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While the key characteristics of traditional agricultural production in Australia are well documented, there is a vast array of agricultural commodities produced in Australia for which there is relatively little public information.

The purpose in this project is to help address this gap in the availability of public information on the less well-documented industries.

The Target
The report is targeted at industry and government interests in improving productivity, trade and R&D for new animal and plant species.

Background
The existence of public information on prospective agricultural industries is important. New and emerging industries have a key role in providing growers with the ability to spread risk through diversification, thereby offering regional resilience. They can also confer regional distinctiveness - such as tropical fruits in Far North Queensland. The lack of reliable statistics about emerging industries can hamper their development. The availability of information can significantly influence the availability of commercial funds because lenders and potential investors require access to reliable statistics. Only when statistics exist can effective policies be developed for the emerging agricultural industries, such as in targeting research and development and in promotion activities.

 Emerging industries are often difficult to identify, particularly during their early development phase. Some are not necessarily producing new products. For example, goats have been farmed for milk for centuries, and have been in Australia since first settlement by Europeans.

 However, with recent initiatives to establish an organised industry, it could be classified as an emerging food industry. Other foods, such as wasabi and rambutan, are new to Australia, while others (such as crocodiles and bush foods) are indigenous to Australia but unfamiliar to the food market.

 Official statistics produced by the Australian Bureau of Statistics are an important source of information but do not cover a range of agricultural commodities produced in Australia. While there are other sources of information on emerging industries, these are often difficult to access and to establish comparable, robust statistics on the industries.

 With increasing diversity of animal and plant production as producers seek to diversify away from traditional crops and livestock, there is an ongoing challenge to ensure that these products are incorporated in rural statistics.

 Many of these emerging industries in Australia produce a diverse range of products. For example, goat industries can produce meat, fibres, milk, leather and a range of other by-products. RIRDC classifies around 80 different agricultural commodities as coming from emerging industries. Information on these emerging agricultural industries and new products from existing industries is highly valued by the industry, by trade and consumers in Australia and overseas. Around 50 per cent of the value of emerging livestock products comes from export sales.

The Aims
This project provides a set of supply and utilisation tables for each of those agricultural industries in Australia that are defined as ‘emerging’ by RIRDC (excluding the organic industry), taking into account that each of these industries may produce a number of different products.

 Information is also provided on the nature of the international market for each commodity because an understanding of this is important in guiding the gathering of appropriate information. For example, where no price data are available in Australia, international sources can provide reasonable indicator prices that can be employed.

Methods Used

Production valuation
The definition of gross value of production used in this analysis is that of the Australian Bureau of Statistics. According to ABS (2001), the gross value of commodities produced is the value placed on recorded production at the wholesale prices realised in the market place. The ‘market place’, in general, is the metropolitan market in each State. In cases where commodities are consumed locally, or where they become raw material for a secondary industry, these points are presumed to be the market place.

 The value of livestock slaughterings and other disposals is published as one figure but include two distinct components: value of livestock slaughtered; and value of net exports — that is, the total value of livestock intended for slaughter in adjacent State(s) where available (at present these can only be identified between the Northern Territory and adjacent states) and livestock exported overseas, whether for slaughter or breeding, minus the value of imports of livestock.

 A feature of many emerging animal industries is that they are in the process of building up flock or herd numbers. At this stage of industry development, there is usually little production that requires slaughter of animals (for example, meat and hides) and very strong intra-industry trade and prices with breeding livestock.

 This trade, however, is traditionally not considered as part of the value of the industry for estimation purposes so is not included in this analysis.

 It should be noted that the value of production of an industry will often be less than the value of the industry’s exports. This is because there is substantial value added through processing before products are exported. For example, the tanning process with animal skins adds considerable value.

 Data sources The Australian Bureau of Statistics is a key source of Australian information for this project, particularly for trade data.

 Another highly useful source of information for a number of commodities is the Levies Revenue Service (LRS), an organisation within the Australian Government Department of Agriculture, Fisheries and Forestry. The LRS is responsible for both the collection and distribution of levies to the various statutory research and development corporations, statutory marketing authorities, Animal Health Australia and the National Residue Survey. LRS is also responsible for the distribution of the Australian Government’s matching levy for research and development contributions. The LRS collects over 60 different levies and charges from a client base of over 10 000 levy payers. The nature of levies being applied on the products from emerging industries is outlined in Appendix B. More information on the LRS and levy arrangements is available at www.affa.gov.au/levies.

