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Australia’s farm sector may have just fallen for the second time in two months, but the government has not been entirely blamed for the fall.
Farmers and other agricultural producers are facing a sharp decline in the price of their products and the government is also having to deal with the fallout from the severe drought.
The Australian Farmgate, which is a market for food and feed futures, has dropped 5.3% in the past week, according to the Australian Securities Exchange (ASX).
The drop is largely due to the drop in prices for cereal grains, which has led to a sharp drop in demand for food.
“It is probably a reflection of the lack of supply,” Agriculture Minister Barnaby Joyce told reporters in Melbourne on Wednesday.
“There’s a lot of supply out there, and it’s only going to get worse because of the drought.”
Joyce said the government will try to ramp up supply through an increase in the minimum price for cereal grain, which currently stands at about $6.50 a kilogram.
The government has also announced a package of measures to increase the number of farmers and processors allowed to produce crops.
Joyce did not say how many farmers were affected by the decline, or how much it would cost to implement the measures.
Australia’s farmgate is down by around 2.3%.
But the government insists it has made good on its promise to make the market more competitive.
“If you want to be competitive you’ve got to have more and more supply and more and the longer you don’t, the harder it gets to get there,” Joyce said.
“It’s been the case over the past two years that the market has been in decline.”