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Wildfires: Impact on the Australian and Californian agricultural industries
11 November 2020
Australian bushfires burned 18.6 million hectares
between September 2019 and March 2020.
Australian recovery fund: USD1.45
billion.
The 2021 Australian honey production may halve
year-on-year.
The 2020 Californian summer fires hit around 1.7
million hectares.
The 2018 Californian recovery investment: USD2.3
bln.
Uncontrolled fires are frequently taking place in warm and dry
areas such as Australia, California and Mediterranean countries in
summer. These countries have developed special programmes to reduce
their impact on the farming industries and environment. However,
wildfires have become a real danger for their economics, also
hitting their agricultural industries. Australia and California,
both key agricultural suppliers in both hemispheres, have suffered
the worst of all worlds between 2019 and 2020: rising costs due to
Covid-19 restrictions and fires and smoke hitting farms.
Australia
Australian wildfires took place between September 2019 and March
2020, before the start of the southern hemisphere summer. The
2019-20 bushfire season hit 18.6 million hectares, a record,
agricultural soil taking for 13-14% of the total area. Rainfall cut
the bushfire risk from March onwards and winter crops (wheat,
barley, canola and chickpeas, mainly) developed as usual.
IHS Markit expects the
Australian economy to contract by 4.9% in 2020 due to the
combination of severe drought, bushfires and Covid-19 outbreaks.
The 2020-21 agricultural volumes are expected to rebound. However,
weak consumption and prices may offset this rise, the net revenue
being stagnant at AUD61 billion (USD44.4 bln), due to the economic
crisis caused by the Covid-19 outbreak. The federal government
forecasts that the farming industry will resume rising sales in the
2024-25 season.
The Australian Insurance Council estimated that bushfire losses
were around AUD1.9 bln in insured claims. The industry has been
suffering the worst of all words because bushfires confluence with
Covid-19 restrictions from March onwards. The farm production value
is expected to fall by 4.8% year-on-year to AUD58 bln, according to
the federal government.
Smoke expanded to neighbouring New Zealand, hitting its
environment and affecting its manuka honey industry.
As a result, the federal government announced the formation of a
National Bushfire Recovery Agency to coordinate the reconstruction
works. The programme's resources initially totalled more than
AUD2.0 bln, having spent AUD1.6 bln until October 2020.
Agricultural growing and processing recovery projects may receive
around AUD270.1 mln, assessed by local authorities on behalf of the
federal government.
The most affected agricultural industries were:
Grapes. The Australian Wine Association (Australian Wine)
estimates that around 3,620 acres were devastated by fire (1% of
the total planted area). However, smoke hit around 5% of the total
acreage, especially the areas of Kangaroo Island and Adelaide Hills
(South Australia) and Tumbarumba (New South Wales). Affected
winemakers decided not to process grapes as low-quality grapes and
wine may degrade the brand reputation.
Beekeepers. 12,500 hives were burnt, only around 0.5% of the
total, according to the Australian Honey Bee Industry Council
(AHBIC). However, bushfires damaged most of the industry because
the Australian honey crop is dependent on eucalyptus forests, these
trees being essential to secure healthy feed for bees. AHBIC
estimates that eucalyptus forest recovery may take between 30 and
40 years. There were 16,000 apiary sites in Australian forests,
which accounted for 65-80% of the honey crop. The Australian honey
and wax crop and pollination service gross value estimated at
around AUD147 mln (USD103.3 mln) and AUD14.2 bln, respectively,
before 2019-20 bushfires. Domestic beekeeping associations estimate
that honey outputs fell by 30%-50% from 2020-25 compared with the
2018 level. Most beekeepers combine revenues from honey and
pollination services, especially for deciduous fruit and almonds.
Australian beekeepers had to face low yields due to severe drought
in previous years and bushfires have triggered a long-term recovery
plan (six years) sponsored by the federal government, which must
combine short-term beekeeper necessities and environment
recovery.
