THE region’s weather-beaten dairy and beef farmers will have “front door access” to the booming Chinese market following the signing of a historic free trade agreement (FTA) between Australia and China.
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In a jolt of confidence for the embattled sectors, the Australian and Chinese governments yesterday signed a pact promising tariff reductions for milk, beef and a range of other products and services flowing into the world’s most populous country.
It comes as the local dairy industry fights for survival on the back of poor seasonal conditions and a supermarket milk price war, and the beef industry continues to be buffeted by the live export ban, high dollar and drought.
Under the FTA, dairy tariffs will be phased out over nine years, putting local farmers on an equal footing with their New Zealand counterparts, who have enjoyed a 600 per cent increase in exports to China since signing an FTA in 2008.
“If nothing else, supply and demand dictates it would at least push up milk prices in Australia,” Westdale dairy farmer Brian Wilson said.
“It will allow our industry to grow and it can only be a positive.”
One of 14 dairy farmers around Tamworth, Mr Wilson said farmers were averaging between 55-60c per litre for fresh milk.
Paul Gibb from Tamworth’s Realm Agribusiness said the expected increase in demand would put pressure on the big supermarket chains to “sharpen their pencils”.
“The domestic price is being distorted by the supermarkets, so developing a new market has to be good,” Mr Gibb said.
“It’s been a hard couple of years. Cow numbers are right back and this is the sort of news the industry needs.”
Tamworth Selling Agents president Angus Newcombe said the FTA was shaping as a “game-changer” for the local cattle industry.
“If it all goes ahead, it will be the biggest positive for the cattle industry in a long time,” Mr Newcombe said.
Under the FTA, current tariffs of between 12 and 25 per cent will be phased out over nine years.
Australian exports to China are currently worth $722 million.
Sheep, barley and sorghum and all horticulture tariffs will also be phased out.
New England MP and federal Agriculture Minister Barnaby Joyce said the FTA would help keep Australia’s economy robust, despite the mining downturn.
“New Zealand has basically redeveloped their economy and is rebalancing their books on the back of basically one commodity – dairy,” he said.
“If Australia can match that, then that’s a great assistance to our nation and how we pay our bills and rebalance the books.”
* China deal a win for whole community: see editorial
