Grain Central

PARTS of the grains and oilseeds sector, along with value-added industries including ethanol and wheat gluten, are set to benefit from the Australia–European Union free trade agreement signed yesterday.

However, the rice industry has called out the deal as not delivering any commercially meaningful market access for the commodity.

Australian growers may also benefit from lower-cost machinery and agricultural chemicals, with tariffs reduced to zero on EU imports.

The agreement brings to a close eight years of bilateral negotiations, with agricultural commodities long a sticking point for both sides.

Under the FTA, tariffs will be reduced on a range of grain exports to the EU as follows:

• tariffs on wheat and meslin of up to $166/tonne (€95/t) eliminated over five years, and elimination of potential tariffs on durum of up to $259/t (€148/t) when EU prices are low;
• tariffs on barley of $163/t (€93/t) eliminated over five years;
• tariffs on wheat starch of up to $392/t (€224/t) eliminated over five years; and,
• for wheat gluten, immediate access to an annual duty-free tariff-rate quota (TRQ) of 20,000t, worth up to $70 million per annum.

Australian growers will also have access to an annual duty-free TRQ of 800t for sweet corn.

Revealed yesterday, canola oil will see tariff rates drop from 5.1-9.6 percent to zero when the agreement comes into force to match the zero tariff already in place on canola seed.

GPA underwhelmed

Despite the potential for growth in niche EU markets like durum, gluten and ethanol as well as the elimination of tariffs on canola products, Grain Producers Australia is lukewarm about the possibilities the FTA could bring for the grains industry.

GPA chair and Western Australian grower Barry Large said while the phased removal of tariffs on selected grain types is a positive step, it does not change the way the EU participates in global grain markets.

“It’s been concerning in recent years to see major trading partners, such as the US, seeking to apply tariffs to Australian agricultural products, so it is positive to see agreements progressing with other partners,” Mr Large said.

“But when it comes to grains, the EU is not a consistent market for Australian growers.

“It tends to enter the international market, including sourcing from Australia, on an opportunistic basis when its own production falls short.”

Mr Large said this meant the agreement should be viewed in context.

“While tariff reductions are welcome, they don’t change the fact the EU only buys grain when it needs to.

“This agreement doesn’t open up a new or expanding market for Australian producers.”

GPA will be seeking further detail from the Federal Government to understand how the agreement will operate in practice, and whether there are any clear benefits that flow back to growers.

“The devil will be in the detail and we’re looking for a clear picture from government on what this means at the farm gate.”

The climate and sustainability provisions within the agreement remain an area of focus, particularly in terms of how they may apply to Australian production systems.

“Grain growers are already managing a complex mix of seasonal, market and input cost pressures, so it’s important we understand whether any additional requirements create further imposts at the farm level.”

GPA noted there may be some broader benefits across grain-fed supply chains and value-added exports, but said these will need to be clearly demonstrated.

“We’re keen to understand whether there are flow-on effects through the supply chain that return value to producers, but at this stage the direct benefits for growers are limited.”

Rice industry disappointed

Peter Herrmann.

Australian rice has historically had access to the EU limited to small volumes through country-allocated shares of two World Trade Organization TRQs on semi-milled/wholly milled rice of 240t post-Brexit, down from 1019t pre-Brexit, and broken rice, now at 14,993t post-Brexit, down from 16,000t pre-Brexit.

The A-EU FTA outcomes on EU rice include:

• tariffs on paddy rice of up to $369/t (€211/t) eliminated over three years;
• tariffs on husked, or brown, rice of up to $74/t (€42.50/t) eliminated over three years;
• tariffs on broken rice of up to $114/t (€65/t) eliminated over three years;
• tariffs on processed rice products of up to $410/t (€234/t) eliminated over three years; and,
• for semi-milled/milled rice, a duty-free quota of 5000t at enforcement, rising to 8500t over five years, worth up to $18M per annum at full implementation.

The EU’s factsheets called this access “modest”, saying that this maximum TRQ of 8500t “represents 0.3pc of EU consumption of rice”.

Ricegrowers’ Association president Peter Herrmann said the agreement offered little material improvement compared to the deal rejected in 2023.

He said the EU FTA represented an opportunity to provide Australian rice growers with greater certainty and diversification at a time when the industry was already facing compounding pressures.

He said the absence of meaningful access under this deal undermines confidence, investment and long‑term viability across Australian rice‑growing regions.

“How many more disappointments does the government expect the rice industry to absorb?” Mr Herrmann asked.

SunRice Group chief executive officer and managing director Paul Serra said industry after years of negotiation, it was reasonable for growers to expect outcomes that matched the government’s stated commitment to agriculture and regional Australia.

“We are incredibly disappointed by…[the] EU FTA announcement, which has delivered a very poor outcome for Australian rice growers, who are already facing mounting pressures from water buybacks and continued dry conditions in southern New South Wales,” Mr Serra said.

“The government’s failure to deliver meaningful EU market access for Australian rice is a significant shortfall in the FTA”.

Bioenergy potential

The FTA could provide opportunities for Australia’s bioenergy industry, where wheat byproducts are used as a feedstock.

Globally, Australia exported $133.8M worth of ethanol in 2025, including $1.6M to the EU.

The agreement will provide access to an annual duty-free TRQ into the EU market of 10,000t of ethanol.

The Manildra Group is Australia’s largest producer of ethanol, as well as the nation’s biggest wheat-gluten exporter.

The company could benefit from this expanded duty-free access for ethanol, as well as improved access to the EU gluten market.

Manildra Group managing director John Honan said as a major global market, the EU represented a “significant opportunity for market diversification”.

“An Australia–EU FTA would unlock a market that has not been accessible to Manildra Group in our 75-year history,” Mr Honan said.

“We welcome the reduction in trade barriers and look forward to strengthening exports of Australian-made value-added products to Europe.”

The sentiment was not shared by EU ethanol companies with one sector organisation, ePURE, calling the agreement a “gut-punch” to the industry.

ePure commented that while the TRQ was modest, it was significant compared to the negligible trade flows in recent years “amounting to only 177t in 2024 and virtually no trade recorded in most previous years”.

“Granting a quota far exceeding existing trade volumes raises concerns that the agreement is designed to stimulate new imports rather than reflect established market demand, adding further pressure on EU producers,” ePure said in a statement.

Ag machinery, chemicals

The Australian Government’s Department of Foreign Affairs and Trade factsheet have referenced lower tariffs on machinery and chemicals imported from the EU.

“Reducing the cost of agricultural inputs sourced from the EU, for example, by removing Australia’s tariffs on tractors, pesticides, and farm machinery,” the document said.

EU information said tariffs on machinery imports, currently up to 5pc, and on chemicals, also up to 5pc, would be eliminated.

Australia is already a sizeable market for EU-made farm machinery, which is not understood to be subject to a tariff.

Published Date: March 25, 2026