Future productivity gains in the agricultural sector must be driven by effective research and development and not through subsidies or price support schemes, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
Most productivity wins that can be gained from removing market distortions have already been achieved, Minister for Agriculture, Barnaby Joyce, said when releasing Agricultural productivity growth: past reforms and future opportunities.
The Minister said the report looked at the outcomes of government policies that were designed to support prices and stabilise farmer returns.
But the policies "served to dampen productivity growth", he said.
"Instead the productivity gains of the future will need to be driven by effective and efficient R&D investment and reducing the regulatory burden," Mr Joyce said.
"Our additional investment of $100 million in rural R&D and extension from 2014-15 is designed to enhance profitability through productivity gains.''
There is still a case for government support for farm businesses and farm families when times are tough - as they currently are for many managing this drought.
The report is Australia's contribution to the Organisation for Economic Cooperation and Development Framework for Analysing Policies to Improve Agricultural Productivity and Sustainability.
It will underpin a G20-OECD sponsored discussion following the ABARES Outlook conference on March 6 in Canberra.
The report is available at this PS News link.
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