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Climate Fluctuations cut Australian Profit Margins

Climate Fluctuations cut Australian Profit Margins

2021-07-29

According to certain agricultural reports, experts believe that profit margins have the potential to drop by approximately fifty per cent. This is mainly due to global emissions that are hampering every sector that has been profitable. If this is not lessened then farmers have no choice but to lose out on their profit margins. At the present moment, the climate crisis has destroyed farmer’s profits by over 23 per cent. This amounts to close to 29,000 dollars per farm. Scenarios under which climate emissions were cut more significantly were projected to lead to smaller reductions in farming profitability.

Hence, the bureau’s executive director, Dr Jared Greenville, said the report – based on projections by the Bureau of Meteorology and CSIRO – showed seasonal conditions over the past two decades had been pretty difficult for Australian farmers. Lower average rainfall and higher average temperatures have had a negative impact on farm productivity and profit. The good news is that farmers have made some remarkable progress in adapting to these hotter and drier conditions.

The bureau report suggested Western Australian cropping farmers could face more pressure than those in eastern states under most scenarios as they were expected to face more substantial declines in winter rainfall. It said the impact on inland livestock farmers was expected to be most severe in central Queensland and parts of western New South Wales.

It said the average farm size was likely to increase as smaller farmers would face greater pressure from climate change. Greenville said investing in research, development and climate data would be crucial in preparing for what lay ahead. The report lands amid debate within the Morrison government over how agriculture is treated under a potential 2050 net-zero emissions target. Some Nationals opposed to the target have suggested they could be swayed if farming was heavily subsidised.

While Australia continues to resist, more than 120 countries and most major business and industry lobby groups including the National Farmers Federation say they support the 2050 goal. The G7 group of major developed countries have pledged to reach net-zero by 2050 at the latest and turned their attention to plans to make much deeper cuts by 2030.