Agricultural Policy Monitoring and Evaluation 2026

4. 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 1.8% of gross farm receipts in 2023-25, down from 3.6% 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 2023-25 was in the form of income-smoothing programmes that address cashflow fluctuations, disaster relief payments and tax rebates. Payments on 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 2023-25, similar to 1.9% of the early 2000s and below the OECD average. More than half of this went to support for R&D and innovation (corresponding to 1.3% of agricultural production value, slightly higher than the OECD average). Public expenditure to develop and upgrade infrastructure (mostly hydrological) and funding to strengthen biosecurity represented most of the remaining general services expenditure.

Overall support to agriculture (Total Support Estimate, TSE) represented 0.1% of Gross Domestic Product (GDP) in 2023-25, down from 0.2% in 2000-02, and well below the OECD average.

Key policy changes in 2025-26

Producer loans were allocated an additional AUD 1 billion (USD 0.6 billion) of funding over three years from 2026-27 through the Regional Investment Corporation. In response to continuing drought conditions in Australia, this was complemented with the introduction of a new Drought Hardship Loan, which seeks to help farmers finance short-term operating costs as they continue to manage drought impacts and plan for recovery.

The Agriculture and Land Sector Plan was released in September 2025. Supporting Australia’s Net Zero Plan, the sectoral plan aims to guide agriculture’s contribution to Australia’s goals of net zero greenhouse gas emissions by 2050. This complements Australia’s second Nationally Determined Contribution submitted under the Paris Agreement in 2025, which sets out Australia’s commitment to reduce net national greenhouse gas emissions by 62-70% compared to 2005 levels, covering all greenhouse gases and all sectors of the economy, including agriculture.

Building on the National Climate Risk Assessment, the first National Adaptation Plan was published in 2025. The Plan outlines the overall vision for climate change adaptation in Australia. Key priorities set for agriculture include further investment in technological innovation, research and development, improving water use and efficiency, addressing skills shortages in the production chains, diversifying crops and implementing new technologies and farming techniques.

The Australia and United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) entered into force in October 2025. Australia and the European Union concluded negotiations on a free trade agreement in March 2026.

Assessment and recommendations

• Refocus general services spending to strengthen sustainable productivity growth. Despite relatively high investment, productivity growth has slowed since the 1990s. Increasing productivity growth in an environmentally sustainable way will require making better use of funding, with a tighter focus on steering innovation to overcoming challenges related to sustainable productivity growth. Further enhancing knowledge transfer and skills systems, including extension and advisory services, agricultural education, and applied innovation uptake will be essential to help farmers adopt climate smart practices and improve risk management to keep sustainable productivity growth amidst increasing climate variability.

• Strengthen participation incentives and accountability within Australia’s expanding and largely voluntary sustainability framework to facilitate access to some export markets. Ensuring farmer participation in transparent data collection for sustainability reporting against clear protocols will be vital to credibly assess and demonstrate the environmental sustainability of Australian agricultural products in international markets.

• Strengthen implementation and co-ordination of Australia’s climate adaptation framework by translating national priorities into concrete, on‑farm actions, supported by clear roles and responsibilities across federal, state, and local governments. The National Adaptation Plan highlights that climate change adaptation measures taken to date are unlikely to be sufficient given the scale of projected climate change impacts and it rightly calls for reviewing the scale and scope of adaptation across all levels of government. This should include stronger horizontal co‑ordination across sectors, alongside partnerships with subnational authorities to reflect the local nature of adaptation. Establishing a robust monitoring and evaluation system with measurable indicators will be essential to track progress, avoid maladaptation, and ensure delivery of innovation, skills, water efficiency, and climate‑resilient farming practices.

• Assess the effects of investments in water infrastructure on water consumption and return flows to groundwater and surface water as well as other socio-economic impacts. Consider alternatives to irrigation infrastructure subsidies such as direct purchases of water entitlements, as has been done in the Murray Darling Basin. The 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.

• Strengthen and broaden the policy mix to increase efforts on agricultural emissions reductions in line with Australia’s net‑zero targets by accelerating the development and deployment of low‑emission technologies. Funding to accelerate the development and commercialisation of technological solutions to reduce emissions rightly focuses on methane emissions from enteric fermentation of livestock (representing 70% of Australia’s agricultural emissions), but 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, consider complementing voluntary and technology-based approaches with stronger incentives such as standards, emission taxes, or regulatory signals to drive adoption at scale. Continued improvement of land‑based offset mechanisms (e.g. Australian Carbon Credit Units) will also be important to ensure that they deliver transparent, efficient and sustainable solutions.

