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Analysis of government support for Australian agricultural producers
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This report analyses how Australia compares in terms of the level of support provided to agricultural producers relative to OECD countries and major emerging economies. The report looks at what percentage of farm revenues comes from government programs. This report concludes that Australian farmers are some of the least subsidised in the world – second only to New Zealand in terms of countries where comparable information is available. As measured by the OECD, just over 2% of Australian farmer revenues in 2016-18 were derived from government support. Globally, Norway (61%), Iceland (59%) and Switzerland (55%) in Europe, and Korea (52%) and Japan (46%) in Asia, provide the highest levels of agricultural subsidies. Australia has reformed its approach to agricultural support over time, in line with national competition policy and other pro-competitive reforms and consistent with WTO obligations. Government support is now dominated by investments in sector capacity, such as research and development (R&D). Where direct farm support is provided, it is concentrated on risk management tools to help manage Australia’s uniquely variable climate. These tools include Farm Management Deposits and income tax smoothing. Keeping subsidies low is important for both Australian producers and international markets. Australia’s reform experience shows that deregulating the agriculture sector and removing distorting forms of support spurs overall sector growth, increasing participation in global markets and the contribution that agriculture makes to the rural and national economy. Current global levels of production and trade distorting support mean that global agricultural production and trade is lower than it could be and households are worse off. For Australia alone, global subsidies and trade barriers could be costing Australian agriculture between $8 billion to $10 billion in exports annually. All governments have an interest in keeping agricultural markets free from distortions so that the sector can continue to play a key role in improving global food security and contributing to rural development. Governments do need to make investments in agriculture to help meet global development goals, but it is important that these investments not harm producers elsewhere. Future trade rules will be needed to help achieve this outcome.
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ABARES : Australian Bureau of Agricultural and Resource Economics and Sciences : Department of Agriculture, Water and the Environment
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All material in this publication is licensed under a Creative Commons Attribution 4.0 International Licence, save for content supplied by third parties, logos and the Commonwealth Coat of Arms.

Other constraints: This publication (and any material sourced from it) should be attributed as: Greenville J, Analysis of government support for Australian agricultural producers, ABARES research report, Canberra, May. CC BY 4.0.
ISSN: 1447-8358

ISBN: 978-1-74323-483-9

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