The influence of the Nationals has long given the agricultural sector immunity from the Coalition's tough love, free market, open-for-business policies. That's what makes the Shenhua mine decision so striking, writes Simon Cowan.

"Agriculture is at the heart of the Australian identity", or so the Federal Government's Agricultural Competitiveness White Paper assures us.

Certainly agriculture is at the heart of the identity of the National Party. Scanning their news feed shows that stories regarding agriculture and regional infrastructure dominate all other stories by a factor of two to one.

These areas also form a key plank of the Coalition between the Nationals and the Liberals. In exchange for the votes of the National Party's 15 Lower House members and six senators, the Liberals basically adopt wholesale the Nationals policies on the agriculture sector - with their distinctly protectionist bent - and dole out cash for regional infrastructure.

The influence of the Nationals has turned agriculture into the exception to many Liberal policies.

For instance, agriculture is exempt from the Government's tough love for industry. In any other industry facing poor returns, the Government rhetoric would be about the conditions in the enterprise bargaining agreement, or about reducing costs. But the agricultural industry is seen as somehow different.

In no other sector would the first priority of a "competitiveness" review be helping an industry receive a "fairer go". Just in case we missed the blatant protectionist overtones, the White Paper makes it clear the government wants "a fair return at the farm gate for farmers".

By definition, a fair return is what consumers in a free market will pay. What the Government's White Paper wants is not a fairer return but a higher return. They would prefer this to be paid for by the major supermarket chains, but if this proves impossible, the unspoken codicil is that it will be paid for by consumers in the form of higher prices.

Agriculture is also exempt from the Government's "open for business" mantra. When the Government blocked the takeover of GrainCorp by US company Archer Daniels Midland, it was the only such application they had rejected since taking office.

The foreign investment rules are also different for investment in agriculture, with much lower thresholds and much more government intervention. This resistance by some to accepting foreign sources of capital is particularly puzzling, given one of the Government's major initiatives to assist farmers is to extend access to cheap loans to combat drought.

The Government is even persisting with the mirage of a grand agricultural development of northern Australia, after decades of more sober analysis suggesting that the money would be better off spent elsewhere.

Indeed, while they are not the only party due credit (or more accurately blame), the efforts of some in the National Party to exempt their constituency from the small government broom have ensured that primary production received government support (budgetary assistance and tariff protection) of more than $1.5 billion in 2013-14, up from just under $1.3 billion in 2012-13.

This is a worrying trend. Australian agriculture's continued expansion into Asia will not succeed if we shrink behind protectionist walls. The free marketeers in the Liberal party, and those farmers already pursuing increased efficiency and competition, must stand up to the protectionist leanings of some in the National Party.

It is in this context that the decision to green light the Shenhua Watermark Mine is so striking. It is a rare decision of the Abbott Government, and by extension the Liberal Party, that goes against the wishes of the Nationals in the agricultural sector.

There is little doubt it at least goes against the wishes of the Minister for Agriculture, Barnaby Joyce, leading to calls for him to resign from Cabinet over the matter.

For the Nationals, the political threat of not being seen to deliver on farmers' concerns is very real. The recent NSW election saw massive swings away from the Nationals in formerly safe seats like Ballina, Clarence and Lismore on the back of farmer-led fears over coal seam gas.

However, regardless of what you think of the merits of the proposed mine, it has gone through years of review by the state and federal governments, including public consultations and independent groundwater analysis. The fact that the Government has finally made a decision rather than continue to consign projects to death by a thousand cuts is definitely a good thing.

If a company complies with the onerous approvals process and succeeds, then it is wrong to retrospectively change the rules because you don't like the outcome. If the purpose of all this oversight by state, federal and local government is simply to give a power of veto over some projects to protected interests, then we should just make that clear up front and save everyone some time and money.

A good government is a broad church that listens to all the evidence and decides, not one that abdicates responsibility at the first sign of disharmony in the pews.

Simon Cowan is the acting research manager at the Centre for Independent Studies.