What Brexit holds in future for the Australian Farmers?

Looking from the Australian agriculture perspective the Brexit alongside caution has also brought some optimism with it. Being said that, a depreciating pound does no good for either the UK or Australia as both the countries share a long-established and productive trade relationship.

Aussie farmers are looking for a weaker Australian dollar as the recent rise against the US dollar had more to do with interest rates and global economics rather than the commodity prices which would have pushed the Australian dollar lower. It would do farmers good as it would mean lower debt servicing costs and higher commodity prices.An important factor to consider in case of Britain’s exit from European Union is the impact on farmer subsidies under the Common Agriculture Policy.

It is still early to predict the landscape of opportunities as the EU currently accounts for 62% of UK export and 70% of UK import of agri-food products. It should also be noted that the EU is far less reliant on UK with a meager 8% of EU agriculture export. It certainly means that the Brexit might have a greater impact on Britain than the European Union.

As and when the trade agreements become clear between the two, the Australian government can leverage the close tie that it has with the UK to fill the gap that might be left by the reducing EU food supply.

The Australian farmers as it is are dealing with volatility in commodity prices, weather, input costs and much more and the instability coming from such political events adds more to the complexity. The sooner it resolves, the faster the Aussie farmers can operate in a predictable global environment that would allow commodity markets to work to the true forces of demand and supply.

The post What Brexit holds in future for the Australian Farmers? appeared first on ABC Sheds.