Agricultural Policy Monitoring and Evaluation 2025

5. Australia

Main findings

Support to agriculture

Australia’s support to agricultural producers (Producer Support Estimate, PSE) is among the lowest in the OECD, estimated at 2.7% of gross farm receipts in 2022-24, slightly lower than the 3.7% observed two decades ago. Policies emphasise market openness, building resilience, and investments in general services, including research and development (R&D), hydrological infrastructure, and biosecurity.

Market Price Support (MPS) to producers ended in 2000 and domestic prices for Australia’s main agricultural outputs have been aligned with world prices since then. Most producer support in 2022-24 was in the form of disaster relief payments and income-smoothing programmes that address cashflow fluctuations. Payments on variable input use are also used, mainly concessional loans for on-farm investments, including in response to adverse events.

The General Services Support Estimate (GSSE) averaged around 2% of the value of agricultural production during 2022-24, similar to 1.9% of the early 2000s and below the OECD average of 3.5% for 2022-24. More than half of this went to support for R&D, innovation, and extension services (corresponding to 1.3% of agricultural production value, compared with 1.1% in the OECD on average). Public expenditure to develop and upgrade infrastructure (mostly hydrological) and strengthen biosecurity represented most of the remaining general services expenditure.

Overall support to agriculture (Total Support Estimate, TSE) represented 0.2% of Gross Domestic Product (GDP) in 2022-24, essentially unchanged since 2000-02.

Key recent policy changes

Australia adopted legislation in July 2024 to ban live sheep export by sea from May 2028. To assist with the transition for those affected within the broader sheep supply chain, the 2024-25 budget introduced a package of nearly AUD 140 million (USD 92.4 million) over five years.

Australia and the United Arab Emirates signed a Comprehensive Economic Partnership Agreement (CEPA) in November 2024, scheduled to enter into force in mid to late -2025. This is Australia’s first bilateral trade agreement with a country in the Middle East, presenting new export opportunities for Australia’s agricultural sector.

Several policy developments aimed to continue strengthening drought resilience. Replacing the Drought Response, Resilience and Preparedness Plan, the Australian Government Drought Plan (2024-29) outlines the country’s updated national drought policy, in parallel with the National Drought Agreement (2024-29) that sets out collaboration between the national government, states and territories. The second phase of the Future Drought Fund also started in 2024, accompanied by AUD 561 million (USD 370.2 million) of funding over several years to finance drought preparedness and resilience.

Assessment and recommendations

• Considering Australian agriculture’s strong export orientation, domestic efforts on environmental sustainability have potential to reduce the environmental impact of Australian agri-food trade. There have been a growing number of initiatives in recent years, mainly relying on voluntary approaches to sustainability, using market-based tools, sector-led frameworks based on government-industry partnerships, as well as information and investment instruments. The government should further ensure the necessary incentives for the agricultural sector to improve its sustainability performance and self-report in a transparent way. With limited mechanisms in place to penalise poor performers, finding ways to encourage participation in voluntary sustainability schemes and assess their overall impact will be vital for demonstrating the environmental sustainability credentials of Australian agricultural products on international markets.

• Despite a significant share of funding dedicated to general services, annual productivity growth has slowed down and even reversed, from 1.2% p.a. in 1991-2000 to -0.6% p.a. in 2013-2022. Increasing productivity growth in an environmentally sustainable way will require making better use of funding, with a tighter focus on overcoming challenges related to sustainable productivity growth, directed to improve both productivity and sustainability performance.

• Extension services and agricultural education receive less funding than many other parts of the AKIS. Scaling up knowledge-transfer services in partnership with the private sector, such as the Cooperative Research Centres (CRCs), can facilitate uptake of innovations, support sustainable productivity growth, and strengthen on-farm capacity to manage risks. Funding to accelerate the development and commercialisation of technological solutions to reduce emissions rightly focuses on methane emissions from enteric fermentation of livestock, which represent 70% of Australia’s agricultural emissions. However, the extent to which technologies such as feed supplements can drive reductions remains uncertain. To support the red meat industry’s contributions to Australia’s net-zero ambitions across the red meat and livestock supply chains, other tools like emissions taxes, standards, and regulations will be needed to create sufficient incentives for farmers to adopt low-emission technologies.

• The Australian Carbon Credit Unit (ACCU) scheme supports projects to reduce or avoid GHG emissions or store carbon. Historically, these projects have yet to demonstrate significant reductions under methods classified as agricultural methods, although an “integrated farm and land management” method is in development. Between 2019 and 2024, over 57 million ACCUs were issued to agriculture and vegetation projects, which are predominantly undertaken on agricultural land. There is significant scope for more supply of land-based offsets with the development of additional methods and as demand for ACCUs builds. Increasing the scale and effectiveness of mitigation projects in agriculture and building confidence in the transparency and integrity of ACCUs is essential to the scheme’s success in reducing agricultural GHG emissions. Furthermore, developing a sector specific emissions reduction pathway based on expert advice will be essential for achieving the legislated net zero emissions target for the overall economy by 2050.

