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Australia’s agriculture and food industries are well placed to contribute to the economy’s future growth given the robust prospects of global food demand and the continuing high international competitiveness of these sectors. There are, however, important challenges that call for new ways to exploit agricultural resources and human capital. The decade-long decline in agricultural productivity growth needs to be overcome, coupled with the need to accommodate uncertainties about the impacts of climate change and to respond to societal demands in the areas of sustainable development and animal welfare. The agro-food sector also needs to absorb exchange-rate and cost pressures created by the mining boom. To tap additional opportunities of the higher value food segments, Australian agri-businesses need new knowledge and capabilities to seize demand signals and value opportunities, particularly from more affluent consumers in Asian markets.

This chapter outlines the role of a well-functioning agricultural innovation system in ensuring good use of public funds, and higher responsiveness to the needs of ‘innovation consumers’ through improved collaboration between public and private participants, including across national borders. A well-functioning agricultural innovation system is key to improving the economic, environmental and social performance of the food and agriculture sector. The long-term positive impact of agricultural R&D on productivity growth is well established, and technologies and practices can help improve the sustainability of natural resource use.

This chapter provides an overview of domestic and trade agricultural measures, outlining those supporting investment, the adoption of innovation or environmental practices, and the development of bio-products. It also reports trends on the level and composition of support and discusses the likely impacts of agricultural policy measures on structural change, environmental performance and innovation in the sector.

This chapter presents an overview of Australian regulations governing entrepreneurship, access to natural resources and products and processes and discusses the extent to which they affect the adoption of innovative practices and the introduction of new products in the country. It also discusses Australian policies related to trade, investment, finance and taxation and their impact on the capacity of farms and agri-food firms to invest and take advantage of market opportunities.

This chapter outlines the main challenges and opportunities for the food and agriculture sector of Australia, which will require innovation. It describes the overall economic, social and environmental context in which the sector operates, and the natural resource base upon which it relies. It provides an overview of the general geographical and economic characteristics of the country; and outlines the contribution of the agri-food system to the economy. It identifies the main structural characteristics of primary agricultural and upstream and downstream industries; describes the main food and agriculture outputs and markets; and reviews trends in agricultural productivity and sustainability.

This chapter outlines the role of infrastructure capacity, skills and education in facilitating innovation in agri-food. It describes the governance of policies to improve rural infrastructure, outlines main regional programmes and reviews briefly the quality and coverage of rural services. It then discusses efforts to respond to skills demand from the agri-food sector through labour, immigration and education policy. It also reports on trends in education expenditure and outlines the performance of education system. Finally, it provides an overview of education levels in agricultural, and enrolment in agricultural programmes, outlining the gap between skills supply and demand in the sector.

This chapter outlines the importance of economic stability and public institutions in fostering public and private investment. It provides an overview of the performance of the overall economy, outlines macroeconomic developments and challenges, explains the federal-provincial governance system, and presents an evaluation of public institutions.

This chapter presents the framework applied in the review to analyse the extent to which Canadian policies are supportive of innovation for productivity and sustainability and the findings of the review of a wide range of policies in Australia. In each policy area, it develops specific policy recommendations.

Innovation, Agricultural Productivity and Sustainability in Australia is part of the series OECD Food and Agricultural Reviews. It was undertaken at the request of the Australian authorities, represented by the Department of Agriculture.

Australia’s agriculture and food industries are well placed to contribute to the economy’s future growth given the robust prospects of global food demand and the continuing high international competitiveness of these sectors.