Mission to wean world off $850 billion in agricultural subsidies

Some of the world's biggest agricultural players are also among the highest subsidisers.

China provides $430 billion in producer support, followed by the European Union ($144b), the United States ($79b), Japan ($50b), South Korea ($34b) and Indonesia ($31b), according to data from the Organisation for Economic Co-operation and Development.

Australia provides farmers with just $2.3b in support.

Many countries are spending so much on propping up their agriculture industries, that it makes up a significant portion of their GDP. The Philippines spends almost 3 per cent of GDP on agricultural subsidies, followed by Indonesia (2pc), China (1.8pc) and South Korea (1.5pc).

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The Food and Agriculture Organisation estimates that globally, subsidies cost $850 billion a year and would rise to $2.5 trillion by 2030.

Assistant Trade Minister Tim Ayres said since the COVID-19 pandemic, there had been a protectionist and pro-subsidy push that was threatening to undo the open trade routes developed during the past four decades.

"It's very clear to me at the last World Trade Organisation ministerial round that there are countries trying to turn the tide back against agricultural trade liberalisation," Mr Ayres said.

"The direct national interest in leading this fight is getting market access for Australian producers to global markets, because subsidies create unfair competition. But we are going to have to fight hard and advocate hard." Mr Ayres said.

Along with creating a "big market access challenge for Australian farmers", subsidies also exacerbate global food security and carbon emissions because handouts often lead to less efficient production or display production.

Australia plans to use its influence in global organisations, such as the World Trade Organisation, to lobby against nations over aiding their agricultural industries.

"You've got to be there, make the case persuasively and engage with countries who don't agree with us," Mr Ayres said.

"The truth is very little of these farming subsidies make their way back to farmers around the world, it's a pretty inefficient way to help a sector.

"Our job should be arguing for the reallocation of these subsidies to productive endeavours, to incentivising more efficient production, particularly towards agricultural research and development."

Many of the countries heavily subsidising their agricultural industries have significant rural poverty, particularly in farming communities, often fuelled by soil degradation, water salinity and drought.

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Mr Ayres said Australia could help nations ween off agricultural subsidies by offering agricultural research and development as a form of international aid.

"I was in Vietnam a few weeks ago, where there are big salinity issues with rice production," Mr Ayres said.

"You couldn't imagine two more different river systems in the Murray-Darling and the Mekong Delta. But salinity and efficient water use has been a feature affecting both river systems and Australian expertise is being deployed to help them."