• Sustainable management of water resources is essential for Australian farmers to adapt to higher temperatures, lower winter rainfall, and increased frequency of drought and extreme weather events. Investments in water infrastructure should be assessed regarding their effects on water consumption and return flows to groundwater and surface water as well as other socio-economic impacts. Irrigation infrastructure subsidies should be weighed against alternatives such as direct purchases of water entitlements, as has been done in the Murray Darling Basin.

Development of support to agriculture

Table 5.1. Australia: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2022-24	2022	2023	2024p
Total value of production (at farm gate)	14 363	19 620	60 376	65 501	54 988	60 640
of which: share of MPS commodities (%)	82.61	74.79	72.69	75.76	71.04	71.28
Total value of consumption (at farm gate)	5 048	7 490	22 045	21 710	22 426	21 999
Producer Support Estimate (PSE)	1 409	762	1 699	2 098	1 531	1 468
Support based on commodity output	999	0	0	0	0	0
Market price support¹	999	0	0	0	0	0
Positive market price support	1 001	0	0	0	0	0
Negative market price support	-2	0	0	0	0	0
Payments based on output	0	0	0	0	0	0
Payments based on input use	230	309	561	671	514	498
Based on variable input use	217	14	189	241	167	158
with input constraints	0	4	9	13	13	0
Based on fixed capital formation	4	145	149	176	138	134
with input constraints	0	0	0	0	0	0
Based on on-farm services	9	149	223	254	208	207
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	11	814	922	746	774
Based on Receipts / Income	0	11	814	921	746	774
Based on Area planted / Animal numbers	0	0	0	1	0	0
With input constraints	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	181	442	311	492	255	184
With variable payment rates	181	343	307	488	251	180
with commodity exceptions	0	110	170	229	176	106
With fixed payment rates	0	99	4	4	4	4
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	0	13	13	16	11
Based on long-term resource retirement	0	0	0	0	0	0
Based on a specific non-commodity output	0	0	11	10	14	10
Based on other non-commodity criteria	0	0	2	3	2	2
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	9.64	3.74	2.73	3.10	2.71	2.36
Producer NPC (coeff.)	1.08	1.00	1.00	1.00	1.00	.
Producer NAC (coeff.)	1.11	1.04	1.03	1.03	1.03	1.02
General Services Support Estimate (GSSE)	98	370	1 215	1 289	1 191	1 164
Agricultural knowledge and innovation system	95	253	767	789	761	750
Inspection and control	3	39	134	123	140	138
Development and maintenance of infrastructure	0	75	282	342	258	245
Marketing and promotion	0	4	27	24	30	28
Cost of public stockholding	0	0	0	0	0	0
Miscellaneous	0	0	5	10	3	3
Percentage GSSE (% of TSE)	6.50	36.45	41.76	38.05	43.77	44.23
Consumer Support Estimate (CSE)	-512	-116	0	0	0	0
Transfers to producers from consumers	-512	0	0	0	0	0
Other transfers from consumers	0	0	0	0	0	0
Transfers to consumers from taxpayers	0	-116	0	0	0	0
Excess feed cost	0	0	0	0	0	0
Percentage CSE (%)	-10.16	-1.52	0.00	0.00	0.00	0.00
Consumer NPC (coeff.)	1.11	1.00	1.00	1.00	1.00	1.00
Consumer NAC (coeff.)	1.11	1.02	1.00	1.00	1.00	1.00
Total Support Estimate (TSE)	1 507	1 016	2 914	3 386	2 722	2 632
Transfers from consumers	512	0	0	0	0	0
Transfers from taxpayers	995	1 016	2 914	3 386	2 722	2 632
Budget revenues	0	0	0	0	0	0
Percentage TSE (% of GDP)	0.65	0.25	0.16	0.19	0.16	0.15
Total Budgetary Support Estimate (TBSE)	509	1 016	2 914	3 386	2 722	2 632
Percentage TBSE (% of GDP)	0.22	0.25	0.16	0.19	0.16	0.15
GDP deflator (1986-88 = 100)	100	149	294	284	295	302
Exchange rate (national currency per USD)	1.40	1.83	1.49	1.44	1.51	1.52

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Australia are: wheat, barley, oats, sorghum, rice, soybean, rapeseed, sunflower, sugar, cotton, milk, beef and veal, sheep meat, wool, pig meat, poultry and eggs.

