Farmers are the most pessimistic in over two years because of government policies and global economic uncertainty, according to a private survey.
The negative sentiment extended to Western Australia, even though the West is expecting a bumper grain harvest, in contast to tough conditions on most of the east coast.
The quarterly Rabobank Rural Confidence Survey found that more farmers are expecting conditions to worsen rather than improve over the next year.
The survey found that 35 per cent of farmers expected conditions to worsen in the coming year, compared to 12 per cent in the prior quarter.
Rabobank's Rural Australia general manager, Peter Knoblanche, said the fall in farmer confidence appeared to be influenced by factors outside the farm gate.
"Global market volatility and concerns about public policy issues were shown to have had the main dampening effect on farmer confidence this quarter," Mr Knoblanche said in a statement.
Nearly half of the farmers expecting conditions to worsen over the next year had nominated government interventionist policies as a major factor.
Farmers were concerned about the federal government's proposed carbon tax, the suspension of live cattle exports to Indonesia and the effect of mining and coal seam gas exploration on agriculture.
Eighteen per cent of farmers expected the agricultural economy to improve, compared to 42 per cent in the prior quarter.
Forty-two per cent expected conditions to stay the same.
Fifty-two per cent of all farmers surveyed believed coal seam gas exploration to be a threat to agriculture.
Seven per cent believed coal seam gas exploration to be an opportunity while 40 per cent were undecided.
Fifty-two per cent of those farmers who expected conditions to improve over the next year cited rising commodity prices as the main influence, and 46 per cent cited favourable seasonal conditions.
Mr Knoblanche said seasonal conditions were generally good or average across Australia.
There has been sufficient rain to maintain winter crops and pasture growth, although average spring rainfall would be needed to guarantee a decent harvest.
According to the survey, farmer sentiment had weakened in all states, with Queensland farmers the least confident and Tasmanian farmers the most confident.
Rabobank's state manager for Western Australia Crawford Taylor said the fall in farmer confidence occurred despite the state receiving rainfall across most of the wheatbelt.
“At a general level, it is fair to say that the season has progressed well in nearly all parts of the state’s agricultural regions with finishing rains now the key for a successful season,” he said.
“The far eastern wheatbelt is the only major concern with drier conditions. The central wheatbelt, on the other hand, is looking in good shape and with moisture at depth.
“On the production side, the latest August GIWA Crop forecast of 12.2 mmt total crop points to a successful season in the making with further upside with a favourable finish and minimal frost.”
The survey questioned about 1,200 farmers throughout Australia.
