A new report by AgriFutures, International Agricultural Subsidies and their Impact on Australian Agriculture found that based on the most recent data, global farm support policies reduce Australia’s net farm incomes by 15% each year.
The report was produced by globally renowned agricultural economists Kym Anderson and Ernesto Valenzuela who examined the wide range of trade barriers and support payments to farmers in foreign countries.
They calculated the impact of these barriers and payments on Australia’s economic welfare generally as well as the bottom-line of Australian farmers.
The report found that agricultural support policies equally impact on Australia’s overall economic welfare with over a third of the economic welfare cost to Australia due to government payments to farmers in other countries.
National Farmers’ Federation (NFF) President said the findings of the report were ‘staggering’ and that, in the context of the current COVID-19 pandemic, highlighted that overseas farm support policies were critical today more than ever.
These figures show that the agricultural policy decisions of other countries have a serious and significant impact on the welfare of Australia and our farmers.NFF President Fiona Simson.
“Increasing global agricultural productivity and securing food supply chains is fundamental to everyone’s food security.
“This has rarely been as evident as it is today as we all tackle COVID-19.”
Last week, leaders of the World Trade Organisation, the UN Food and Agriculture Organisation and the World Health Organisation highlighted the critical importance of international trade for the food security and livelihoods of millions of people.
In Australia, agriculture has been recognised by the Federal and state and territory governments, as an essential service.
“Interruptions and distortions in food supply chains, whether that’s via trade barriers and subsidies, or COVID-19 measures, can impact on productivity and ultimately global food security,” Ms Simson said.
The report highlighted the European Union, China, Japan and Korea as the main culprits in maintaining unfair trade barriers and subsides that that red meat, wheat and dairy were the sectors most affected.
The report recommended that in order to improve global economic welfare and Australia’s net farm incomes, the Australian Government should continue to try and negotiate through the WTO to have farm support payments and import barriers reduced.
“The NFF applauds Minister Birmingham’s recent efforts to build support for a new approach to Domestic Support Reform in the WTO,” Ms Simson said.
“We know the WTO is facing its own challenges – but it remains the only forum where these kinds of trade barriers and distortions can be addressed.
“For this reason, we entreat the Government to continue the hard work of forging a new consensus to reduce subsides and agricultural trade barriers.”