CHANGES IN AGRICULTURE

IBISWORLD REPORT -from the desk of Phil Ruthven.

Agriculture was once 50% of our GDP, even 25% in 1950, and is now 2%.

Manufacturing was once 29% of GDP (in 1960) and is now just over 7%.

Interestingly, both these old-and-bold industries are expected to experience a renaissance of sorts during the 21st century – not back to their once-dominant positions in the economy, but a revival nevertheless, in a new form.

Agriculture will emerge more like mining, by going corporate, capital-intensive, Asian export oriented and largely foreign owned, as the mining industry did 50 years ago.

Agriculture cannot survive and become even a small food-bowl in its present SME ownership form, as heartless as that might sound; it has to follow the lessons of mining. The blocking of the Graincorp sale to ADM was regressive in this regard, showing ignorance of where our future lies. But Banjo Paterson, Dorothea Mackellar, Henry Lawson and other icons will survive this coming revolution, at least in continuing folklore and legend.

The manufacturing sector will become a very different sector too, but in many cases made up of more medium-size enterprises with high-tech/3D technology where applicable and more IT-based than the old craft and engineering skills that many think must be retained at all costs (but not so).

Franchising systems and international strategic alliances will be critical elements in the renaissance of both these industries.

A nation must be prepared to shed the old in favour of the new. We see that challenge in retailing in the first decades of the new century. That industry has gone through three revolutions over several centuries: the move to specialty stores in the 1820s, the move to chain stores in the 1890s and the move to self-service in the 1960s. We can hear the bleating today of the winners of that last revolution as the fourth revolution is descending like a tsunami in the form of online retailing. It is vital that the marketplace and progressive technology win, not the regressive players demanding protection.