by Greg McFarlane of Vegan Australia
This article is based on the Vegan Australia “Moving to a vegan agricultural system” series which examines how a move to a vegan agricultural system would impact sectors such as the economy, employment, land use, the environment and food security.
In Part 1 of “Moving to a Vegan Australia” we highlighted the principles that would support a just transition to an animal free agricultural system and the huge benefits this would have on food security, biodiversity and land use in Australia. This transition would allow nearly 40% of the land area of Australia to recover from the impact of animal agriculture allowing reafforestation and major increases in freshwater availability, biodiversity, and carbon sequestration and decreases in soil erosion and pollution. In this article we see that animal agriculture accounts for just over 1% of Australian GDP and just under 2% of employment and we discuss how any potential impacts could be offset by increases in employment in plant based foods, afforestation and ecosystem restoration. As this report is a work in progress by Vegan Australia, some of the sections will simply highlight questions that will be addressed by further research.
This article outlines potential impacts, positive and negative, on the Australian economy. It will attempt to answer the following questions.
- How much do current animal industries contribute to the economy, including exports?
- What would be the contribution to the economy of alternative industries?
- How many people are currently employed in animal industries?
- How are these jobs distributed amongst industries, such as farming, sale yards, slaughterhouses and processing, distribution, retail, etc?
- What is the geographical distribution of employment in animal industries?
- What would be the geographical distribution of employment in alternative industries?
- What population movements would a move to alternative industries entail?
- What would be the impact on housing and regional towns by a move to alternative industries?
- As the demand for meat, dairy and eggs reduces, what new jobs would be created in the expanding plant farming sector and in the new vegan food industries?
- What programs can be put in place to help animal farmers transition to plant-based farming?
While this report concentrates on the National impacts of a vegan agricultural system, in this section we will also assume that animal products are no longer imported into Australia. This is relevant in an economic analysis as Australia is a net importer of some animal products, such as fish and pig meat.
The current economic scale of the animal agriculture industry
This section looks at the current production value, employment figures and exports values for the animal agriculture industry.
The economic value of the animal agriculture industry can be measured in a number of ways. Using the Australian Bureau of Statistics (ABS) tables for “agricultural commodities produced”, we find that in 2013-14, the value for all agriculture was $50.8 billion. Plant products (grains, fruit, nuts and vegetables) were valued at $28.1 billion (55%), while animal products were valued at $22.7 billion (45%). The World Bank gives a figure of 2.4% for the value added percentage of Gross Domestic Product (GDP) for all agriculture. This is similar to that given above. This compares to 12.0% for the mining sector, 10.4% for construction, 9.4% for manufacturing, 6.4% for health care and 2.2% for education and training.
The below chart shows the relative contribution to the Australian GDP for each industry. Agriculture is the narrow red section at the top. Animal agriculture makes up less than half of this. This illustrates that animal agriculture is not nearly as significant to the Australian economy as many people imagine. In fact, the only industry smaller than animal agriculture is arts and recreation!
In summary, the animal agriculture industry contributes about 1.2% to the Australian economy. The below graph shows the industry by animal product (from data in “Australian Pig Annual 2012-2013”).
Australia exports around 60 percent of its agricultural production. In 2014-15, total Australian exports were $319 billion. Agricultural exports were $42.5 billion, with about half of that from animal products. Animal products contribute about 7% to total exports. The main animal exports were cow meat ($9 billion), meat from other species ($3.8 billion), wool ($3.1 billion), live cows and sheep ($1.7 billion) and dairy ($2.4 billion).
The following graph shows animal agriculture exports in relation to other sectors. Mining consists of iron ore, other metals, oil, gas, gold, etc. Services include tourism and business and technical services. One such service is education-related travel, earning about $18 billion, slightly less than all forms of animal agriculture.
The graph below from the Reserve Bank of Australia shows the rapid decline in the significance of agriculture as an export industry. It has gone from nearly 50% of exports to about 15% in the last 40 years.
Employment figures are usually reported in the agriculture sector as a whole and includes plant and animal farming, forestry, fishing and support services. There is a lot of variability in the numbers reported, depending on the source. Some of these figures, all from government or industry sources, are 307,000, 313,000, 478,000 and 513,000. These range from 2.7% to 4.8% of total employment (11,482,000 in 2013-14).