Key indicators on agricultural support

Table 4.1. Australia: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	14 322	20 076	60 761	55 051	62 482	64 751
of which: share of MPS commodities (%)	82.97	73.12	71.83	70.95	71.51	73.04
Total value of consumption (at farm gate)	4 942	7 714	21 457	22 330	23 673	18 367
Producer Support Estimate (PSE)	1 409	762	1 080	1 500	964	775
Support based on commodity output	998	-0	-0	0	0	0
Market price support¹	998	-0	-0	0	0	0
Positive market price support	1 000	-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	449	500	500	348
Based on variable input use	217	14	104	153	102	58
with input constraints	0	4	9	13	8	8
Based on fixed capital formation	4	145	166	162	216	121
with input constraints	0	0	0	0	0	0
Based on on-farm services	9	149	179	185	183	169
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	11	450	741	301	307
Based on Receipts / Income	0	11	450	741	301	307
Based on Area planted / Animal numbers	0	0	-0	0	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	176	253	158	116
With variable payment rates	181	343	171	250	153	111
with commodity exceptions	0	110	118	176	109	68
With fixed payment rates	0	99	5	4	5	5
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	-0	5	5	4	4
Based on long-term resource retirement	0	0	0	0	0	0
Based on a specific non-commodity output	0	0	2	3	2	2
Based on other non-commodity criteria	0	-0	2	2	3	3
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	9.65	3.66	1.74	2.65	1.52	1.18
Producer NPC (coeff.)	1.08	1.00	1.00	1.00	1.00	1.00
Producer NAC (coeff.)	1.11	1.04	1.02	1.03	1.02	1.01
General Services Support Estimate (GSSE)	98	370	1 206	1 279	1 199	1 139
Agricultural knowledge and innovation system	95	253	775	802	773	752
Inspection and control	3	39	169	183	171	154
Development and maintenance of infrastructure	0	75	237	262	236	215
Marketing and promotion	0	4	21	30	17	16
Cost of public stockholding	0	0	0	0	0	0
Miscellaneous	0	0	2	3	2	2
Percentage GSSE (% of TSE)	6.50	36.45	52.82	46.03	55.43	59.49
Consumer Support Estimate (CSE)	-509	-116	0	0	0	0
Transfers to producers from consumers	-509	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 (%)	-10.31	-1.48	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	2 285	2 779	2 163	1 914
Transfers from consumers	509	-0	-0	0	0	0
Transfers from taxpayers	999	1 016	2 285	2 779	2 163	1 914
Budget revenues	0	0	0	0	0	0
Percentage TSE (% of GDP)	0.64	0.25	0.13	0.16	0.12	0.10
Total Budgetary Support Estimate (TBSE)	509	1 016	2 285	2 779	2 163	1 914
Percentage TBSE (% of GDP)	0.22	0.25	0.13	0.16	0.12	0.10
GDP deflator (1986-88 = 100)	100	149	301	294	302	309
Exchange rate (national currency per USD)	1.40	1.83	1.52	1.51	1.52	1.55

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 (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

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 natural resource use efficiency. Several programmes also support the development and uptake of farming practices to enhance sustainability.

Concessional loan schemes target investments in new farm businesses, farm succession arrangements, hardship recovery, 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 compared to commercial loans, set biannually by the government. By the end of 2025, the RIC provided loans worth of AUD 3.76 billion (USD 2.4 billion) (RIC, n.d.[1]).

The Farm Management Deposits (FMD) Scheme and income tax averaging arrangements are designed to strengthen financial risk management by helping primary producers deal more effectively with fluctuations in cash flows. An FMD account allows eligible primary producers to make tax deductible deposits during years of good cash flow that can then be withdrawn during lower income years. In 2025‑26, the estimated cost of the scheme in tax revenue forgone is AUD 105 million (USD 67.7 million). For producers experiencing hardship, regardless of the cause, the Farm Household Allowance provides basic income support. This is supplemented with natural disaster assistance 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, with agricultural knowledge and innovation receiving AUD 1.18 billion (USD 0.76 billion) of support on average between 2023-25. Several research and development grants are underway to help agriculture overcome specific challenges, such as biosecurity or soil management. For example, the Soil Science Challenge Grants Program 2021-2026 supports research to overcome research gaps in soil science. 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 are funded primarily by research and development levies on various commodities, with government matching funding for expenditure on eligible research and development. Many RDCs also undertake marketing activities, funded by commodity marketing levies.

