WA industry leaders welcome FTA news

27 Nov, 2014 01:00 AM

WITH the Free Trade Agreement between China and Australia now signed, hopes are high that benefits will flow back to producers. Farm Weekly journalists JACINTA BOLSENBROEK and RACHAEL ANDREWS spoke to representatives of WA's agricultural sector to gauge their expectations on how WA growers might benefit from the deal.

A WAFarmers Meat Council president and Sheepmeat Council of Australia president JEFF MURRAY

JEFF Murray believes the deal brings many positives for the industry, but warns diversity in our exports is important to maintain.

"I think it will certainly bring a lot of positives for agriculture and in particular the meat industry, but there will be a lot of work to do with Chinese industries to gain a market share," he said.

Mr Murray said interest in "lower priced cuts" such as fillets and breasts for China had been increasing and he expected this to continue, allowing exporters to get better value from selling meat from all parts of the animal.

The concern Mr Murray has with the FTA lies with Australia "putting all of its eggs in one basket".

"I think probably the most important thing for us to learn from what is happening with wool is that the industry needs to maintain diversity," he said.

"I'm pushing very hard to keep our diversity in meat exports."

Mr Murray said maintaining diversity would ensure appropriate prices for our products, rather than a market dominated by China that would see prices drop to the benefit of the importing country.

WAFarmers Wool Council president ED ROGISTER

WITH China already buying up to 80 per cent of Australia's wool at prices well below what producers deserve, Ed Rogister doesn't expect the situation to change following Australia and China signing a Free Trade Agreement (FTA).

"The wool market is basically polarised by China... I don't think they're about to change what they're paying," he said.

"Unfortunately there's not a great incentive at the present time to produce wool because producers aren't getting enough for the commodity.

"Our costs are increasing every year, but the price to us is decreasing in real terms."

While he was critical of any short term gains for the wool industry, Mr Rogister said he expected there were long-term benefits for those farming sheep, especially in terms of meat.

WAFarmers Dairy Council president PHIL DEPIAZZI

WAFarmers Dairy Council president Phil Depiazzi has welcomed the announcement of the China-Australia Free Trade Agreement (FTA) which does away with tariffs on dairy exports.

The abolishing of these tariffs is set to save the Australian dairy industry at least $31.5 million annually and bring Australia into direct competition with New Zealand which has had an FTA with China since 2008.

Mr Depiazzi said the levelling of the playing field would allow Australian dairy products to feature well in the market for a country that is struggling to feed its burgeoning population.

"The Dairy Council has worked closely with Australian Dairy Farmers as part of a campaign to secure a great deal for dairy, which included meeting with local politicians to discuss the benefits to WA of a FTA which promotes growth within the industry," he said.

"The dairy industry has been the leading commodity in these negotiations and has lobbied strongly for an outcome placing dairy in a competitive position comparative to New Zealand.

"This is a great example of the whole of industry, including ADF, Dairy Australia, Australian Dairy Industry Council and State Farm Organisations, working together and with government to achieve positive outcomes."

Harvey Fresh general manager PAUL LORIMER

CONFIDENCE will be injected into the dairy industry as growers and processors see a strong and long-term future for their products following the signing of a Free Trade Agreement between Australia and China.

WA's Harvey Fresh will be continuing to "aggressively" pursue export growth and opportunities as the FTA gives Australia a competitive advantage in the market.

This is according to Harvey Fresh general manager Paul Lorimer who has welcomed the FTA, outlining that benefits would be seen long term.

"Benefits will take some time to flow through but the confidence that it brings to the industry will be important," he said.

"We've been advocating for a while that we do need industry growth and this is another signal that there is great opportunity to grow our milk supply and dairy products for domestic and export purposes.

"We see it as very good news for the long term, but on a short term basis it's going to provide a lot of confidence and a lot of opportunities for growth within the industry."

Beef Council chairman and lotfeeder IVAN ROGERS

ACCORDING to producer and WA Beef Council chair Ivan Rogers the recent signing of a free trade arrangement with China has significant positives for the Australian economy as a whole and the livestock production sectors in particular.

He believes the beef and lamb production chains will see significant benefit as tariffs are would down over the next 8-10 years.

Beef products attract a variety of tariffs ranging from 12-25 per cent and skins hides and leather attract tariffs between 5 and 14pc.

The elimination of these tariffs out to 2030 will add an estimated $3.3b to the Australian beef sector.

Mr Rogers said Australian producers had developed production systems around free markets and limited subsidisation over many years.

"This had been to our disadvantage at some times due to significant tariffs being imposed by importing countries," he said.

"Australian producers will enjoy the removal of these tariffs and the staged move toward freer global trade.

"The Chinese FTA will add to the portfolio of agreements with other importing countries including Japan, Korea, Thailand, USA, Indonesia, Vietnam and Cambodia.

"The Chinese FTA should be viewed in context of a significant global move toward free trade that will favour exporting countries such as Australia."

Craig Moystn Group chief executive DAVID LOCK

LAST week's Free Trade Agreement with China saw many winners, however Craig Mostyn Group CEO David Lock said he does not expect to see any changes for the pork industry in the short term.

Mr Lock said the FTA will reduce the tariff on pork to zero over four years, however, there are no protocols between Australia and China for export of Australian pork.

"There are also no accredited establishments or processors," Mr Lock said.

"It is expected that the protocols and accreditation process will take years."

Mr Lock said the APL estimate is between five and 10 years.

"Therefore we do not expect to see any benefits from the FTA in the short term," Mr Lock said.

"We will, however, be expecting the Australian government to do whatever it can to expedite the process."


TONY Seabrook said while the Free Trade Agreement with China was positive news for WA producers, at the end of the day it's about protocols.

"There is a lot of optimism from WA, but there is also some caution as we have heard this before," Mr Seabrook said.

"I think most WA producers want to see the money before they invest capital."

Mr Seabrook said he hopes the FTA will meet the expectations, among all the WA agricultural industries.

"If I knew of some Chinese company investing, everyone would jump at it," Mr Seabrook said.

"Let's not have too much hype. We will wait and see.

"Of course it has created some optimism, but let's not get carried away too early."

South East Asian Livestock Services (SEALS) manager DEAN RYAN

THE nuts and bolts still need to be put together before WA producers can see long term benefits of the Free Trade Agreement with China, according to Dean Ryan.

"It is wonderful news in the long term, but there has been some hype (around it)," Mr Ryan said.

"We still need to work out the protocols and sort out the nuts and bolts of it all before we can put cattle on ships."

Mr Ryan said while it was positive news and a step in the right direction, there will need to be a few more stages yet until WA producers feel confident to start building there cattle numbers to meet such a predicted demand.

In the short term, Mr Ryan said WA producers are fortunate enough to have the benefit of good prices.

"The prices in WA are good, perhaps the best I have seen in decades, or more," Mr Ryan said.

"It is encouraging to see these prices and new markets opening; it gets to a point of when will it stop, but for now WA producers are enjoying the positive news."



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