Foreign voters to shape Australian farmers future as far right rocks Europe

Around 72 per cent of Australia's total value of agricultural, fisheries and forestry production heads overseas, with the export orientation of each industry varying by commodity type.

Large sectors, like wheat and beef ship out at least 70pc of what is produced, sugar 84pc, mutton and lamb nearly 80pc and rice 90pc, while less export-focused commodities still export significant shares of production, including dairy (40pc) and horticulture (33pc).

Protecting the nation's bottom line is why Trade Minister Don Farrell recently said free and open global trade has never been more important as the impacts of localised geopolitical strife ripples around the world and a growing number of nation's turn inward with protectionist policies.

The gathering political headwinds were borne from the COVID-era and Ukraine conflict, an economic downturn and energy crisis. along with policy concerns within individual countries, and is a big reason why Mr Farrell and Agriculture Minister Murray Watt pushed so hard to get an Australian-EU free trade deal over the line before the EU elections.

But the plug was pulled on the talks late last year with some believing even then that Brussels did not improve the deal, with France vocally against that happening, for Aussie farmers because of how European farmers might perceive the move.

It all came to bear last weekend after counting from four-day polls in 27 EU countries formalised the rise of the far right - which had been consigned to the political fringes since WWII.

The support more stunning than analysts predicted and worse than the Australian government likely feared.

This included humiliating defeats on the bloc's most important leaders in German Chancellor Olaf Scholz and French President Emmanuel Macron, the latter responding with political Russian roulette by dissolving the federal parliament and calling a snap election.

Unlike Western Australian farmers rallying solely against Labor's ban on live sheep by sea exports, years of dissatisfaction over increasing regulation, rising costs, environmental policies and cheap imports bubbled over for European farmers into protracted protests across the continent this year.

Facing a backlash, the more centrist governments wound back proposals, including the scrapping of a plan to halve pesticide use by 2030, and rhetoric for a more conciliatory tone but it was too late as political debate became radicalised and demonstrations violent as far right politicians gathered behind farmers.

There is less of a chance an FTA will now be inked any time soon, particularly now a side deal is being hatched to deliver Europe the critical minerals it wanted from the collapsed two-way deal, while geographical indicators could be reignited as an issue by emboldened European producers.

On the flip side, Australian farmers may ultimately benefit from any winding back of European policies and regulations around decarbonisation, deforestation and de application of chemicals but it is too early to predict.

But post-election analysis claiming the farmer protest movement flexed enough muscle to sway results would have not escaped notice in Canberra.

Meanwhile, across the Channel the UK is heading to the polls on July 4 after Conservative Party Prime Minister Rishi Sunak announced a snap election.

Labour though are heavy favourites and have indicated a willingness to flip the Brexit script and work more closely with the EU than have the Conservatives on potential regulatory landscape changes, including those impacting agriculture, and a preference to prioritise products produced in Europe. It has also flagged a so-called "new deal for farmers" that includes a target where at least half of the food used in prisons, schools and hospitals will be produced in Britain.

Like any two-way deal, improved market access to an otherwise premium and highly protected UK market under the Australian and UK FTA - that came into force a year ago - currently provides Australian farmers more opportunities to provide sustainable, high-quality agricultural produce to British consumers and a strong competitive advantage over other trading partners.

Even across the Ditch, news broke on Tuesday that New Zealand farmers' had won their long fight against proposals to impose a regulated price on methane, carbon dioxide and nitrous oxide emissions from late 2025.

NZ authorities said the ag sector, which argued that the laws if introduced would force producers out of the industry, would be excluded from a national carbon pricing scheme despite producing half the nation's greenhouse gas emissions.

Meanwhile, the world's biggest exercise in democracy was India's general elections that ran from April 19 to June 1 where the incumbent National Democratic Alliance scraped back in despite a significant shift of farmers to the INDIA Bloc which gained a staggering 13pc overall to 42pc of the national vote.

Again, analysts said a large reason for the sharp fall in the ruling party vote was that major farm belts turned its back on the party.

Farmers in India had been protesting in some provinces for 12 months over falling incomes, made more pronounced by export curbs for local food security and cheaper imports.

Traders into India, and the EU, are now said to already be reassessing their playbooks if governments put protectionism and equitable internal agriculture policies into action.

Again, Prime Minister Anthony Albanese, an ardent admirer of Indian PM Narendra Modi, would eye the grassroots coup with a withering eye.

Australia is still very much a small fish in India's massive marketplace, but the potential has government and industry leaders excited after both have thrown much resources at growing trade in seeking pivots away a repeat of the COVID-era supply chain mess and China's bans on a range of Australian commodities.

The shifting ground is a big reason behind Labor's concerted push to increase trade into Southeast Asia, where the government is also in the process of finalising upgrades to an FTA.

Australia's two-way trade with the bloc was worth $178 billion in 2022, accounting for 15 per cent of Australia's exports and greater than its trade with Japan or the United States.

Currently wheat, beef, cotton, barley, malt and live cattle are cornerstones of the marketplace, but a range of pathways are opening for other products, including nectarines, peaches, pulses and avocados.

Mr Watt told ACM-Agri that further diversification into maturing ASEAN economies had the twin benefits of providing food security for the region and helping to insulate Australian farmers from rising challenges, economic downturns and trade disruptions.

"There is an enormous opportunity for us if we grab it. Southeast Asia is obviously one of our closest neighbours as a region, but we often do not appreciate the enormous economic importance it has for Australia as well as the security relationship and other facets," Mr Watt said.

But it has traditionally been a tough nut to crack.

Australian farmers will be wiser as to how international agricultural policies might impact their operations after the dust settles on the India and EU results and the UK results are known in coming weeks.

Then attention will shift to the US and the run up to November's Presidential Elections where well-known protectionist Donald Trump remains favourite to take control of the Oval Office.

When China slapped tariffs on several Australian agricultural commodities four years ago, effectively ending trade, a blindsided agriculture industry and government were forced to grow new food and fibre markets.

This included finalising the A-UKFTA, along with trying to close the EU deal, lowering the eyes to the India and ASEAN economies, along with a spattering of countries that had been consigned to the too-hard basket.

This diplomacy secured 107 new market access points in 2022, worth a potential $5.47b per year, while also reestablishing links with China that has seen all but tariffs on rock lobster lifted.

China also remains Australia's largest single export market, followed by Japan and the US.

After all that has been done and said it appears that Australia's safest and most important two-way trade relationship in the current environment could well remain the notoriously unreliable, shaky and dysfunctional bond it has forged with the globe's most secretive state.