A smaller portion of public expenditure goes to the development and maintenance of infrastructure and inspection services, including pest and disease control activities, receiving AUD 619 million (USD 398.8 million) of support on average between 2023-25. Efforts to strengthen biosecurity are an important focus area within this pillar. Reinforced by several amendments between 2022-24 to improve 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. In addition, Animalplan 2022 to 2027, Australia’s national action plan for production animal health and the National Animal Health Diagnostic Business Plan 2021-26 aim to enhance Australia’s preparedness and diagnostics capabilities for terrestrial animal diseases. The Animal Sector Antimicrobial Resistance (AMR) Action Plan aims to mitigate AMR and enhance animal health.

There are four established response agreements to support the eradication of pest and disease incursions in Australia: the Emergency Plant Pest Response Deed (EPPRD), the Emergency Animal Disease Response Agreement (EADRA), the National Environmental Biosecurity Response Agreement (NEBRA), and the National Management Agreement for H5 High Pathogenicity Avian Influenza (HPAI) in Wildlife (the H5 NMA). These are cost-sharing agreements between Australia’s governments and relevant industry groups which aims to reduce the risk and minimise the impact in the event 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 largely covered by industry.

The 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. In parallel, the National Drought Agreement (2024-29) sets out collaboration between the national government, states and territories to ensure co-ordinated drought resilience policy and programmes.

The Future Drought Fund (FDF) provides funding for initiatives that support farmers and regional communities to build drought and climate resilience. It was set up in 2019 with an initial investment of AUD 3.9 billion (USD 2.5 billion) by the government and reached AUD 5 billion (USD 3.2 billion) in December 2024. The FDF invests in a broad portfolio and is managed with the aim of generating an average return over the long term of at least the Consumer Price Index plus 2-3% per annum, net of costs. Returns from the FDF are made available each year to support farmers and their communities to prepare for drought and climate variability (Australian Government, 2025[2]). Programmes delivered under the second Drought Resilience Funding Plan (2024-2028) are being implemented from July 2024, providing AUD 519 million (USD 334.4 million) over eight years from the FDF.

Australia’s second Nationally Determined Contribution (NDC) sets the commitment to reduce net national greenhouse gas emissions by 62-70% below 2005 levels by 2035, covering all sectors of the economy and all greenhouse gases. It reaffirms Australia’s commitment to reduce GHG emissions to 43% below 2005 levels by 2030 and to achieve net zero greenhouse gas emissions by 2050 legislated in 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 in the NDC. The Agriculture and Land Sector Plan, released in 2025, aims to guide the sectors’ contribution to Australia’s net zero goals.

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 194.6 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. Efforts are underway to improve greenhouse gas accounting at national and farm levels through a multi-pronged approach which includes the development of voluntary emissions estimation and reporting guidelines and facilitating the consistent adoption and incorporation of those guidelines into third-party GHG calculators. The Zero Net Emissions from Agriculture Cooperative Research Centre (ZNE Ag CRC) conducts large-scale, long-term research to accelerate the development and implementation of emissions reductions solutions on Australian farms.

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.1

Similarly, enabled by the Nature Repair Act 2023, the Nature Repair Market allows landholders, including farmers, to voluntarily undertake projects that improve biodiversity, for example, by replanting native forest and woodland ecosystems.2 Eligible projects receive a biodiversity certificate that can be retained or sold to buyers who wish to support biodiversity. Buyers and sellers of certificates are connected via the PLANR Marketplace online platform. The Nature Repair Market aligns with the ACCU Scheme allowing projects to earn both a biodiversity certificate and ACCUs where they meet requirements.

Policies encourage access to export markets. This includes helping exporters overcome market access barriers and costs associated with exports registration. Australia has 19 comprehensive regional or bilateral free trade agreements with 31 economies in force.3

Tariff rates on imports of agricultural and food products are low (1.2% on average) and less than half the average tariff rates applied to non-agricultural goods (2.6%) (WTO, ITC and UNCTAD, 2025[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.