Sheep and cattle. Initial assessment estimates that around
100,000 sheep and 25,000 cattle were destroyed, a small rate for
the huge Aussie population, estimated at around 63.7 mln for sheep
and 28 mln for cattle on 200 mln hectares. However, destroyed
pasture may have impacted on 16% of cattle and 1% of sheep
livestock, according to the Australian meat and livestock
association (MLA).
California
The 2020 Californian wildfire season burned 1.7 mln hectares
until 24 October 2020, a record. As a result, some experts are
calling this fire season a 'gigafire'; a new word to enlarge a
classification was above the existing 'megafire'. The 2018 fire
season brought a total expense of USD2.3 bln and the 2020 season is
expected to exceed this record.
Smoke has been covering most space between Central Valley and
the coast, cutting sunlight and lifting average temperatures. Fires
have also destroyed irrigation infrastructure and have increased
harvesting costs as farmers had to use special masks due to smoke
after assuming PPEs as a result of Covid-19 restrictions. In
addition, some products require clear skies and warm temperatures
to complete their production cycles successfully.
The University of California listed the following negative
impacts of smoke on crops:
With less sunlight reaching crops, crops develop more
slowly.
Less sunlight can lead to higher disease loads. When ash coats
leaves and fruit, crops have even less access to light.
Protecting workers delays harvest, leading to destroying overly
ripe crops.
Some crops absorb enough smoke to change the flavour.
As a result, products whose harvesting takes place between July
and October may be the most affected.
Almonds. The 2020 output is expected to reach a record volume
of 3.0 bln meat pounds, unaffected by wildfire effects. However,
the Californian grower Blue Diamond has reported that the lack of
radiant heating from the sun have hampered the drying of the crop
after shaking. Many growers have had to leave crop on the ground
for as much as two weeks, hoping to get hull moisture down to
levels safe for stockpiling or to allow for adequate hulling and
shelling. This has complicated pest management for many. Leaving
almonds on the ground for an extended period increases the
potential for ant damage. Additionally, delaying the harvest of the
polliniser varieties increases the potential for damage by the next
generation of Navel Orange worm (NOW), which began laying eggs on
splitting hulls in mid-September.
Grapes. Smoke already impacted on quality of the harvested
grapes in 2018. This fire season may hit also fresh grape flavour
and the drying process for raisins. The Californian Farm Bureau
Federation (CFBF) reported that raisin drying has been delayed for
two weeks due to a lack of sunlight. This delay is increasing
insect attacks on raisins left in the countryside for over 30 days.
Many farmers are planning to use drying machines to accelerate the
process, although it will lift production costs.
Tomatoes. The 2020 California crop is expected to reach around
10.2 mln tonnes, slightly up from 10.1 mln tonnes the last year, as
IHS Markit reported on 2 7 October. Smoke slowed harvesting tasks but
did not affect the crop.
Strawberries. Rising product cost, lifting prices as IHS Markit
reported on 21 October.
Figs, pears, walnuts and pistachios. Harvesting has being
delayed, although crop quality and volume have not been
damaged.
Federal government led by the president Donald Trump considered
that wildfires were the result, mainly, of uncleaned forests and
human intervention. As a result, its administration planned to
develop an ambitious programme to prevent forest fires. Meanwhile,
the Democratic Party proposed a more holistic approach, considering
the rising impact of fires a consequence of climate change combined
with human action. As a result, IHS Markit will follow initiatives
and recovery projects launched by the Californian and federal
governments in 2021, both supported by the Democratic Party.
Conclusion
Summer wildfires are common in warm and dry regions, such as
California, Australia, Spain and Portugal, hitting their farm
industries. Latest bushfires have been especially damaging in
California and Australia, the global agricultural industry keeping
an eye on their consequences. The recovery projects developed by
governments will be essential to understand how new plantation
projects are developing in both areas. Their federal government
policies will drive how farmers and rural population are reacting
in the mid and long-term, as they did to shape their current key
industries.
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