The Commonwealth of Australia is situated in Oceania and is “the world’s sixth-largest country” (“Our Country” par. 10). Colonized in the 19th century, Australia has become a developed and wealthy country with a mature agricultural economy sector. Nowadays, this is one of the 20 largest world economies. The regions of the country include New South Wales (commonly abbreviated as NSW), Victoria (Vic.), Queensland (Qld), South Australia (SA), Western Australia (WA), Tasmania (Tas.), Northern Territory (NT), and Australian Capital Territory (ACT) (Australian Bureau of Statistics par. 1). The largest cities are the capitals of the states of New South Wales and Victoria, that is, Sydney and Melbourne (“Our country” par. 5). Canberra is the capital of the Commonwealth.
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The current population of the country is estimated to be 23.2 million (2015 Index of Economic Freedom par. 4). Most of it is situated in the coastal regions while the center of the continent is not very densely populated.
Culture, History, and Nature
Australian culture is very diverse as the country is multiracial, which is reflected in all the aspects of people’s life: from food to religion. This is at least partially the result of the historical development of the country. The aboriginal people of Australia had supposedly migrated to Australia from Asia about 50,000. Even though the first Europeans to visit Australia were the Dutch (it happened in the 17th century), it is Captain James Cook who is commonly credited with this discovery. The first European settlement to appear in Australia in 1788 was a penal colony. However, in the following years, free settlers were attracted by the land, and soon the status was abolished (“Our Country” par. 2-5).
The climate in Australia is temperate, sub-zero temperatures being a rare occurrence. However, due to the mountain snow, in certain states of Australia (New South Wales, for example) ski resorts are functioning (“Our country” par. 7-9). At the same time, it has been stated that “Australia is the world’s driest inhabited continent with the largest variability in rainfall” (Hochman et al. 110). The latter fact poses particular difficulties for the agricultural development of the country.
Politics and Economy
The gross domestic product (GDP) of Australia amounts to $999.6 billion, with 2.5% 5-year compound annual growth (see fig. 1). The government of Australia has put an emphasis on developing a free economy since the 1980s, and it appears to still regard this factor as a priority nowadays. For example, in 2014, the government stopped controlling the price of electricity (2015 Index of Economic Freedom par. 7).
The political environment of the country has been described as stable, the property rules as secure, judicial system as independent and unbiased (2015 Index of Economic Freedom par. 5-7). These factors, along with the high monetary stability and firm control over inflation, have earned the country the fours place in the 2015 Index of Economic Freedom (part 1). Australian start-up companies are encouraged with the help of flexible licensing and simple regulations. Apart from that, the country possesses a stable banking system of privately owned banks (2015 Index of Economic Freedom par. 2-8).
Agricultural Industries in Australia
Overview. Major Produce
The history of agriculture in Australia is relatively recent: since the settlement in 1788, it expanded slowly at the beginning of the previous century, after which it flourished, developing at a particularly rapid pace between 1960 and 1990 (Bellotti and Rochecouste 21). Nowadays, the agricultural industry in Australia is very well-developed. More than half of Australia’s land is dedicated to the industry (Hochman et al. 111). The agricultural economy sector of the country includes vegetable, berry, and fruit (apple, pear, citrus) growing, rice and other grain growing, sugar cane growing, cotton growing, cattle (beef, sheep, pig), and poultry farming as well as other industries. The Australian Bureau of Statistics offers a chart of the number of agricultural industries in every region of the country (see table 1).
Table 1. Business with main agricultural activity, by state and territory, years 2009-2010
The regulation of the industry is provided by the Australian Government Department of Agriculture. The Department works with the development and implementation of relevant policies, provides quarantine and inspection along with the certification of the exported goods. Apart from that, it is concerned with the protection of the natural country’s resources and the economic and environmental research and advice (The Australian Government Department of Agriculture Website par. 1-5). At the same time, free trade is promoted in Australia, and government intervention (including subsidies as well as quotas) is discouraged (Bellotti and Rochecouste 21).
Farming Systems and Technology used
Australian farmers are especially initiative regarding innovation, and they have demonstrated the willingness to experiment and develop their business (Bellotti and Rochecouste 31). Australian organizations like the National Association for Sustainable Agriculture have been emphasizing the importance of increasing the efficiency in resources use and minimizing the negative impact on the environment, including the preservation of biodiversity which has been reflected in the regulations of the Department of Agriculture (The Australian Government Department of Agriculture Website par. 1-5). As a result, conservational agriculture, which is regarded as a solution towards increasing and maintaining efficiency and sustainability, has become popular in Australia (Bellotti and Rochecouste 21).
The agriculture of Australia can be regarded as innovative. In the future, further intensification of agriculture with regard to ecological development is to be expected. The technologies used in the industry are, in many cases, aimed at the efficient management of scarce resources, one of which is water (Hochman et al. 110).
The issue of irrigation in Australia can be regarded as a difficulty since the water use depends on rainfall and, therefore, draughts can become a major problem (Hochman et al. 112). The sources of agricultural water include irrigation channels, on-farm dams and tanks, and groundwater. The percentage of using recycled water and other sources is very small (see fig. 2).
