With Donald J Trump set to become the 45th President of the United States, we look at how the Trump Whitehouse may shape the future for Australian farm businesses.
1. The Trans-Pacific Partnership will be delayed, at best
Trump’s protectionist trade sentiment is concerning for Australian farmers and we will need to assess over the coming days and weeks where this leaves trade reform objectives.
Donald Trump's campaign centred on themes of opposing free trade and migration, and protecting American jobs. Trump was critical of existing trade deals - notably the North American Free Trade Agreement - and the (as-yet unratified) Trans-Pacific Partnership, from which Australian farmers would benefit.
Australia exports over 70% of its farm produce, so any trade damaging measures such as increases in tariffs, reductions in import quotas or increases in US domestic subsidies will hurt Australian farmers and other exporting nations.
As part of its #Vote4Ag election campaign, the American Farm Bureau asked candidates to summarise their position on trade (including ratification of the Trans-Pacific Partnership). Donald Trump responded as follows:
I strongly oppose TPP as drafted and will work hard to develop trade agreements that are in the national interest and benefit American workers including our farmers.
Donald J Trump
Both candidates expressed concern about the TPP as drafted during the campaign, however it is unclear to what extent the Trump Administration might require renegotiation of the agreed text before ratification, or how long this might take.
2. American farm subsidies are unlikely to be reformed
US farmers recieve significant levels of Federal Government support, placing Australian farmers at a disadvantage in the global market. Much of this support flows via the controversial Farm Bill.
Donald Trump has voiced strong support for the Farm Bill (with the notable exception of the food stamps programme), stating:
I support a strong safety net for our nation’s farmers
Donald J Trump
This will continue to be a source of concern and frustration among low subsidy nations such as Australia.
3. Leadership on climate change is unlikely to come from the U.S.
With the exception of supporting ethanol, Donald Trump has a history of questioning climate science and rejecting investment in renewable energy.
As Australia considers its emissions abatement options after our current Emissions Reduction Fund is exhausted, the answer is unlikely to come from the United States.
Australian farms have been a consistent source of emissions abatement under current schemes, but without a clear path forward for government policy, investment in this arena may be less certain.
4. Currencies and commodities may have welcome news for harvest
Over the course of today, as the Trump victory firmed as the likely outcome - global markets have tanked.
What is bad news for investors may hold a silver lining for Aussie farmers. Both oil prices and the Aussie Dollar have been slashed during trading.
While these impacts may be temporary, any prolonged reduction in these prices may mean cheaper fuel and a currency-led recovery in commodity prices as we come into harvest for winter crops.
5. We may have an ally on science-based biotechnology policy
Despite a Twitter gaff during the campaign (attributed to a junior staffer) alleging a link between GM crops and voter intelligence, Trump has come out strongly in favour of technology in agriculture.
When asked about his thoughts on biotechnology, Trump responded:
Through innovation, American farmers are producing crops more resilient to drought, heat, and pests. Government should not block positive technological advancements in agriculture.
Donald J Trump
This sentiment may make President Trump an unlikely ally for a global industry seeking an evidence-based policy response to advances in agricultural technology.
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