 The other key sources of information in Australia are state departments responsible for agriculture and key industry representative bodies. The Department of Business, Industry and Rural Development in the Northern Territory was particularly useful in this respect because its activities have an orientation toward developing industries.

 Knowledge of the supply chain for each commodity gives some indication of where the best place is to gather statistics for that industry.

 For example, the centralised nature of the marketing systems with the goat fibre industries (mohair and cashmere) made gathering of production statistics reasonably straightforward.

 The meat processing industry has readily identifiable points for gathering data because meat must be processed through a limited number of licensed processing establishments. Furthermore, there are regulatory bodies in each state that collect statistics on animal slaughter numbers for monitoring purposes.

Results
The contribution of each industry to the Australian economy in terms of value of production and exports is presented in Table 1.

 It should be noted that the value of exports can be more than the value of production because of value adding throughout the supply chain.

Implications
In reality, the selected industries encompass a range of stages of development. For example, the exotic tropical fruit industry is at a very early stage of development, with domestic and export growth prospects based on producing something that is familiar to many Australians of Asian origins and to an increasingly affluent population throughout Asia. At the other end of the scale, the sizes of the goat fibre (cashmere and mohair) industries in Australia are considerably smaller now than they were a decade ago.

 Moreover, many of the emerging industries have long and sometimes chequered histories in Australia. For example, an Australian coffee producing industry emerged then virtually disappeared at least once over the past century. It appears to be ‘emerging’ again because mechanical harvesting has offset the labour cost impediment to industry development and because of an increasing willingness among coffee drinkers to pay premiums for ‘Estate grown’ coffees with pleasingly distinctive flavours.

 In 2003-04, the gross value of production of the selected animal industries was an estimated $204 million, and they earned export revenue of $140 million. The biggest of these industries were the kangaroo, game bird and meat goat industries, together accounting for 84 per cent of the total value of production and 78 per cent of total exports. With the exceptions of the dairy goat and deer industries, the emerging animal industries face little competition from imports (Table 1). This is partly because of Australia’s strict quarantine laws on livestock products. However, competition from New Zealand in the domestic venison market is increasing.

 The gross value of production of the selected emerging plant industries in 2003-04 was an estimated $470 million, largely contributed by the more mature emerging industries — that is, the Asian vegetable, pasture seed, macadamia, exotic fruit (mainly lychees) and wildflower industries (Table 1). Most of the emerging plant industries are export oriented, with total exports in 2003-04 of $291 million.

 Some emerging plant industries face strong competition from imports, particularly the coffee, olive, sesame seed and spices industries. The total value of these imports was $427 million in 2003- 04. There is likely to be increasing competition from Thailand for the Australia tropical fruits industry following favourable import risk assessments and the signing of the Australia-Thailand Free Trade Agreement.

 In the case of seasonal products such as tropical fruits, the Australian industry niche appears to lie with supplying fresh product outside the main production periods of the main exporting countries that appear to have substantially lower production costs Together the selected emerging industries had an estimated gross value of production of $674 million, equivalent to 2.2 per cent of the total value of Australian farm production in 2003-04. They earned estimated export revenue of $431 million, or 1.6 per cent of total farm export revenue in 2003- 04. These shares are likely to grow in future years because — as the term ‘emerging’ suggests — many of the emerging industries appear to have strong growth prospects.

 There are also several reasons why these values are underestimated.

 For instance, export statistics used in this report to the wildflower industry could considerably understate the value of exports to some countries. This is because prices received are only known when flowers are sold at auction in the destination country.

 Additionally, the social values of at least some of these emerging industries are considerably higher than the estimates presented in Table 1. With some animal based industries, this is because they involve the harvesting of feral populations of animals in Australia — for example, feral pigs and camels — that have adverse environmental impacts.

 The industries based on the use of Australian native plants as flowers and food could be contributing to the conservation of rare Australian plants through ensuring that they are cultivated more widely than their natural habitats.

 Reafforestation using oil mallee and sandalwood trees and in Western Australia is helping both control salinisation of agricultural lands and reduce greenhouse gases.

 Due to resource constraints, some emerging industries are not included in this compendium.

 These include the dairy sheep, herb and plant fibre (such as hemp and flax) industries.

Recommendations
It is recommended that the statistics presented in this report are expanded and updated periodically to measure both trends in Australia and internationally as a guide for industry, government and future R&D.

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Last updated: November 2005
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http://www.rirdc.gov.au/reports/NPP/05-154sum.html