23 – What is the grains industry’s value proposition for local households?

22 November, 2018

Our recent blogs referred to Indonesian households and how urbanisation is affecting Indonesia’s demand for grain and what that might mean for Australian grain exports. But what about households in Australia; how do they benefit from Australia’s largely export-focused grains industry? What’s the grains industry’s value proposition for Australia’s urban households?

Australia is one of the world’s most urbanised countries. Almost 90% of our population is urban, and most live within 50km of the coast. So, it’s hardly surprising that most urban dwellers are not closely connected to or knowledgeable about grain farming. Even within grain farming itself, larger farms and greater use of labour-saving technologies mean there are fewer people directly engaged in grain farming.  Few people can now afford to enter grain farming, unless they are independently wealthy or inheritors a farm business.

Understandably people often focus first on where they live and work and want improvements in their neighbourhood, town or city. In addition, most voting power now resides in urban electorates, mostly in the major cities. Hence, when a grain-growing region or the grains industry seeks government co-investment or support, questions are raised with sub-texts like: ‘Why are we supporting rich landowners or wealthy farmers?’ or ‘Where are the votes and jobs in this?’

These sorts of questions deserve answers. How do urban households benefit from Australia’s grains industry?

Firstly, urban households benefit in the most obvious way. They are fed. They have ready access to affordable grain-based products. ‘Give us this day our daily bread’ is answered daily by Australia’s grains industry. In fact, Australia’s grains industry produces grain so cheaply and reliably that we are able to competitively export it, $14.5 billion worth in 2016/17 to be exact.

Secondly, because we have sufficient volumes for export it means households are not subject to marked volatility in the supply or prices of grain-based products. There is almost always sufficient production or stocks of grain to satisfy local grain demand. Hence, amid drought, grain that would otherwise be exported can be made available to feed animals thereby ensuring milk, meat and bread remain affordable and are not subject to price spikes that would occur if grain supplies were inadequate.

Thirdly, it’s worth pointing out that there is an economic distinction between local and export sales. Take off your grain hat for a moment and think of apples.

Suppose you are in the business of growing apples and you happen to mostly grow the Pink Lady variety. Being a newer and more popular variety your sales on the local market will most likely be at the expense of sales of older, less popular varieties like Granny Smith, or at expense of some other item in consumers’ food budgets. In short, in the local market, revenues from apple sales, and local food expenditures, will hardly change due to your production being sold locally.

However, if you sold your Pink Lady apples in overseas markets then export revenue would be brought into your business whilst revenues in the local market would continue to be relatively unchanged. The additional export revenues would create multiplier effects throughout the entire economy, rural and urban, and even urban households would indirectly benefit from those multiplier effects. The same applies to grain exports. These export revenues would flow into grain businesses and then via a range of multiplier impacts, eventually would generate benefits for urban households.

When you have millions of dollars of export earnings flowing into an economy, as is the case for Australia where its grains industry generated $14.5 billion of export revenues in 2016/17, then these revenues will boost the living standards of all households, not just farmers.

More News

05 May, 2021

The world of noodles

Australian wheat is highly valued for noodles across Asia. The Asian noodle market represents over one-third of Australia’s wheat exports! Why Australian wheat? Flour millers across Asia prefer to buy Australian wheat for noodles. The combination of excellent noodle texture and colour attributes is unique to Australian wheat. White Australian wheat results in high milling yield […]

28 April, 2021

AEGIC IS HIRING

This post is current as of April/May 2021.  AEGIC is Australia’s leading organisation for market insight, innovation and applied solutions for the grains industry. We leverage our technical know-how, market insight and innovation capabilities to find and deliver practical solutions that create value for the Australian grains industry. We are currently building our technical capacity […]

27 April, 2021

AEGIC behind the scenes: Australian wheat for Asian bread

Asian diets are changing amid strong economic growth and increasing wealth. More and more consumers are recognising the benefits and convenience of baked products. Australia is well-placed to play a positive role in this change by understanding industry requirements. AEGIC’s bread research lab helps assess Australian wheat for Asian baking to get more of it into […]

21 April, 2021

AEGIC behind the scenes: Australian wheat for Asian noodles

The Japanese udon noodle market is Australia’s most stable premium wheat market. Japanese noodle lovers know what they like when they’re tucking into a delicious bowl of udon or ramen noodles. AEGIC runs a highly-trained udon noodle sensory evaluation program with the Japanese Flour Millers Association (JFMA) to ensure new Australian wheat varieties meet Japan’s strict requirements. […]

15 April, 2021

Enhancing noodle texture and colour

Asian flour millers prefer to buy Australian wheat for noodles because of its bright, stable colour and good texture. Thanks to a landmark AEGIC research project*, we know that noodle colour, colour stability, and texture are among the most important factors that flour millers look for when buying wheat for noodles. The research found that […]

13 April, 2021

50 – The Rise of the Middle Class

02 March, 2021

Whole grain for better health

Increasing whole grain consumption represents a major opportunity and challenge for the food industry. Extensive evidence now shows the connection between whole grain consumption and reduced risk of several chronic diet-related diseases. Greater intake of whole grains in the diet leads to reduced incidence of cardiovascular diseases, gastrointestinal diseases, cancer, and diabetes. To address this […]

26 February, 2021

AGIC Asia 2021 to reach Asian feed and whole grain buyers

The Australian Grain Industry Conference 2021 will feature a special session led by AEGIC on the benefits of Australian grains for animal feed, and the health benefits of whole grains for human consumption. AGIC Asia, which will be held virtually this year on Wednesday 3 March 2021, is a key date on the grain industry […]

05 February, 2021

Stimulating Australian feed grain demand in the Philippines and Thailand

Feed grain buyers in the Philippines and Thailand learned the compelling benefits of using Australian feed grains for swine following two well-attended AEGIC webinars this week. The webinars, presented in conjunction with Austrade, featured experienced Australian feed nutrition expert Tony Edwards as keynote speaker. The Philippines event attracted 150 representatives of the grain and animal […]

Slider