The Export Control Act 2020 and associated subordinate legislation ensures that goods exported from Australia meet requirements in importing countries, with the Department of Agriculture, Fisheries and Forestry (DAFF) completing audits and inspections, issuing documents and providing assurance to enable products to be exported. The minimum necessary costs for these regulatory services are recovered from exporters (export cost recovery). The National Agricultural Traceability Strategy (2023‑33), its implementation plan and associated grants aim to enhance Australia’s agricultural traceability systems for biosecurity and food safety, grow market access and protect cultural intellectual property for First Nations products.

Voluntary initiatives, such as the Australian Agricultural Sustainability Framework (AASF) also aim to demonstrate the alignment of Australian agriculture with global sustainability commitments to international markets, seeking to provide a framework to describe the sector’s overall sustainability performance against 19 environmental, social and economic sustainability principles.

Recent policy developments

Domestic policy developments in 2025-26

Food security

A National Food Council was established in November 2025, comprised of experts from across the food system. The Council was set up to advise the development of the forthcoming National Food Security Strategy which is set to provide a long-term, systematic plan to boost the productivity, resilience and security of the Australian food system.

Mitigating agricultural greenhouse gas emissions

The Australian Government released the Agriculture and Land Sector Plan in September 2025. This is one of the six sectoral plans complementing the Net Zero Plan, aiming to guide Australia’s efforts to achieve net zero greenhouse gas emissions by 2050.

The Agriculture and Land Sector Plan builds on the advice provided in the Climate Change Authority’s Sector Pathways Review from 2024 (Australian Government, 2025[4]). The baseline scenario used in the plan projects that agricultural production will increase by 32% by mid-century compared to today’s levels, while the sector’s emissions will decrease from 86 MtCO₂-e in 2025 to 62 MtCO₂-e in 2050. This is foreseen to be achieved through emissions intensity improvements through adopting emissions reducing technologies and practices. Land based sequestration (mostly through reforestation, but also via soil carbon, savanna fire management, forest regeneration and blue carbon in oceans) is expected to balance the residual emissions that are expected to remain under the baseline scenario from agriculture and other sectors of the economy so Australia can achieve net zero by 2050.

The plan sets out four areas of actions, which group together previous and ongoing efforts towards reducing agricultural greenhouse gas emissions and growing carbon stores in the land. These include:

• understanding national and farm level emissions

• investment in innovation for the delivery of commercially viable abatement options

• strengthening on-ground action

• enhancing the land sector’s role achieving net zero.

Under the Improving Consistency of On-farm Emissions Estimates grant programme, AUD 6.4 million (USD 4.1 million) is provided to facilitate the consistent adoption and incorporation of the voluntary emissions estimates and reporting guidelines by third-party GHG calculators. Climate change adaptation in the agricultural sector

Released in September 2025, Australia’s first National Climate Risk Assessment analysed the exposure and vulnerability of Australian agriculture to relevant climate hazards and projected potential impacts based on different waring levels. Key risks highlighted for agriculture include declines in productivity and increasing biosecurity threats, leading to social and economic impacts for farming communities. Built on the assessment, the National Adaptation Plan was published in September 2025. It outlines the overall vision for adaptation in Australia and clarifies the role of different actors for adaptation. The plan highlights that despite ongoing adaptation action, existing measures are unlikely to be sufficient given the scale of future projected climate impacts and calls for governments across jurisdictions to continue reviewing and amending the scope and scale of climate change adaptation. Key priorities set include further investment in technological innovation, research and development, improving water use and efficiency, addressing skills shortages in the production chains, diversifying crops and implementing new technologies and farming techniques. The plan also calls for capitalising on opportunities in cases where climate change may increase Australia’s productivity compared to other regions.

Biodiversity and biosecurity efforts

The Biodiversity Assessment Instrument (BAI) came into effect in 2025, setting out legally the technical requirements on how Nature Repair Market methods need to assess biodiversity outcomes. Supported by the BAI, the method specifications for the “Replanting native forest and woodland ecosystems method” were also released in 2025, outlining the legal requirements biodiversity projects seeking to enter the Nature Repair Market need to abide by to earn certificates that can be sold to investors, if they aim to revegetate Australia’s historically cleared areas and replant native vegetation.

