Climate, soil type, topography and the availability of irrigation water, are the main factors which influence the type of land use undertaken by Australian farmers. These factors, together with access to markets and technological advances, all contribute to the continuing evolution of Australian agriculture. Australian agriculture is fundamentally based on extensive pastoral and cropping activities, however diversification into intensive livestock and horticultural industries is increasing. Improved farming practices and technology continue to increase farm productivity in response to external market signals.
While Australian agriculture no longer contributes a large share to gross domestic product - averaging around 3% in recent years - it utilises a large proportion of natural resources, accounting for 70% of stored water use and almost 60% of Australia's land area. In addition, the dependence of agriculture on Australia's unpredictable climate means it often significantly affects regional economies and the national economy on a scale far greater than most other industries of similar size. The widespread drought experienced in 2002-03 severely affected the production of crops and stock numbers.
Until the late-1950s, agricultural products accounted for more than 80% of the value of Australia's exports. Since then, despite increasing agricultural output, the proportion has declined markedly as the Australian economy has become more diverse. The quantity and value of production have expanded in the mining, manufacturing and, in recent years, the service industries. For the five years prior to June 2002, exports from the agriculture industry averaged 9% of the total trade. However, the 2002-03 drought severely reduced agricultural production and the amount of agricultural product available for international trade, resulting in Australian agricultural exports dropping to 7.4% of total exports in 2002-03. Improved climate conditions during 2003-04 saw agriculture exports rise slightly to 7.7% of total trade in 2003-04. Australian agriculture occupies a significant place in global rural trade, with wool, beef, wheat, cotton, dairy products and sugar being particularly important. Australia is also an important source of fruit, rice and flowers.
The major source of statistics on land use, commodity production and livestock numbers in this chapter is the annual Agricultural Survey, a large sample survey conducted by the Australian Bureau of Statistics (ABS). Every five years the survey is replaced by the Agricultural Census, with the last census having been conducted in 2001, coinciding with the 2001 Census of Population and Housing.
The chapter concludes with an article The Australian wheat industry.