Buy Australian

There is quite a bit of “buy-Australian” marketing here. Jared Diamond’s Collapse, and its discussion of the various cultural, environmental, and economic challenges facing Australia has provided some explanation for this. I found the following statistics from Diamond quite fascinating:

60% of Australia’s land and 80% of its water consumption are dedicated to agriculture.

99% of Australia’s agricultural land makes no net contribution to Australia’s economy.

80% of Australia’s agricultural profits are derived from less than 0.8% of its agricultural land.

In short, the vast majority of Australia’s agriculture consists of marginal or failing enterprises. The poor productivity of Australia’s farmland combined with the high costs of irrigation, fertilization, and pest control make the costs of producing just about anything from the land greater than the revenue that can be earned from the land. Even a number of Australia’s native species are now being grown more productively on plantation forests in other countries. It’s cheaper to import agricultural products by boat across thousands of miles of ocean than to grow them locally. Hence, the only way to make Australian products competitive is to appeal to Australians’ nationalism and ask them to pay more for domestic products.

The other irrational behavior that Diamond mentions is Australia’s tendency to export its natural resources at low cost where they are converted to high value goods that are exported back to Australia. Australia continues to rapidly deforest its landscape (75% of Australia’s original forest and 90% of its native vegetation has been logged or cleared since European colonization, and much of this was subsidized by the government). A sizeable fraction of Australia’s timber is converted to wood chips that are exported to Japan at $7 a ton. In Japan, those wood chips are converted to paper that Australia buys at $1,000 a ton. Meanwhile, most of Australia’s timber for manufacturing and construction has to be imported. Similarly, Australia’s minerals and metals are exported elsewhere to be converted into appliances, cars, etc., which Australians subsequently buy. According to Diamond, the only other countries engaged in such upside-down and exploitive foreign trade are all in the developing world.