Babe

I'm glad this wasn't my question, because I would have answered "England."

I haven't seen the film, or read the book; but Dick King–Smith (who wrote the book) was English – born between Bristol and Bath, in 1922, and died in Bath in 2011 – and in the absence of any definitively contradictory evidence I think it's fair to assume that it was set in his own country.

For the purposes of research I watched "Official Trailer #1" on YouTube, and virtually every accent I heard was American. The pig itself is certainly American; and so are most of the sheep. The few words spoken in the trailer by Farmer Hoggett (it sounds like "gerrem up, pig") sound like Yorkshire, or Northumberland, if anything; but James Cromwell, the actor who played the part, was born in Los Angeles and is definitely American.

Maybe the question setter meant to ask what country Babe was filmed in; this was definitely Australia. But does anyone have any evidence to suggest that it was set there?