Source: OECD (2025), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

Australia’s agricultural policy is characterised by targeted public spending, with a strong focus on voluntary, market-based and information instruments. Support to agriculture comprises a mix of direct budgetary outlays, concessional loans and tax concessions. Direct support is provided to upgrade on-farm infrastructure that aims to improve the efficiency of natural resource use. Several programmes also support the development and uptake of farming practices to enhance sustainability. Direct producer support is low and domestic prices are aligned with world prices.

Concessional loan schemes target investments in new farm businesses, farm succession arrangements, drought resilience and preparedness. The Regional Investment Corporation (RIC) has administered the Australian Government’s concessional farm business loans since 2018, providing concessional interest rates.

Income stabilisation tools such as the Farm Management Deposits Scheme and income tax averaging arrangements are designed to strengthen financial risk management by helping primary producers to deal more effectively with fluctuations in cash flows. For producers experiencing hardship, regardless of the cause, the Farm Household Allowance provides basic income support. This is supplemented with natural disaster assistance provided as concessional loans through the Disaster Recovery Funding Arrangements that came into force in 2018. Dependent on the scale of the disaster, this can provide a range of different assistance constructions to affected primary producers. Primary producers experiencing financial hardship can also access free, confidential financial counselling under the Rural Financial Counselling Service Program.

Research and development (R&D) programmes are a major component of Australian support to agriculture. Several research grants are underway to help agriculture overcome specific challenges, such as biosecurity or soil management.1 Australia’s agricultural innovation system is underpinned by government and industry investment in the 15 rural research and development corporations (RDCs). RDCs commission research, development and extension activities. The RDCs receive funding through a levy collection system (a research and development levy is in place for various commodities), complemented by marketing for some RDCs, and the government provides matched funding for eligible R&D expenditure (Australian Government, 2025[1]).

A smaller portion of public expenditure goes to the development and maintenance of infrastructure and inspection services, including pest and disease control activities. Efforts to strengthen biosecurity are an important focus area within this pillar. Reinforced by several amendments between 2022-2024 to provide more effective information sharing and compliance measures, the Biosecurity Act 2015 aims to ensure an effective response to emerging biosecurity risks. The National Biosecurity Strategy (NBS), released in 2022, outlines the 10-year vision for the Australian biosecurity system to guide efforts across governments at different levels, industries and communities. The Australian Government has provided over AUD 1 billion (USD 0.7 billion) in new biosecurity investments over four years from 2023-24, and over AUD 260 million (USD 171.6 million) per year from 2027-28 onwards, to provide sustained financial resources to deliver on biosecurity commitments. In addition, two national plans enhance preparedness and diagnostics of terrestrial and aquatic animal diseases: the National Action Plan for Production Animal Health (ANIMALPLAN) and the National Strategic Plan for Aquatic Animal Health (AQUAPLAN), both spanning from 2022 to 2027. The Animal Sector Antimicrobial Resistance (AMR) Action Plan aims to mitigate AMR and enhance animal health.

There are three established response agreements to support the eradication of pest and disease incursions in Australia: the Emergency Plant Pest Response Deed (EPPRD), Emergency Animal Disease Response Agreement (EADRA), and the National Environmental Biosecurity Response Agreement (NEBRA). These are cost-sharing agreements between Australia’s governments and industry groups which aims to reduce the risk and minimise the impact in case of a pest or disease outbreak. While industry and governments cost-share actions to address pest and disease outbreaks, trade-related costs of biosecurity and food safety inspection services are covered by industry.

As the driest inhabited continent, drought policy is key for supporting the agriculture sector. The new Australian Government Drought Plan 2024-29 sets out the government’s programmes and activities before, during and after drought, as well as the overall principles guiding drought policy.

Set up in 2019, the Future Drought Fund (FDF) is a AUD 5 billion (USD 3.3 billion) investment by the government, aimed at strengthening drought resilience. The FDF invests in a broad portfolio and is managed with the aim of generating at least a 2% return above the inflation rate per year. AUD 100 million (USD 66 million) of the returns are made available each year to support farmers to become more resilient to the effects of future drought and climate change (Australian Government, 2025[2]). The FDF’s second phase started in 2024 following national consultation and the first phase’s review, with AUD 561 million (USD 370.2 million) committed for this phase over several years.

Australia’s first revised Nationally Determined Contribution (NDC) commits to achieving net zero greenhouse gas (GHG) emissions by 2050 and reducing them to 43% below 2005 levels by 2030.These emissions reduction targets are legislated domestically by the Climate Change Act 2022. While agriculture is included in economy wide emissions reduction targets, no specific emissions reduction targets have been defined for the agricultural sector.

Investments in climate-smart and sustainable agriculture projects have increased in recent years to support the uptake of agricultural practices that reduce emissions and build resilience against climate change. Several targeted programmes are underway to support emissions reductions in the sector, such as the Climate-Smart Agriculture Program with a budget of AUD 302 million (USD 199.3 million) and the Carbon Farming Outreach Program. In addition, voluntary certification schemes, such as the government-developed Climate Active Carbon Neutral Standard, aim to inform and incentivise GHG emissions reduction efforts.

