as i mentioned earlier though, the picture is not uniform across the industry and some parts of the farming sector have experienced very difficult conditions over the past year. but overall, the current picture is better than it has been for some years. graph 9 of course, agriculture remains an industry whose fortunes can change quickly from year to year. and it is one in which very significant structural change has occurred over many decades. given its importance to the overall australian economy, it is also an industry that the reserve bank has paid close attention to over the years, and it continues to do so. looking forward, no doubt the fortunes of the industry will continue to wax and wane. and like many other parts of the australian economy, the farming sector will need to continue the process of structural change. as i have talked about, this process is being driven, in part, by a fundamental realignment of global relative prices due to the re - emergence onto the global stage of the populous countries of asia. this realignment of relative prices is creating new opportunities for australian agriculture. i wish you success in finding those opportunities and in taking advantage of them over the years ahead. thank you. bis central bankers ’ speeches

philip lowe : world prices and the australian farm sector speech by mr philip lowe, assistant governor ( economic ) of the reserve bank of australia, at the australian farm institute agriculture roundtable conference 2011, melbourne, 10 november 2011. * * * i would like to thank troy gill, ewan rankin and trent wiltshire for assistance in the preparation of this talk. good morning. thank you for the opportunity to speak today about some of the challenges and opportunities facing the farming sector in australia. perhaps more than any other parts of the australian economy, farmers understand uncertainty. they live with uncertainty about rainfall and growing conditions. they live with uncertainty about the costs of their key inputs. and, of course, they live with uncertainty about the world prices for their outputs. it is this ability to deal with uncertainty that is one of the strong and enduring characteristics of the australian farming sector. this morning, i would like to begin by talking a little about some of the uncertainties facing the global economy. i would then like to discuss why it is that, despite these uncertainties, the medium - term global environment facing the australian farming sector is quite favourable. and then finally, i would like to briefly touch on current conditions in the farming sector in australia. global uncertainties it is clearly a difficult time for the world economy. financial markets remain captivated by the unfolding events in europe. the authorities there are dealing with a very difficult combination of excess government debt and weak banking systems. the problems are compounded by the weak growth prospects in the region and increasing fear of widespread contagion. this situation is, in part, a legacy of many years in which a number of governments spent much more than they raised in taxes, with bondholders being more than willing to finance the difference at low interest rates. it is being compounded by the fact that the policy options facing the members of a currency union are more restricted than those that would face a country with its own currency. in preparing the reserve bank ’ s latest forecasts of the world economy, we have assumed that the european authorities do enough to avert a real disaster but are not able to avoid periodic bouts of considerable market volatility and uncertainty. there are, of course, a range of other scenarios, many of which, unfortunately, are on the downside. this inevitably means that there is likely to be considerable uncertainty about the global economy for some time. but amongst the gloom emanating from europe, it is important not to lose sight of