In 2019, the world experienced an enormous challenge (the COVID-19 pandemic) that affected most of the vital sectors of human life. Agriculture was one of the most important sectors of human life that were highly affected. This impact was also prudent in Australia as farming activities came to a cessation, leading to the reduction of farmers jobs. This article will discuss five ways the pandemic has impacted Australian farm businesses.
The loss of export markets has been a major challenge for farmers in Australia. Restrictions on international travel, such as border closures and quarantines, have seen some countries ban exports of agricultural products, putting local supply levels at risk and reducing global food trade. This has created an unpredictable situation for many exporters and importers of food. The pandemic has resulted in the closure of many export markets, which has led to a decrease in demand for Australian agricultural products. This has caused farmers to lose out on important income streams, making it difficult for them to maintain their businesses.
Another issue that farmers are facing is the decrease in consumer spending. Due to the pandemic, consumers have been cutting back on their spending, which negatively impacted farm businesses. In particular, there has been a decline in demand for meat and dairy products, which are key components of the Australian agricultural sector. A significant fall in consumer spending as a result of mass unemployment and economic crisis has reduced purchasing power, creating a rift in supply chains across the globe. This COVID-19 impact analysis predicts that by 2025 the coronavirus pandemic will have led to an overall decrease in demand for animal feed products to the tune of US$5.5 billion or 3.2 percent compared to pre-coronavirus estimates.
The outbreak of COVID-19 has also led to increases in input costs. Farmers face higher costs for things such as fuel, fertilizer, and chemicals. This has made it difficult for them to remain profitable, and it has put a lot of pressure on their businesses. In the third of its type, the ABS report shows that while the pandemic significantly impacted costs, input prices also fell by 5.1 percent across 2020, resulting in an overall increase of 0.6 percent on 2019 figures. This growth was driven largely by increases in acquisition costs (due to COVID-19-related input costs) which grew 8.9 percent ($80 million) between June 2019 and June 2020.
The pandemic affected the health and well-being of farmers in Australia, particularly after a year of abnormal weather conditions, including an unusually warm summer and warmer than-normal winter months. The Australian farmers also felt like the government had forgotten them during the pandemic and mental health issues as a result of losing their loved ones. In recent months, thousands of Australian farmers have been forced to bury their loved ones as part of the country’s deadly second wave of COVID-19. The Victorian agriculture sector has struggled to deal with this sudden surge, with farmers speaking out about mental health issues and not being productive. This has affected the productivity of farmers and their farm business as they are unable to work.
In addition, the pandemic has caused labor shortages in the agricultural sector. There is a shortage of workers available to fill temporary jobs, resulting in farmers hiring foreign workers. This has been expensive and challenging for farmers, as they have had to go through the process of obtaining visas for these workers. An econometric model was developed to forecast Australian farm-level labor demand and supply over a five-year period to understand the magnitude and duration of this impact. The model predicts that 72 percent of all farms will be labor constrained in 2020–21 and 57 percent in 2021–22, with a slight reduction in numbers each consecutive year. A shortfall of some 33,000 full-time workers is predicted over the five years.
It is evident that the pandemic has affected the Australian agricultural sector negatively. However, there is enough room to create opportunities for farmers so that they could contribute more to the growth of the economy. Apart from this, there is a need to prioritize the farmers and their interests. The government should try its best to make farming prospects better.