In 2012-2013, the total water consumption in Australia was 19,749 GL, 17,898 GL used by industry, and 1,851 GL by households as is stated in the catalog number 4610.0 of the Australian Bureau of Statistics (para. 4). As for the agricultural use of water, it amounted to 11 561.9 ML (see fig. 3).
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The Australian Bureau of Statistics (catalog number 1301.0) states that organic produce constitutes about 1% of the retail turnover, its annual growth estimated between 10% to 25% (para. 14-16). The market of organic food exists in Australia for more than 20 years, and about one-third of the product is currently meant for export (Lockeretz 225, 227).
The National Association for Sustainable Agriculture, Australia (NASAA) plays a significant role in the process of organic farming popularization, development, and control (Lockeretz 225). Given the benefits that are commonly attributed to the industry (the chemical-free environmentally-friendly products that cannot cause addiction and does not contain genetically modified elements), its popularity in the country is expected to continue to increase.
It should be pointed out that GMO moratoria in Australia are not all-encompassing and vary depending on the region (Paull 7). However, the overall area of certified organic land in Australia is bigger than that in any other country, as it constitutes over 12.0 million hectares of certified organic land (Paull 8).
Export. Australia is a major agricultural exporter; its key export produces being “beef, wheat, sugar, wool, barley, dairy, and wine” (Bellotti and Rochecouste 21). According to the Australian Government Department of Agriculture Website, about one-third of the overall agricultural produce of the country is being exported (par. 1). Apart from that, a program aimed to help small exporters has been launched in 2013 (The Australian Government Department of Agriculture Website par. 3). It involves funding the small export projects to improve access to the market for small businesses. As a result, the export rates of the country appear to have been growing relatively steadily for the past several decades (see fig. 4). The inspection and certification of the exported goods are carried out by the Department of Agriculture.
Given the relatively scarce government support, farmers of Australia have proved to be initiative and have been expressing interest in the implementation of the new technologies discussed above. For example, the Crop Science Society (founded in 1975) has become a major forum for the communication between farmers and scientists (Bellotti and Rochecouste 22). As a result, the development of agriculture in Australia is, in many ways, promoted by the farmers themselves.
Unfortunately, certain characteristics of the Australian workforce could be regarded as a disadvantage. The issues of Australian agriculture “include depopulation, ageing, poor service infrastructure, and growing inequalities, particularly in the area of health” (Alston 200). The depopulation is caused by the fact that younger people tend to leave the rural areas, preferring white-collar jobs in the cities, which results in the aging workforce of the Australian agriculture business.
As the workforce diversity increases and changes, the Australian government attempts to respond, for example, through the legislation aimed at eliminating age discrimination (Kossen and Pedersen 74). Still, the issue of aging and diminishing farming workforce in the country remains a problem to be solved (see table 2).
The unemployment rate in the country is 5.6% (2015 Index of Economic Freedom par. 4).
Table 2. Employment in the Australian agriculture industry
Recommendations to Invest in Australia
The globalization of Business and Cross-Cultural Communication
Globalization, as a process of international integration, has embraced the life of modern society on all levels, including the social and cultural ones (Alston 198). Australia has proved to be a competitive agricultural producer, which turns the country into an appealing investment option.
The issue of cross-cultural communication arises in the context of globalization and international trade and investment. With the increasing diversity of economic contacts, the necessity for cross-cultural communication skills becomes especially relevant. Those include, first of all, the need to take into account the differences between the partners belonging to different cultures and as well as exploiting the advantages offered by the similarities in their worldview (Reeves 7-14). Such an approach towards international businesses helps to avoid misunderstandings and increases the efficiency of communication along with the outcome of deals and cooperation.
Investing in Australia
Porter’s diamond model could be used to describe the opportunities offered by the Australian agriculture industry. The model includes a number of determinants of the competitiveness of an industry, namely the “factor (input) conditions, home demand conditions, related and supporting industries and industry strategy structure, and competitiveness” (Ozgen 64). The input factors of Australia have been characterized above, and, as it has been mentioned, they include both positive (for example, the vast volumes or the innovative nature of agriculture) and negative ones (for instance, water or population issues). However, as it is pointed out in the diamond model, the positive input factors can be used to eliminate the negative effect of the adverse ones, which can be illustrated by the usage of innovative technologies for ecologically efficient agriculture.
Apart from that, the role of government as a factor capable of modifying the first three of the determinants is pointed out in the diamond model (Ozgen 64). One of the pluses of investing in Australian agriculture is the fact that the government is encouraging a free economy in the country. Definitely, this presupposes lesser support. Still, in the 2015 Index of Economic Freedom, Australia is ranked number 4, which makes it one of the five economically free countries of the world and an appealing place for business development (par. 1).
The political environment of the country has been described as possessing effective anti-corruption measures along with with “well-established and transparent political processes, a strong legal system, and a professional bureaucracy” (2015 Index of Economic Freedom par. 6). Possibly, as a result of sound economic politics, Australia has enjoyed more than two decades of economic expansion, which increases its appeal as an investment option (2015 Index of Economic Freedom, par 5). Finally, being one of the 20 largest world economies, Australia is expected to stay among them for the next several decades and, possibly, achieve a higher ranking in the future (Smialek par. 2). All of these factors make investing in Australia an appealing option.
2015 Index of Economic Freedom. The Heritage Foundation, 2015. Web.
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