation systems and R&D policies needed.

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