Different market-based approaches are also in place to incentivise farmers and landowners to reduce GHG emissions and protect biodiversity. The Australian Carbon Credit Unit (ACCU) Scheme, formerly known as the Emissions Reduction Fund, was established in 2011 under the Carbon Credits (Carbon Farming Initiative) Act 2011. The ACCU Scheme incentivises individuals and businesses to voluntarily undertake projects that reduce emissions or store carbon. Farmers and landowners can earn income – eligible for income tax averaging from 2023 – by generating ACCUs for every tonne of emissions reduced or carbon stored through a project and selling these to governments or private buyers. Private buyers may purchase ACCUs to voluntarily offset their emissions or meet compliance requirements.2

Similarly, enabled by the Nature Repair Act (2023), the Nature Repair Market allows landholders, including farmers, to voluntarily undertake projects that improve biodiversity e.g. protecting and restoring existing habitat or native vegetation.3 Eligible projects receive a biodiversity certificate that can be retained or sold to buyers who wish to support biodiversity. The Nature Repair Market aligns with the ACCU Scheme allowing projects to earn both a biodiversity certificate and ACCUs where they meet requirements.

Schemes, such as the mandatory dairy code of conduct under the authority of the Australian Competition and Consumer Commission (ACCC), aim to enhance market transparency. Efforts are underway to enhance the transparency of agri-food businesses’ ESG performance and carbon footprints.

Policies encourage access to export markets. This includes helping exporters overcome market access barriers and costs associated with exports registration. Australia has 18 comprehensive regional or bilateral free trade agreements with 30 economies in force, to which will add the new Australia and the United Arab Emirates Comprehensive Economic Partnership Agreement that is expected to enter into force in mid-2025.4 Tariff rates on imports of agricultural and food products are low (1.2% on average) and less than half than tariff rates on of non-agricultural goods (2.6% on average) (WTO, 2024[3]). Several sanitary and phytosanitary measures are in place to manage pest and disease risks that could harm the sector and affect plant, animal and human health as well as the environment more broadly.

Policies for trade and sustainability in agro-food markets

Australia has environment-related provisions with specific links to agriculture in the Australia-Korea Free Trade Agreement, in place since 2014. This is Australia’s only trade agreement with specific agri-environmental provisions. Article 14.6 on innovation, research and development sets out an environmental co-operation provision and recognises its importance to agriculture, particularly in terms of sustainable resource management, water management and water use efficiency, climate change adaptation and mitigation. Article 16.5 on agriculture also includes environmental co-operation provisions and foresees collaboration between Korean and Australian farmers and agri-businesses on environmental and natural resource economics and management, as well as sustainable conservation and farming techniques. The responsible entity is the Committee on Agricultural co-operation, established by the same treaty. Collaboration involves technical co-operation, information exchanges, joint research projects and exchanges of experts (Frezal and Deuss, 2025[4]).

Around 70% of the total value of agricultural production is exported, so domestic greenhouse gas reduction measures have a strong impact on the environmental performance of agri-food trade.5 Australian agriculture mainly relies on voluntary approaches using market-based tools, sector-led frameworks based on government-industry partnerships, as well as information and investment instruments, including targeted innovation investments, with a growing number of initiatives established recently (Deuss, Watson and du Bois, 2025[5]). The ACCU Scheme incentivises GHG emissions reductions associated with agricultural products, including traded goods. Similarly, the Climate Smart Agriculture Programme funded by the Natural Heritage Trust supports the agriculture sector to mitigate greenhouse gas emissions. Research and development investments also help reduce the carbon footprint of export products, including through the RDCs. The Zero Net Emissions from Agriculture Cooperative Research Centre promotes the measurement and reduction of greenhouse gas emissions. It aims to ensure that Australian agriculture can grow and enhance its domestic and international market access, while achieving net zero emissions by 2040. The Methane Emissions Reduction in Livestock (MERiL) programme supports research and development of methane-reducing feed additives and forage legumes for livestock.

Australia has several initiatives to measure the carbon footprint of agri-food products and improve these measurements. Voluntary GHG emissions estimating and reporting standards for agriculture are being developed, covering emissions across all three scopes which can be incorporated into GHG calculators and accounting tools. In addition, the Improving Greenhouse Gas Accounting at the farm level grant will help improve the consistency of on-farm greenhouse gas emission calculators. Given international markets’ growing interest in verified greenhouse gas calculators, it contributes to keeping the market access and competitivity of Australian agricultural products.

