How Profitable is Farm Business in Australia? Farm Performance Data and Some Implications from ABARE Broadacre and Dairy Industries Farm Surveys

Time series data on farm profitability for Australia and South Australia fromABARE’s farm surveys, shows a minority of businesses consistently profitableand a majority not. The paper finds evidence of prevalent and persistentnegative farm profit in both available long-run data (1990-2007) and morerecent data (2006-09). Trends in several structural change elements,productivity, farm size and age of operators, are also examined to aid theinterpretation of farm economic performance in agri-food.The paper concludes with several contemporary examples of public policydistorting the structure and performance of the farm sector and spoiling theusefulness of profitability as an indicator of sectoral performance. Policies onhobby farming tax benefits, drought, and agribusiness managed investmentschemes policy are discussed in this context