Efforts combatting feral animals, pests and weeds received AUD 11 million (USD 7.1 million) in funding in 2025-26, helping to implement the Australian Pest Animal Strategy 2017-27, and the Australian Weeds Strategy 2017-27, by continuing national coordination efforts to manage priority pests; biocontrol research; joint strategic on-ground projects between the federal government and Australia’s subnational states and territories and Indigenous-led pest and weed management in Northern Australia.

Financial support, counselling and disaster recovery assistance to farmers

Producer loans were allocated an additional AUD 1 billion (USD 0.6 billion) of funding over three years from 2026-27 through the Regional Investment Corporation (RIC), and AUD 19.7 million (USD 12.7 million) across several years was allocated to DAFF for programme delivery and to the RIC to support its operations. This was complemented with the introduction of the Drought Hardship Loan, a new RIC loan product seeking to help farmers finance short-term operating costs during droughts lasting at least 24 months. Eligible farmers can borrow up to AUD 250 000 (USD 161 082) for a loan duration of five years, with repayments deferred during the first two years. Interest rates on existing RIC loans were capped at 5.18% until 31 July 2026.

The Rural Financial Counselling Service Program received an additional AUD 2 million (USD 1.3 million) to boost service delivery amidst drought and natural disasters, providing free and independent financial counselling for farmers experiencing hardship.

Disaster recovery assistance was provided via the Disaster Recovery Funding Arrangements for producers in Queensland and New South Wales, following floods and severe weather, respectively. Farmers in these states could apply for grants to fund clean-up, infrastructure repair, restocking and replanting. In Queensland, this was funded through an AUD 100 million (USD 64.4 million) package, while AUD 242 million (USD 155.9 million) was provided in New South Wales (Australian Government, 2025[5]) (NSW Rural Assistance Authority, 2025[6]). In addition, AUD 20 million (USD 12.9 million) was provided for pest control measures in Queensland in the aftermath of the flood (Australian Government, 2025[7]).

Competition policy

The Food and Grocery Code of Conduct became mandatory in April 2025, applying to retailers and wholesalers earning over AUD 5 billion (USD 3.2 billion) from their grocery business operations in the preceding financial year. The code of conduct, which was previously voluntary, now requires retailers to have written supply agreements in place and ensure suppliers do not face retribution if exercising their rights. Businesses contravening the code may face penalties, with the Australian Competition and Consumer Commission (ACCC) responsible for enforcement. Fresh produce industry associations received AUD 2.9 million (USD 1.9 million) to provide targeted education programmes and ensure suppliers can understand and enforce their rights under the code.

Announced in December 2025, a new mandatory code of conduct will also apply for wine grape purchases from January 2027. The code will apply to wine makers (who exceed a certain purchasing quantity) in their dealings with wine grape growers. This aims to enhance certainty on price deductions and dispute resolutions, as well as provide financial information to facilitate growers’ business operations.

Farm safety

To enhance health, safety and well-being outcomes on Australian farms, the Australian Government provided AUD 2.5 million through the National Farm Safety Education Fund over three years from 2025‑26 to Farmsafe Australia.

Trade policy developments in 2025-26

The Australia and United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) entered into force in October 2025. Once fully implemented in 2029, the CEPA will eliminate tariffs on over 99% of Australia’s goods exports to the UAE, including frozen red meat and oil seeds (DFAT, n.d.[8]).

In March 2026, Australia and the European Union reached a free trade agreement after nearly eight years of discussions. The EU has been the destination of over AUD 4.4 billion (USD 2.8 billion) worth of Australian agriculture, forestry and fisheries exports in the 2024-25 financial year. Once it enters into force the draft free trade agreement will increase preferential access rates for several Australian commodities, including beef and sheep meat, and eliminate EU tariffs on 92.8% of agricultural products, including most dairy and rice products, tree nuts, horticulture, honey, grains and processed foods (Australian Government, 2026[9]).

Australia continues negotiations for a Comprehensive Economic Cooperation Agreement with India, which has been the destination of AUD 3 billion (USD 1.9 billion) worth of Australian agriculture, forestry and fisheries exports in the 2024-25 financial year. This would replace the interim Australia-India Economic Cooperation and Trade Agreement that entered into force in 2022.

Several Australian agricultural products gained improved conditions for accessing certain markets internationally thanks to successful technical market access negotiations achieving various outcomes (e.g. reduced phytosanitary and sanitary requirements or the mutual recognition of organics systems). This included improved market access conditions for Australian apples in Canada and China, and for certain organic products in Japan and India.

