The dairy and meat processing sectors are significant contributors to the Australian economy. It generates employment and export earnings. For example, processed dairy and meat products accounted for 35 per cent of total food exports in 2000. Hence, the growth of the dairy and meat processing sectors is an important issue for Australia. The dairy and meat processing sectors grew annually by 1.47 and 0.37 per cent respectively from 1980 to 1998. A third of the growth in the dairy processing sector arose from productivity gains. Research expenditures, programs such as work place reforms and changes in the exchange rate significantly influenced the productivity changes in the dairy and meat processing sectors.