2014 Winter - Can agriculture grow if food processing dies?

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FPJ1102C - Freebairn, J (2014), Drivers of Industry Success and Decline

Freebairn, J (2014), Drivers of Industry Success and Decline, in Farm Policy Journal: Vol. 11, No. 2, Winter 2014, pp. 15-21.

Australia’s relative endowment of inputs required to produce goods and services, namely natural resources, labour, capital and technology, influence the industries and production methods which are high income earning with potential for growth. Industries and production methods with a relatively high dependence on natural resources and available high technology dominate exports and future growth. By comparison, labour intensive industries and production methods, and those where Australia lags world best practice technology, feature in the imports, and they have low growth prospects. There is a large non-traded sector, and here Australia’s relative endowment of the different inputs favours the growth of capital and technology intensive production methods, and with a focus on better satisfying evolving buyer demands. These comparative advantage principles apply equally to the structure and operation of the agricultural sector.

 

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