NSW Farmers is warning state and federal governments must urgently respond to an acute cost-of-production shock with new data showing spikes in fuel and fertiliser prices caused by global shortages have slashed confidence.
The latest NSW Farmers Farm Business Sentiment Survey reveals 80 per cent price increases for fuel and fertiliser have flowed through to freight (up 60 per cent), farm chemicals (up 40 per cent) and labour (up 25 per cent).
The survey also showed confidence about the year ahead had collapsed, with 80 per cent of farmers expecting business conditions to worsen over the next 12 months.
NSW Farmers President Xavier Martin said farmers were already changing decisions that underpinned the production of food and fibre.
"We were expecting a drop in conditions and confidence, but this is a stark warning to governments that food security, and the economic value of farm production, is taking an absolute beating," Mr Martin said.
"This data confirms the multitude of anecdotal reports that things are tough for farm businesses, and that should be a wake-up call for the nation."
Survey respondents reported they were scaling back or decreasing the intensity of production by 22 per cent, while 36 per cent were changing cropping and stocking plans.
Mr Martin said governments must act quickly with practical, targeted measures that reduced the extraordinary costs faced by farming businesses to avoid even worse planting and stocking decisions over coming months.
"To stabilise production and protect regional jobs, we need immediate relief that lowers on-farm and supply-chain costs, and finance settings that help farm businesses maintain liquidity and keep operating through this period of uncertainty," he said.
NSW Farmers proposed time-limited tax relief to directly reduce extraordinary cost pressures and support investment in on-farm storage and efficiency, including relief from payroll tax, insurance-related taxes and council rate increases where feasible, as well as waiving tolls and heavy vehicle charges and registration fees to ease freight costs. NSW Farmers also urged the Commonwealth to increase and expand the instant asset write-off settings beyond June 2026 to support storage investment and adoption of fuel and fertiliser efficiency technology.
Over the medium term, NSW Farmers called for expanded access to low or zero-interest finance and underwriting settings so farmers could refinance, maintain working capital, and proceed with cropping and stocking plans. This included new Rural Assistance Authority loan products to support efficiency and storage technology, faster access to relevant RIC loan products, and underwriting of existing farm insurance with exploration of underwriting options for new products, including crop, stock and weather cover.