The Australian Agricultural Sustainability Framework (AASF), initiated in 2020, aims to help demonstrate the alignment of Australian agriculture with global sustainability commitments and ESG principles which is increasingly required by international markets. An industry-led partnership, coordinated by the National Farmers’ Federation and supported by the DAFF, the AASF includes emissions reductions as one of its 17 principles, grouped under the framework’s three overarching themes which cover the environmental, social and economic dimensions of sustainability. The framework does not involve direct reporting, but rather seeks to provide an overview on the sector’s overall performance and help farmers understand and align with existing and emerging sustainability schemes that become increasingly key for exporting to international markets. Furthermore, the AASF seeks to inform and encourage investments in data, technology and practices that enable the sector to prove their compliance with sustainability criteria, including emissions reduction targets. The second phase of the AASF started in 2023, focused on operationalising the framework, developing proposal and mechanisms for data sharing and running pilots (DAFF, 2025[6]).

Recent policy developments

Domestic policy developments in 2024-25

The new Australian Government Drought Plan replaced the previous Drought Response, Resilience and Preparedness Plan of 2019. The new plan sets out government drought policy between 2024 and 2029 and key programmes to support farming businesses and communities in the drought cycle. It was developed in parallel with the National Drought Agreement (2024-29) that sets out collaboration between the national government, states and territories to ensure co-ordinated drought resilience policy and programmes. AUD 13.9 million (USD 9.2 million) of departmental funding was committed over four years to support drought policy implementation, with around AUD 3.4 million (USD 2.2 million) of additional annual funding from 2028-29 onward.

The second phase of the Future Drought Fund started in 2024, with a budget of AUD 519 million (USD 342.5 million) over eight years to extend some of the existing programmes and develop new ones. This is alongside AUD 42 million (USD 27.7 million) over four years for the effective management of the FDF. Guided by the Drought Resilience Funding Plan (2024-2028) and the FDF Investment Strategy, the current phase delivers 11 programmes around five priority areas, namely: i) partnering for local solutions, ii) partnering for First Nation initiatives, iii) building knowledge, skills and capability, iv) innovating for transformation, and v) measuring progress and knowledge sharing.

The Zero Net Emissions from Agriculture Cooperative Research Centre (ZNE Ag CRC) was established in 2024 to conduct large-scale, long-term research to accelerate the development and implementation of emissions reductions solutions on Australian farms. It aims to catalyse industry, community and government actions to achieve net zero emissions from agriculture by 2040. (ZNE Ag CRC, 2022[7]).

Stage 3 Round 2 of the MERiL programme provided AUD 9 million (USD 5.9 million) in the form of grants from 2024-25 to 2026-27 to successful grant applicants to validate and demonstrate technologies to deliver feed additives that reduce grazing animals’ methane emissions.

The Climate Change Authority (CCA) has published Sector Pathways Reviews, including for the Agriculture and Land sector in 2024. These pathways and the CCA’s advice is used to develop the Net Zero Plan and it is sector specific plans, which will include an emissions reduction plan for the agricultural sector as well (DCCEEW, 2025[8]). To support reducing and tracking GHG emissions from the agriculture and land sector in relation to the forthcoming plan, AUD 60.8 million (USD 40.1 million) (DAFF, 2024[9]) in funding was announced in the 2025-26 Budget to support three main projects which focus on GHG emissions reduction and accounting, as well as research partnerships:

• AUD 27.8 million (USD 18.3 million) will be dedicated over four years for the further development of the Carbon Farming Outreach Program. The programme provides information and support to Australian farmers and land managers, including First Nations peoples, to adopt low emissions technologies and practices into their operations and participate in carbon markets. The additional funding will provide training for advisors, develop a knowledge bank, including tailored First Nations resources and support RDCs to develop commodity-specific information.

• AUD 28.7 million (USD 18.9 million) over ten years will improve greenhouse gas accounting at the national through to farm level. The funding will support enhancements to methods and data for estimating emissions in the National Greenhouse Gas Accounts, development of voluntary emissions estimation and reporting standards for agriculture, and integration of the standards into greenhouse gas calculators. These improvements will support farmers and land managers to estimate their emissions, as well as to drive action to reduce emissions and sequester carbon. It also aims to assist in responding to emerging reporting requirements by supply chains, international markets and the finance sector.

AUD 4.4 million (USD 2.9 million) over ten years for the Department of Agriculture, Fisheries and Forestry (DAFF) to become a formal partner of the ZNE Ag CRC throughout its whole lifespan. The inaugural NBS Action Plan for the delivery of the National Biosecurity Strategy (NBS) was approved in 2024, outlining activities for the 2024-26 biennium guiding nationwide activities, investment and planning to strengthen the biosecurity system. Furthermore, the DAFF Biosecurity 2030 Roadmap refreshed the previous Commonwealth Biosecurity 2030 roadmap, facilitating the delivery of the NBS and a risk-based and effective biosecurity system.

