Demand And Supply Of Agriculture Products

1268 Words6 Pages
Thesis Statement: Demand and supply of agriculture products in Australia and the effect on the price due to supply bottleneck.

The paper discusses the changing scenario of demand and supply in the agriculture sector of Australia due to the exit of companies from the sector. The article taken for discussion highlights the problem faced by the agriculture sector as the investment by the companies are drastically falling in the agricultural sector Australia is a developed economy which follows a mixed market concept. The average GDP growth rate of Australia in 2016 is 3% and in 2015, its rate of inflation was 1.7% and rate of unemployment rate was 6%. The contribution to GDP by the agricultural sector is minimum and maximum by service
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The article “Why farmers will be next millionaires” by Andrew Heathcote, published in Australian Financial Review in 2015 discusses the potentiality of agriculture sector in Australia. It highlights that the agricultural sector of the country gets more attention and investment from foreign companies rather than the local companies (Afr.com. 2016). Due to this the huge demand of agricultural product in the country cannot be met and the prices of the products are rising. (Afr.com 2016). The article talks about the falling investment by the local Australian firm in agricultural sector due to the fear of losses as for the twenty years, the sector was not doing well. However, the potentiality of the sector was recognised by the foreign investors and they have given good ranks to the agricultural sector. The sector growth has been limited due to the small amount of investment by the local firms (Lawrence et al. 2013). The article has suggested that the investment by the local firms in the sector will lead to long-term future growth and the contribution of the sector to GDP will also increase. Some of the agricultural product like cotton has huge demand in international market and the local firm investment in the sector will help to capture the market demand and make them earn profit (Afr.com 2016). The foreign companies which have invested in the agricultural products have seen an increase in the market stake and have earned substantial
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