To ensure the Department of Agriculture, Fisheries and Forestry (DAFF) can deliver regulatory and non-regulatory export and trade functions for agricultural products, the Australian Government provided AUD 53.3 million (USD 34.3 million) extra funding for 2025-26, including for DAFF’s engagement in multilateral forums and negotiating technical market access services. Further funding of AUD 147.5 million (USD 95 million) over four years from 2025-26 will also be provided for DAFF to sustain export and trade functions, with the funds partially dedicated to reform export regulatory services for agricultural non-prescribed goods4 and organic products.

The livestock sector’s transition to the enhanced National Livestock Identification System (NLIS) was supported with AUD 3.9 million (USD 2.5 million) funding. The NLIS is being updated to meet current and forthcoming biosecurity and market access requirements.

To promote trade and facilitate an internationally competitive agricultural sector, the Australian Government provided AUD 23.8 million (USD 15.3 million) over three years from 2025-26 to sponsor agricultural trade events showcasing Australian agriculture to domestic and international stakeholders.

Policy context

Key economic and agricultural statistics

Australia is the world’s 20^th largest economy in purchasing power parity (PPP) terms and the sixth largest country by land area, accounting for over 12.5% of all agricultural land in the 56 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 4.2). Agriculture represents a small share of the economy, accounting for just 2.4% of GDP and 2.2% of total employment in 2024. Australia has a highly variable climate, which makes agricultural revenues subject to high volatility (ABARES, 2017[10]). Australia is an important producer of agricultural commodities. In 2024, the country ranked as the world’s second-largest producer of barley and wool, the third-largest producer of sheep meat, and is also among the world’s top ten producers of oats, beef, wheat, rapeseed and sugar cane.

After almost three decades of uninterrupted GDP growth, economic growth became negative in 2019. Real GDP growth rebounded to 2% growth in 2020, 4.3% in 2021 and 3.6% in 2022, with a more modest, but positive 1.4% growth in both 2023 and 2024 and 1.8% in 2025. The unemployment rate fell from 6.4% in 2019 to 3.7% in 2022-2023, with a slight increase to 4.3% % in 2025 (Figure 4.3). Inflation decreased to 2.9% % in 2025, after it reached its highest level in more than three decades in 2022 with 6.6%.

Table 4.2. Australia: Contextual indicators

	Australia		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	540	2 034	1.3%	1.2%
Population (million)	19	27	0.4%	0.5%
Land area (thousand km2)	7 682	7 692	9.2%	9.1%
Agricultural area (AA) (thousand ha)	455 516	368 934	15.1%	12.5%
			All countries1
Population density (inhabitants/km2)	2	3	52	64
GDP per capita (USD in PPPs)	28 384	74 778	9 508	31 740
Trade as % of GDP	16.4	17.7	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	3.8	2.4	3.0	3.6
Agriculture share in employment (%)	4.8	2.2	-	-
Agro-food exports (% of total exports)	23.1	13.4	6.4	8.3
Agro-food imports (% of total imports)	4.3	6.2	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	55.3	56.8	62.1	60.4
Livestock in total agricultural production (%)	44.7	43.2	37.9	39.6
Share of arable land in AA (%)	10.6	18.0	33.0	34.0

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 volume of agricultural production is exported, and the country is a major exporter of wheat, barley, cattle, beef, sheep meat, dairy, wool, rapeseed, cotton and pulses. Goods processed for consumption make up 44%, while primary goods for industry make up 38% of the country’s agro-food exports. Approximately two-thirds of Australia’s agro‑food imports cover goods processed for final consumption, while 18% covers processed goods for industry (Figure 4.4).

Over the 2014-23 period, agricultural output grew by 1.5% per year, compared to a 1.8% per year increase globally (Figure 4.5). Total factor productivity (TFP) grew by 0.8% per year, at parity with the global average growth. Primary factor growth was 0.2% per year. Meanwhile, intermediate input use grew at 0.5% per year on average.