In March 2025, the National Management Agreement for H5 High Pathogenicity Avian Influenza (HPAI) in Wildlife came into effect. Known as H5 NMA, the agreement is complementary to the EADRA and provides a mechanism to govern and cost-share a future national response a H5 HPAI incursion in wildlife, where eradication or containment of the disease is unlikely.

The 2024-25 budget provided AUD 1.9 million (USD 1.3 million) over three years to develop Australia’s future agricultural workforce via enhancing awareness of career opportunities in the agricultural sector. These include funding a skilled agricultural work liaison program, a gap year farm employment programme and National Farm Safety Week activities to deliver farm safety information.

Trade policy developments in 2024-25

The Australian Parliament passed legislation in July 2024 to end live sheep export by sea by May 2028. An assistance package of AUD 139.7 million (USD 92.2 million) over five years was announced to support the supply chain’s transition. This includes assistance to sheep and wool producers and the wider supply chain, enhancing market demand domestically and abroad for high-quality sheep products, food and fibre, and supporting trade relationships in the Middle East and North Africa. Policy support and monitoring is also included in the transition package.

The National Agricultural Traceability Strategy (2023-33) outlines a common approach to enhance Australia’s agricultural traceability systems. The strategy and its implementation plan, which was released in 2024, aim to enable industry-government collaboration to strengthen biosecurity and food safety, grow market access, and protect cultural intellectual property for First Nations products. From a total of 97 grants, there are 62 grants underway to support the strategy’s implementation.

Australia and the United Arab Emirates signed a Comprehensive Economic Partnership Agreement (CEPA) in November 2024, scheduled to enter into force in mid-2025. Australia’s agriculture, forestry and fisheries exports to the UAE were worth AUD 1.7 billion (USD 1.1 billion) in the 2023-24 financial year, with the CEPA expected to further enhance Australia’s trade engagement in the Middle East.

Australia continues negotiations for trade agreements with the European Union and India which have been the destination of AUD 3 billion and AUD 1.5 billion, respectively, worth of Australian agriculture, forestry and fisheries exports in the 2023-24 financial year (USD 2 billion and USD 1 billion, respectively). Negotiations have been underway for a Free Trade Agreement with the European Union since 2018, as well as for a Comprehensive Economic Cooperation Agreement with India which would replace the interim Australia-India Economic Cooperation and Trade Agreement that entered into force in 2022.

Policy context

Key economic and agricultural statistics

Australia is the world’s 19^th largest economy in purchasing power parity (PPP) terms and the sixth largest country by land area, accounting for over 12% of all agricultural land in the 54 countries included in this report, but only 0.5% of the total population of these countries. The country’s GDP per capita is more than twice the average of the countries covered in this report (Table 5.2). Agriculture represents a small share of the economy, accounting for just 2.4% of GDP and 2.1% of total employment in 2023. Australia is an important producer of agricultural commodities. In 2023, the country ranked as the world’s second-largest producer of sheep meat, beef and barley, and is also among the world’s top-ten producers of wheat, oats, rapeseed and sugar cane.

After almost three decades of uninterrupted GDP growth, economic growth became negative in 2019. Real GDP growth rebounded to 4.2 % and 3.4% growth in 2021 and 2022, respectively, with a more modest, but positive 1.4% and 1.1% growth in 2023 and 2024 respectively. The unemployment rate fell from 6.4% in 2019 to 4.1% in 2024 (Figure 5.3). Inflation decreased to 3.2 % in 2024, after it reached its highest level in more than three decades in 2022 with 6.6%.

Table 5.2. Australia: Contextual indicators

	Australia		International comparison
	2000*	2023*	2000*	2023*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	539	1 952	1.3%	1.3%
Population (million)	19	27	0.4%	0.5%
Land area (thousand km2)	7 682	7 692	9.4%	9.3%
Agricultural area (AA) (thousand ha)	455 469	363 519	15.2%	12.5%
			All countries1
Population density (inhabitants/km2)	2	3	52	64
GDP per capita (USD in PPPs)	28 333	73 248	9 368	29 013
Trade as % of GDP	16.5	18.9	12.3	14.9
Agriculture in the economy			All countries1
Agriculture in GDP (%)	3.8	2.4	2.9	3.5
Agriculture share in employment (%)	4.8	2.1	-	-
Agro-food exports (% of total exports)	23.1	13.1	6.4	8.1
Agro-food imports (% of total imports)	4.3	5.9	5.8	7.3
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	55.0	58.0	-	-
Livestock in total agricultural production (%)	45.0	42.0	-	-
Share of arable land in AA (%)	5.2	8.6	31.8	33.3

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Australia is a net exporter of agricultural products. Around 70% of the value of agricultural production is exported, and the country is a major exporter of wheat, barley, cattle, beef, sheep meat, dairy, wool, rapeseed, cotton, fruit and nuts and pulses. Primary goods for industry make up 48%, while goods processed for final consumption correspond to 36% of the country’s agro-food exports. Approximately two-thirds of Australia’s agro-food imports cover goods processed for final consumption, while 16% is destined for the processing industry (Figure 5.4).