Detailed breakdowns by sub-industry are given in the comprehensive Agricultural Commodity Statistics 2014 report and these can be used to estimate the employment numbers for the animal agriculture industry. The number of people employed in agriculture, forestry and fisheries are given as:
- 76,100 plant-only (fruit, vegetables, crops, forestry)
- 47,200 animal-only (dairy, poultry, livestock, fishing)
- 189,700 mixed (wheat/sheep, support services, other)
Most of the mixed category is in the wheat/sheep industry, which produces similar amounts of grains and animal products. If we evenly allocate the mixed category to plants and animals, we find about 142,000 people employed in the animal agriculture industry. This is 1.2% of total employment. This compares to 9.3% employed in construction, 8.9% in health care, 7.7% in manufacturing and 3.3% in education and training.
Employment figures are also given for the Australian processed food industry, which includes processing of meat, dairy, fruit, vegetables, flour, bakery products, sugar, wine and spirits. Total employment is 240,000, with meat processing employing about 80,000. The below graph from the Reserve Bank of Australia shows the decline in agriculture’s share of total employment over the last century.
The chart below shows another view of the share of employment for each industry. Agriculture is the narrow red section at the top. Animal agriculture makes up less than half of this, or about 1.4%.
In summary, we have determined that the animal agriculture industry is about 1.2% of GDP, exports are about 7% of total exports, it employs 1-2% of the Australian workforce. As can be seen from these three measures, animal agriculture is a relatively small part of the modern Australian economy.
Impacts on the economy of moving to a vegan agricultural system
In this section we will look at the changes that a vegan agricultural system would bring about and how any negative impacts could be mitigated.
Economically there would be a potential reduction in GDP by about 1% but this would be offset by the growth in the vegan food market. The animal agriculture system also produces significant external costs that it does not pay for. Currently these costs are mostly paid for directly and indirectly by Australian society. These costs include soil erosion, drought, climate change, pollution from excess nutrients and pesticides, illness caused by unhealthy products, etc.
Exports may be reduced by 7% though this may be replaced with plant based alternatives. Meat imports would also be reduced and those foods could be replaced by locally produced plant based alternatives. The agri-food sector is unlikely to be affected too much as they can shift to using non-animal food sources. For example, in the food processing industry some of the meat processing jobs could transfer to plant-based equivalents, like plant-based milk, ice cream and cheese as well as soy based meat alternatives. There will be significant increases in employment in these new industries producing processed vegan foods.
The current agricultural subsidies paid in Australia are the second lowest in the world, according to the OECD, being 3.2% of farm income (2008-2010) and just 0.12% of GDP. Many governments around the world are looking to link agricultural subsidies to ecosystem benefits. The largest portion of this would be payments for practices that sequester carbon. The current payments in Australia are too low and paying farmers and land owners for ecosystem restoration may be necessary to facilitate the transition to a vegan future.
Inevitably there will be some disruption to employment which needs to be managed properly to avoid creating hardships for farmers. While there will be a reduction in employment in animal agriculture there will be an increase in employment in expanded plant food production. Currently tillage farming (growing crops) is heavily reliant on fossil fuels. But as we transition to renewable energy, farms will again become smaller, more productive and more labour intensive. But given that we can produce plant protein much more efficiently, for a given land area, then it may be possible for people to work less hours under a vegan agricultural system while still having a reliable, adequate income. Further significant benefits would be obtained by implementing the Land Use Changes outlined Part 1 of the article. This outlined how, “350 Million ha of Australia’s land mass, would be available for other uses beneficial to people and wildlife. Possible uses include the following.
- land currently used for both cropping and grazing should be used solely for cropping (35 Mha)
- extra forestry for timber logging (1-5 Mha)
- carbon farming (sequestering carbon dioxide) by regrowing vegetation, enriching the soil (100 Mha) would enable the land use sector to become a sink for emissions from other sectors, such as power generation and transport.
- biochar production from tree crops (1-5 Mha)
- restoration of rangelands (200 Mha), sequestering carbon dioxide in soil and vegetation, providing native habitat for endangered species, increasing biodiversity, reducing erosion and soil loss, reducing salinisation, and improving water quality
- new irrigation schemes in Northern Australia (1.5Mha)
These land changes will need oversight and planning and will be able to generate significant new employment for rural Australians in a range of sectors from afforestation to recreation and ecotourism. These changes will also reduce the external costs paid by society for an inefficient and polluting industry.
In Part 3 of this article we will focus on how this transition would impact the environment and what human health benefits would result from a transition to a vegan agricultural system. We will also look at how to promote and plan for this vitally important transition.