There is probably no issue in Australian agriculture more likely to pitch crop producers against livestock producers than the question of whether or not Australia should adopt mandatory biofuel targets. And somewhat surprisingly, when it comes to politics the positions of the major parties on this issue are the opposite of what might be expected. The Coalition - the parties which philosophically favour small government and deregulation - support mandatory biofuel targets, while the ALP - often painted as the party in favour of bigger government and regulation - oppose mandatory targets.

In the latest Farm Institute Insights newsletter, Resources Minister Martin Ferguson argues against biofuel mandates, stating

Mandates ... by their very nature, distort existing transport fuel market outcomes, reduce consumer choice and result in higher fuel charges for consumers. Investment signals arising as a result of a biofuels mandate focus development on meeting the mandate rather than on innovation. Indeed by removing competition and the incentive to innovate, mandates set the bar too low. And of course, a mandate for biofuels could also distort Australia’s land use – potentially impacting on food production.

Leader of the National Party, Warren Truss, argues the opposite case, putting the view that in the absence of some certainty, a viable biofuel industry will never develop in Australia. He argues;

The biofuel industry has enormous potential for Australia. The policy settings in this country have been so inconsistent over the last decade that the industry needs a massive boost in certainty and confidence to attract necessary investment to achieve that potential. It will now require the security of a mandate to set the course for the future. 

Bringing together issues such as food security, the environment, energy policy and rural and regional development, and pitching Australian livestock producers and grain producers in opposition to each other, Australia biofuel policy seems certain to remain a matter of contention for some considerable time.