Agriculture accounted for 15.6% of Australia’s GHG emissions in 2014-23 and can play an important role in helping the country to achieve its economy-wide target of net-zero emissions by 2050 (Table 4.3). Agriculture’s contribution to GHG emissions has declined over the past two decades but remains above the OECD level by over five percentage points. The share of agriculture in total energy use has increased since 2000 and was above the OECD average in 2024, 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. 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 4.3. Australia: Productivity and environmental indicators

	Australia		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	1.2%	0.8%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	20.6	20.8	32.3	29.0
Phosphorus balance, kg/ha	1.3	1.0	3.3	2.3
Agriculture share of total energy use (%)	2.3	2.9	1.7	2.0
Agriculture share of GHG emissions (%)	18.1	15.6	8.7	10.3
Share of irrigated land in AA (%)	0.5	0.5	-	-
Share of agriculture in water abstractions (%)¹	67.7	67.0	46.1	47.7
Water stress indicator	4.4	3.3	..	..

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 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 4.4). 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 (Nandan and Waldron, 2025[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 4.4. 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 (2017), “Farm performance and climate Climate-adjusted productivity for broadacre cropping farms”, https://daff.ent.sirsidynix.net.au/client/en_AU/search/asset/1027157/0 (accessed on 14 September 2026).

[9] Australian Government (2026), “Australia-European Union Free Trade Agreement Key Outcomes”, https://www.dfat.gov.au/sites/default/files/a-eu-fta-key-outcomes-benefits.pdf (accessed on 13 April 2026).

[4] Australian Government (2025), “Agriculture and Land Sector Plan”, https://www.agriculture.gov.au/sites/default/files/documents/agriculture-and-land-sector-plan.pdf (accessed on 9 March 2026).

[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).

[7] Australian Government (2025), “Joint media release: $20 million investment in pest control and biosecurity in flood aftermath”, https://minister.agriculture.gov.au/collins/media-release/joint-media-release-biosecurity-flood-queensland (accessed on 14 April 2026).

[5] Australian Government (2025), Joint media release: Disaster assistance grants available for flooded north Queensland primary producers, small businesses and not for profit organisations, https://minister.agriculture.gov.au/collins/media-releases/joint-media-release-disaster-assistance-grants-available-flooded-north-queensland-primary-producers-small-businesses-and-not-profit-organisations (accessed on 14 April 2026).

[12] 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).

[13] DFAT (2026), Australia’s free trade agreements (FTAs), https://www.dfat.gov.au/trade/agreements/trade-agreements (accessed on 4 March 2026).

[8] DFAT (n.d.), Australia-UAE Comprehensive Economic Partnership Agreement (CEPA), https://www.dfat.gov.au/trade/agreements/in-force/australia-uae-comprehensive-economic-partnership-agreement-cepa (accessed on 20 March 2026).

[11] Nandan, G. and S. Waldron (2025), “The road to reform: how a developed country can repurpose agricultural support”, ABARES Insights, Issue 6, Canberra, https://daff.ent.sirsidynix.net.au/client/en_AU/search/asset/1037561/0 (accessed on 8 September 2026).

[6] NSW Rural Assistance Authority (2025), “Program Guidelines Special Disaster Relief Grant: AGRN 1212 - NSW East Coast Severe Weather from 18 May 2025”, https://www.raa.nsw.gov.au/__data/assets/pdf_file/0016/1622212/Program-Guidelines-Special-Disaster-Relief-Grant-AGRN-1212-Version-1.2-23-July-2025.pdf (accessed on 14 April 2026).

[1] RIC (n.d.), Loan funding available, https://www.ric.gov.au/ (accessed on 25 March 2026).

[3] WTO, ITC and UNCTAD (2025), “World Tariff Profiles 2025”, https://www.wto.org/english/res_e/booksp_e/world_tariff_profiles25_e.pdf (accessed on 4 March 2026).

Notes

← 1.  By June 2025, 168 million ACCU credits had been generated under the Scheme, each representing 1 tonne of carbon dioxide equivalent of abatement. Sixty-five per cent of these were from methods related to vegetation (mainly reforestation), savanna burning and agriculture (Australian Government, 2025[4]). Enabling the crediting of carbon stored, a new integrated farm and land management method is under development (DCCEEW, 2025[12])

← 2.  Landholders can use the Platform for Land and Nature Repair (PLANR) to plan and cost potential nature repair projects with a geospatial tool.

← 3.  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), the Australia–United Kingdom Free Trade Agreement (A-UKFTA 2023) and the Australia–United Arab Emirates Comprehensive Economic Partnership Agreement (2025) (DFAT, 2026[13]).

← 4.  Goods with no mandatory export conditions under Australian export laws.