With farmgate produce value peaking at a record breaking $66.3 billion in the 2020-21 season and a lucrative UK market begging for our produce the target of $100 billion of farm produce by 2030 can be met
As long as some seeming restrictions can be overcome, the Australia-UK Free Trade Agreement (FTA) struck in mid-June for our farm produce will ensure our target of $100 billion will be achieved by 2030.
This is the most significant British deal of the post-Brexit era. It focuses on not just the normal agricultural products but also workers.
At the moment we only export around $730 million of farm produce to the UK.
Increasing beef quotas in particular from around 4600 to 35,000 tonnes immediately will be an enormous win. Then rising in equal instalments to 110,000 tonnes in year 10.
In the subsequent five years a safeguard will apply on beef imports exceeding a further volume threshold rising in equal instalments to 170,000 tonnes
While sheep sales to the UK increase straight away from 7788 to 25,000 tonnes, they will rise in equal instalments to 75,000 tonnes in year 10.
In the subsequent five years a safeguard will apply on sheep meat imports exceeding a further volume threshold rising in equal instalments to 125,000 tonnes
Sugar tariffs will be eliminated over eight years. During the transition period, Australia will have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.
Dairy tariffs will be eliminated over five years. During the transition period, Australia will have immediate access to a duty-free quota for cheese of 24,000 tonnes, rising in equal instalments to 48,000 tonnes in year five. Australia will also have immediate access to a duty-free quota for non-cheese dairy of 20,000 tonnes.
These are big numbers, and they’ll continue to ramp up. And while some are saying it’s disappointing to be over a 10-15 year period, most trade agreements actually work along similar timelines.
This is a substantial deal as the UK market left us behind in the 70s, and we found this place called Asia to fill the gap, and they’ve been very good to us. And that continues to be the primary focus as well as the Middle East for a lot of our farm produce.
And while those established markets will continue, it’s now our opportunity to trade with the UK around our more valuable high-end beef and sheep product that makes the deal look so inviting.
This is a major win to have access to the UK market as we were overlooked, about 18 months ago, when the UK gave most of the quota they had previously to the United States, a market we were competing in but lost out badly.
This means there will now be local producers that can offer product specifically for the EU and UK markets. They are in fact separate markets with different specifications.
There are producers in Central Queensland that are so keen to deal with the UK they are building their own abattoir on their property. They will now have even greater confidence because the quota’s gone from 4600 tonnes to 35,000 tonnes. That makes their business model very stronger.
And while China is still currently our biggest customer for beef with the October/November quota already filled in June 2021, the demand from China is still there, but the UK trade deal and others to follow will lessen our concentration into that market.
This is where we stand at the moment, farmgate produce is expected to wrap up in season 2020-21 at a record-breaking $66.3 billion.
This was helped along with the value of agricultural exports settling at just under $47 billion from the 2020-21 season.
This money flowed from the farm economy through strong domestic livestock prices, and also because the pace of our grain exports has been faster than expected after harvesting the second largest winter crop on record.
What is important now is the effort required for the coming season, 2021-22.
Already, there are solid pointers to the value of exports growing to almost $50 billion in 2021-22, driven by higher beef, wool and dairy exports, as well as a sharp recovery in cotton exports.
Another factor likely to boost farmers’ bank accounts is more livestock available to begin flowing into meat processing in 2021-22. This follows some restrictions last season as herd and flock rebuilding was a major focus, holding up livestock processing more than usual.
If we are to beat the record-breaking $66.3 billion result for the past season, farmers will need the ink-drying UK FTA agreement to pay off in a big way, and for every ounce of support the government is offering in its Ag2030 plan to reach $100 billion in production by 2030 to come to fruition.
Everything promised to reach the Ag2030 plan will need to start flowing, including the money promised from the current budget.
This includes backing farmers with additional investments this year of over $400 million to strengthen biosecurity, $29.8 million to grow the agricultural workforce, and $15.0 million to improve trade and market access.
A further $32.1 million has been allotted to extend opportunities to reward farmers for the stewardship of their land, with an additional $129.8 million to deliver a National Soils Strategy.
We need to see this money flowing if farmers are expected to continue production growth, and a little tip for the government, this is only the start of the investment required for the target set, and it will need to be topped up substantially as we move into next year.
More plans such as the $72.7 million Agri-Business Expansion Initiative, that provides scaled-up support services for more than 2,000 agri-food exporters to expand into more world markets will be needed.
The farm sectors expected to lead with increased growth will all need a top-up of employment, with many women expected to come into the industry for the first time.
Previous labour supply vulnerability can be arrested if women are enticed by the recent increase in wages and as working conditions generally improve across all farm sectors.
However, it will take a concerted campaign from both the farm industry and government to gain the confidence for women to join the farm workforce in roles not customarily associated with them previous.
Cash incentives as applied to fruit workers in the past season will be needed to gain the required number of female workers into roles such as tractor and machine operators.
Other labour-intensive industries such as shearing, meat processing and fruit picking will all be areas that determined women can be trained to occupy. The interrupted flow of labour across state borders could be arrested by women already living in labour shortage regions getting the require training.
Significant potential improvements will be gained, including sharp increases in production during favourable seasonal conditions. All it needs are changes to current farm management practices to make more efficient use of the labour that women can provide.
As global demand for our agricultural produce continues to improve, markets for our wool, cotton and vegetable oils are also forecast to continue recovering, with our dollar expected to appreciate in 2021–22 to average US78 cents for the year.