Hydroponics and organic farming are expected to be the most profitable agricultural sectors tipped to grow by up to 49.6 per cent in the next five years, according to industry research expert IBISWorld.
Recently secured free trade agreements with Japan and Korea are also predicted to deliver significant growth to the agriculture industry.
The company predicts the industry will grow by 5.7 per cent from 2014-2019 to reach total revenue of $71.1 billion.
IBISWorld Australia General Manager Dan Ruthven says the growth in hydroponics, organic farming and recent free trade agreements will see more Australian produce being exported.
“Australia is very well placed to take advantage of our highly productive soils, efficient farming practices and geographic position on the doorstep of Asia,” he says.
IBISWorld expects hydroponic farming to soar in the face of ongoing domestic water shortages and drought, given the potential for significant water savings and greater efficiencies in growing fruit and vegetables.
The sector is expected to generate more than $1.1 billion for the Australian economy by 2019, a whopping increase of 23.1 per cent from 2014.
“The complete control of environmental variables, which largely negates the impact of floods, droughts, adverse weather conditions and natural disasters, will not only reduce labour costs, but also offer greater security in the supply of vegetables, flowers and fruit,” Ruthven says.
IBISWorld adds the trade of hydroponic produce in the industry is currently low due to their perishable nature but advances in refrigeration and enhanced transportation are likely to increase exports of hydroponically grown food.
As reported earlier this year, organic farming has been listed as the third Australian industry most likely to soar in 2014, and is forecast to record outstanding growth of 11.2 per cent this year, and an estimated 49.6 per cent over the next five years.
IBISWorld says this is due to increasing health consciousness among Australians, growing concern for the environment, steady income growth and increased convenience of organic food.
Free trade agreements reached with Japan and South Korea in April this year has opened the doors for more Australian agricultural products to be exported to the Asian countries including beef and dairy products.
“Beef is expected to be one of the biggest beneficiaries of the recent free trade agreements reached with Japan and Korea, as quotas and tariffs are either significantly reduced or eliminated altogether,” Ruthven says.
Currently, $64.1 million of Australian beef and veal and $77 million of dairy products are exported to Korea while Australian beef is Japan’s largest imported agricultural product, valued at $1.4 billion in 2013.
According to IBISWorld, other agricultural sectors tipped for revenue growth over the next five years include beef cattle farming, sheep farming and grain growing.