Over the 2013-22 period, agricultural output grew by 0.3% per year, compared to a 1.8% per year increase globally (Figure 5.5). This was partly due to a decline in total factor productivity (TFP), which fell by -0.6% per year (compared with the global average of 0.8% growth). This slowdown in TFP growth is due to a combination of factors including climate change, hanging natural conditions, volatile prices and few transformative technological developments (ABARES, 2025[10]). Primary factor growth was almost 0.3% per year. Meanwhile, intermediate input use grew at 0.6% per year on average.

Agriculture accounted for 14.9% of Australia’s GHG emissions in 2023 and can play an important role in helping the country to achieve its economy-wide target of net-zero emissions by 2050 (Table 5.3). Agriculture’s contribution to GHG emissions has declined over the past two decades but remains above the OECD level. The share of agriculture in total energy use has increased slightly since 2000 and was above the OECD average in 2023, despite the small share of the sector in the economy.

Compared to the OECD area, agriculture accounts for a relatively high share of total water abstractions. While aggregate national indicators suggest that water stress is less of a problem than in many OECD countries, water availability and competition for natural resources with other sectors remains a significant constraint that is likely to be exacerbated by climate change. Estimates also indicate a relatively low nitrogen surplus balance and point to a low phosphorous balance.

Table 5.3. Australia: Productivity and environmental indicators

	Australia		International comparison
	1991-2000	2013-2022	1991-2000	2013-2022
			World
TFP annual growth rate (%)	1.2%	-0.6%	1.7%	0.8%
			OECD average
Environmental indicators	2000*	2023*	2000*	2023*
Nitrogen balance, kg/ha	20.2	17.8	32.0	29.7
Phosphorus balance, kg/ha	1.3	0.6	3.3	2.5
Agriculture share of total energy use (%)	2.3	3.1	1.7	2.0
Agriculture share of GHG emissions (%)	17.5	14.9	8.7	10.1
Share of irrigated land in AA (%)	0.5	0.5	-	-
Share of agriculture in water abstractions (%)¹	67.7	67.0	47.0	49.5
Water stress indicator	4.5	3.3	8.7	..

Note: * or closest available year. 1. Data are not comparable between time periods, 2020 data from Australian Bureau of Meteorology (2021).

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Before the 1980s, Australian agriculture was supported by a range of measures designed to maintain and stabilise farm income, and to provide farmers with support to offset the perceived disadvantages of remoteness. In 1980, Australia had 65 statutory marketing boards that used border protection through tariffs and import controls to divide domestic and international markets, and set higher prices in domestic markets (Table 5.4). Price stabilisation schemes assisted export industries such as wheat, manufactured dairy products, sugar, and dried vine fruit. Other policy measures included fertiliser subsidies, income tax incentives, rural credit, subsidies for agricultural research and extension, and public investment in land and water development and rural infrastructure.

Australia’s agricultural policy evolved significantly starting in the mid-1980s. Competition policy reforms in the 1980s and 1990s led to dismantling marketing boards and the removal of policies that distort agricultural production and trade. The National Drought Policy introduced in 1992 formalised the transfer of drought risk management to farmers and repurposed government support towards resilience-strengthening activities. Open trade and anti-dumping legislation ensured competitive markets across the whole economy, reducing the need for sector-specific measures. Price stabilisation policies were relaxed, with price and output controls removed and centralised marketing schemes gradually dismantled (Gray, Oss-Emer and Sheng, 2014[11]). Tariffs were reduced. Floating exchange rates and trade liberalisation reduced price volatility in agricultural commodities.

In Australia, total support to the sector is composed of general services and budgetary payments to producers. Market price support was progressively phased out during the 1990s, and support to producers (PSE) is now among the lowest in the OECD. Producer support is mostly delivered through payments based on inputs and payments not requiring production.

Table 5.4. Australia: Agricultural policy trends

Period	Framework	Changes in agricultural policies
Prior to 1980s	Closed economy (interventionist agricultural policy)	High tariffs Production quotas Price controls Tariff protection and import controls carried out by 65 statutory commodity marketing boards
1980-Present	Reforms and trade liberalisation	Floating exchange rates Removal of agricultural price and output controls Gradual dismantling of Statutory marketing authorities Reduction of agricultural tariffs on both outputs and inputs Sanitary and phytosanitary (SPS) measures strengthened

References

[10] ABARES (2025), Snapshot of Australian Agriculture 2025, https://www.agriculture.gov.au/abares/products/insights/snapshot-of-australian-agriculture#around-70-of-agricultural-production-is-exported (accessed on 10 March 2025).

