"There seems to be a fear factor at play here," said Federated Farmers vice-president Andrew Hoggard.
"Farmers are feeling very uncertain about what the coalition government will do next on key issues such as water regulations, climate change and industrial relations."
Still, Hoggard noted that pessimism about the economic outlook is a sour note among the otherwise generally positive indicators in the latest survey, with farmer optimism increasing in all areas except their continuing negative perceptions of the economy.
"We should take heart that perceptions of farm profitability, production and spending have become more positive, and that farm debt levels have dropped slightly since the January survey," he said.
Expectations for farm profitability over the next 12 months are up slightly, with 30 per cent anticipating an improvement and 48 per cent expecting profits to remain stable.
Dairy and arable farmers are noticeably more optimistic about profitability than they were in the January survey.
However, meat and wool farmers are noticeably less optimistic, perhaps reflecting a concern that the past season's excellent farmgate prices might not be sustained this season, he said.
In a ranking of their greatest concerns, regulation and compliance costs remains the top issue, and the survey noted heightened concern about pests, diseases and biosecurity, thought to be driven by the stress and uncertainty caused by the campaign to eradicate the cattle disease Mycoplasma bovis.
Climate change policy and the emissions trading scheme was the third biggest concern, reflecting farmer uncertainty over the government's more ambitious approach to reducing greenhouse gas emissions, and concern that agriculture biological emissions may be included in the ETS even though there are - as yet - no significant mitigating actions farmers can put in place, Hoggard said.
The July online survey received 1113 responses from farmers in four industry groups over 24 provinces.
