Our farmers are not subsidised says ABARES

ABARES subsidy study confirms Aussie farmers get little govt help

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Australia confirmed as having one of the lowest levels of agricultural support in the OECD

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Australian Bureau of Agricultural and Resource Economics and Sciences analysis of government support for farmers shows Australians rate among the least subsidised in the world.

That finding includes our barley growers, whose grain exports this month became subjected to extreme import penalties in China following Chinese claims Australian cargoes were "dumped" in overseas markets in 2018 at discounted values which did not reflect the crop's true production costs.

According to ABARES, unlike Australia, other barley producers around the world enjoyed government support equivalent to an average six per cent of their farm revenues.

Beef producers' earnings averaged even more subsidy help.

The ABARES analysis confirms findings in a recent report by the Australian Farm Institute and GrainGrowers which highlighted Australia having about the lowest levels of agricultural support across the 37 Organisation for Economic Co-operation and Development (OECD) member countries.

ABARES found Australia even compared favourably to support given in major emerging economies.

Australia's reform experience shows that deregulating the agriculture sector and removing distorting forms of support spurs overall sector growth - Jared Greenville, ABARES

Recent OECD research also indicated countries with lower subsidies had better performing farm sectors, which over time had faster growing farm incomes than heavily subsidised ones.

Report author and ABARES' forecasting and trade head Dr Jared Greenville said keeping subsidies low was important for both Australian producers and international markets.

Less subsidies - more growth

"Australia's reform experience shows that deregulating the agriculture sector and removing distorting forms of support spurs overall sector growth," he said

"It increases participation in global markets and the contribution agriculture makes to the rural and national economy."

Meanwhile, the costs of increasing subsidies and trade distortions were felt more in countries that implement these policies than elsewhere.

Dr Greenville said no targeted subsidies were provided to Australian producers of our most traded products-beef and veal and grain, including barley.

"In contrast, global levels of support for beef and veal were around 13pc of farm revenues, on average," he said.

"Grains markets, other than rice, are relatively free from market distortions-on average three per cent and six per cent for wheat and barley, respectively."

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ABARES study of support for Australian farmers also examined the potential impacts of creeping protectionism in a post-COVID-19 trading environment.

Coronavirus factor

"The use of export restrictions and increases in support during COVID-19, along with the initial signs of a trend to rising overall levels of support, brings into focus the need for an effective international system to ensure agricultural markets continue to address food security concerns and drive economic development," Dr Greenville said.

"Governments will need to make investments in agriculture to help meet global development goals.

"But it is important that these investments do not harm producers elsewhere.

"Future trade rules will need to be set to help achieve this outcome."

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