[14] Australian Clean Energy Regulator (2025), Quarterly Carbon Market Report December Quarter 2024, https://cer.gov.au/markets/reports-and-data/quarterly-carbon-market-reports/quarterly-carbon-market-report-december-quarter-2024 (accessed on 26 September 2025).

[2] Australian Government (2025), Future Drought Fund, https://www.agriculture.gov.au/agriculture-land/farm-food-drought/drought/future-drought-fund (accessed on 3 March 2025).

[1] Australian Government (2025), Research and Development Corporations, https://www.agriculture.gov.au/agriculture-land/farm-food-drought/innovation/research_and_development_corporations_and_companies (accessed on 2 May 2025).

[6] DAFF (2025), Project 23: Australian Agriculture Sustainability Framework (AASF), https://www.agriculture.gov.au/agriculture-land/animal/health/animal-plan/project-23 (accessed on 4 September 2025).

[9] DAFF (2024), Agriculture and Land Sectoral Plan, https://www.agriculture.gov.au/agriculture-land/farm-food-drought/climatechange/ag-and-land-sectoral-plan (accessed on 4 July 2025).

[8] DCCEEW (2025), Net Zero, https://www.dcceew.gov.au/climate-change/emissions-reduction/net-zero (accessed on 6 March 2025).

[13] DCCEEW (2025), “Proposed Integrated Farm and Land Management method”, https://www.dcceew.gov.au/climate-change/emissions-reduction/accu-scheme/methods/integrated-farm-and-land-management (accessed on 26 September 2025).

[5] Deuss, A., A. Watson and O. du Bois (2025), “Environmental sustainability initiatives related to highly traded agricultural commodities: Case study of the Australian beef and wheat sectors”, OECD Food, Agriculture and Fisheries Papers, No. 220, OECD Publishing, Paris, https://doi.org/10.1787/0e943378-en.

[12] DFAT (2025), Australia’s free trade agreements (FTAs), https://www.dfat.gov.au/trade/agreements/trade-agreements (accessed on 3 March 2025).

[4] Frezal, C. and A. Deuss (2025), “Trade-related measures linked to the environmental sustainability of agriculture: A stocktake and typology”, OECD Food, Agriculture and Fisheries Papers, No. 216, OECD Publishing, Paris, https://doi.org/10.1787/ebfdca09-en.

[11] Gray, E., M. Oss-Emer and Y. Sheng (2014), “Australian agricultural productivity growth: past reforms and future opportunities”, ABARES research report 14.2, https://www.agriculture.gov.au/abares.

[3] WTO (2024), Tariff profiles: Australia, https://www.wto.org/english/res_e/statis_e/daily_update_e/tariff_profiles/AU_E.pdf (accessed on 12 March 2025).

[7] ZNE Ag CRC (2022), “Zero Net Emissions Agriculture CRC”, https://zneagcrc.com.au/ (accessed on 12 March 2025).

Notes

← 1.  For instance, the Soil Science Challenge Grants Program 2021-2026 supports research to overcome research gaps in Soil Science.

← 2.  Between 2019 and 2024, over 57 million ACCUs were issued to agriculture and vegetation projects, which are predominantly undertaken on agricultural land (Australian Clean Energy Regulator, 2025[14]). Each ACCU represents 1 tonne of carbon dioxide equivalent of abatement. Enabling the crediting of carbon stored, a new integrated farm and land management method is under development (DCCEEW, 2025[13]).

← 3.  Landholders can use the Platform for Land and Nature Repair (PLANR) to plan and cost potential nature repair projects with a geospatial tool.

← 4.  These are agreements with New Zealand (ANZCERTA 1983), Singapore (SAFTA 2003), Thailand (TAFTA 2005), the United States (AUSFTA 2005), Chile (ACI-FTA 2009), the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA 2010), Malaysia (MAFTA 2013), Korea (KAFTA 2014), Japan (JAEPA 2015), the People’s Republic of China (ChAFTA 2015), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP 2018), Hong Kong, China (A-HKFTA 2020), Peru (PAFTA 2020), Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA 2020), the Pacific Agreement on Closer Economic Relations (PACER Plus 2020), the Regional Comprehensive Economic Partnership Agreement (RCEP 2022), the Australia-India Economic Co-operation and Trade Agreement (ECTA 2022) and the United Kingdom (A-UKFTA 2023) (DFAT, 2025[12]).

← 5.  According to ABARES (2025[10]), 75% of beef and veal and 80% of mutton and lamb was exported based on the three-year average between 2021–22 and 2023–24.