March 24, 2023

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Australian farmers have cautioned the country about the repercussions its conflict with China shall have. The trade dispute with China and supply chain disruptions caused by the pandemic will cost the industry $28bn over the next decade.

The National Farmer’s Federation (NFF), Australia’s main national lobby group for farmers appealed to the government to invest A$3.5bn. This investment would support a trade strategy aimed at diversifying the nation’s export markets and improving supply chains.

The industry’s goal of boosting the annual value of farm production to A$100bn by 2030 would be severely challenged by trade disruptions. This challenge can be offset if more support is afforded by Canberra.

With deteriorating China-Australia trade relations, Beijing has targeted Australia’s farm sector over the past 18 months. Beijing has applied trade sanctions on barley, seafood, wine, and other exports. The bilateral ties have sunk to their lowest level in a generation.

What aggravated relations between the two countries was Canberra’s call for an international probe into the origins of Covid-19. While resisting Beijing’s more aggressive foreign policy.

The worsening bilateral ties have forced producers to seek other markets. This is also threatening to ruin industry plans to develop Australia into the food bowl of Asia after soaring Chinese demand.

Tony Mahar, chief executive of the NFF noted that the recent disruptions between the two countries would cost the industry A$36.9bn this decade. He further added considerations that would help counter these headwinds. This included a long-term trade strategy that deepened existing markets, diversified export destinations, improved supply chains, and built domestic value-adding capabilities.

NFF has proposed to Canberra a shopping list of financial support for the next four years, including A$1bn for trade-related activities. Trade-related activities such as improving export supply chains, raising market development activities, and increasing government resources would improve agricultural market access.

Many of the agricultural sectors worst hit by Beijing’s trade sanctions are now trying to diversify away from China.

Bruce Tyrrell, an Australian vintner went on to narrate that the anti-dumping tariffs imposed by Beijing had effectively closed the Chinese market. He said that since China was Australia’s biggest and most profitable market, it has, therefore, been a big hit. What helped him was developing existing and new markets as a precautionary measure as soon as anti-dumping inquiry began.

Some farm sectors have been very lucky in finding alternative markets for produce previously intended for China. For instance at the start of this year, CBH, a grain producer, successfully exported its first cargo of malt barley to Mexico. It is now reopening a Saudi Arabian market for feed barley.

While some farmers are doing well, the loss of the Chinese market, nonetheless, remains a big worry for the farm sector.

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