Productivity is up on farms despite deteriorating climate conditions.

The Bureau of Agricultural and Resource Economics and Sciences has found farmers have been able to manage the downsides of climate change better than they have in the past.

“We see that farmers are better at protecting against poor years than they have been in the past,” the bureau’s Peter Gooday said.

The climate-exposed grain industry performed the best, with climate-adjusted productivity increasing 2.2 per cent per year on average between 2000 and 2022.

That’s compared to a growth rate of 1.4 per cent when it wasn’t adjusted for climate and weather effects.

The latest figures show overall climate-adjusted productivity in Australian agriculture grew by 0.6 per cent per year on average between 2000 and 2022.

Mr Gooday said while the growth in productivity may seem small it was significant given the longer-term trend in poor climate conditions.

ABARES analysis of farm performance by size released on Tuesday showed a shift towards fewer but larger farm businesses.

Larger farms tended to be more profitable, invest more and generate a higher rate of return on capital than smaller farms.

Research into farm performance by size showed the largest 10 per cent of broadacre farms produced about half of all the output.

The smallest 50 per cent of farms produced about 10 per cent of total output.

“An important consequence of this structural trend is that industry-level farm performance is increasingly driven by the performance of the largest farms,” ABARES executive director Jared Greenville said.

Liv Casben
(Australian Associated Press)