As Australian agriculture looks to 2025, several key issues are poised to shape the industry, from environmental regulations to political challenges and the evolving global market. Here are five major factors to watch:
- The Australian Federal Election
The uncertainty surrounding the 2025 federal election is a primary concern for Australian farmers. Major policy decisions, including potential changes to superannuation tax and the regional migration review, are under scrutiny. Farmers are particularly concerned about proposed legislation to increase tax on superannuation balances over $3 million, which could impact family farms held in self-managed super funds. The National Farmers Federation (NFF) has expressed caution, as these issues could have significant financial implications for the sector. Additionally, regional priorities such as housing, telecommunications, and biosecurity funding remain central to agricultural policy discussions. - Impact of the US Election on Agricultural Inputs
The 2024 US election could have ripple effects on Australian agriculture, particularly regarding the cost and availability of agricultural chemicals. GrainGrowers, for instance, is concerned about the potential influence of figures like Robert F. Kennedy Jr., who has advocated for banning certain agricultural chemicals like paraquat and diquat. These herbicides are widely used in Australian grain farming, and any regulatory changes in the US could affect their use here. Meanwhile, Australia’s beef industry stands to benefit from global market dynamics, particularly given the US’s shrinking cattle herd, which could boost demand for Australian beef. - Climate and Environmental Regulations
Several environmental regulations are on the horizon, including the EU deforestation regulation and Australia’s proposed “nature positive” legislation. These could affect agricultural practices and trade, especially in relation to sustainability and emissions reporting. The NFF has expressed opposition to mandatory scope 3 emissions reporting, which would require farmers to account for emissions throughout the supply chain. Smaller farmers, in particular, may struggle with the costs and logistics of compliance. However, there are opportunities for farmers to profit from renewable energy developments, with projections suggesting that farmers could earn $1 billion from clean energy rents by 2030. - Rising Cost of Production
Input costs and the availability of key agricultural supplies are growing concerns for Australian farmers. The GrainGrowers 2024 Annual Policy Survey highlighted that the cost of production is a major issue for growers across various sectors. This is particularly true for vegetable, potato, and onion growers, who are facing not only higher input costs but also a shift in consumer behavior due to the cost-of-living crisis. As consumers turn to cheaper imported frozen produce, there is a push to increase the consumption of locally grown vegetables, which could generate significant economic benefits and job creation. - Workforce Shortages
Labor shortages continue to be a significant challenge for Australian agriculture, with nearly half of vegetable growers reporting difficulties in finding workers. Labor costs are a major component of production expenses, sometimes accounting for up to 71% of costs. To address this, industry bodies are advocating for reforms to labor schemes, including the Pacific Australia Labour Mobility scheme and the Horticulture Industry Labour Agreement. Additionally, there is a push for greater investment in farmworker accommodation to attract and retain regional staff.
In conclusion, 2025 is set to be a year of challenges and opportunities for Australian agriculture. Political and regulatory developments, global market shifts, and domestic concerns such as labor shortages and rising production costs will shape the industry’s trajectory. Farmers will need to remain agile, balancing sustainability efforts with economic pressures, while also navigating the complexities of both domestic and international policy.
