Page 19 - Australian Pork Newspaper

GRINDER MIXERS
Superior Feed Grinding Action
• 2 1/2 Ton Tank • 20” Hammermill • 72 reversible hammers
• Ingredient supplement hopper
• Weight bars and indicator
Optional
Hydraulic Auger Feeder
• 4 Ton Tank • 26” Hammermill • 96 reversible hammers
• Wireless remote operation
• Weight bars and indicator
FOR FURTHER INFORMATION or YOUR NEAREST DEALER TALK TO GRAHAM 0418 177045
3 Endeavour Street, Warragul. Vic 3820 Ph (03) 5623 1362 www.vinrowe.com.au
Taxing imports is no simple solution
PRODUCER meetings are under way across the east- ern seaboard as producers meet with Australian Pork Limited and respective state farming/pork organisations to discuss the industry’s profitability crisis.
One of the issues that pro- ducers raise is whether APL can just ask the Australian Government to stop the im- ports.
Processors of pork products would then be forced into buy- ing Australian pork – ‘solving’ the current situation.
Another version is that APL should ask the Government to put a tariff on imports, provid- ing a more level playing field to Australian producers.
Sounds like an easy and a quick solution – producers will benefit and consumers will finally get more Austral- ian pork on their forks.
However, life is never that simple.
Australia is a member of the World Trade Organisation, meaning Australia has obliga- tions in how it interacts with trading partners.
These obligations include agreed commitments on tar- iffs and tariff quotas, export subsidies and domestic agri- cultural subsidies.
As a member of the WTO, Australia has undertaken not to raise tariffs above the levels agreed in trade nego- tiations and upper limits for subsidies.
WTO members generally have a bound tariff (the maxi- mum tariff that can be ap- plied) and an applied tariff (the tariff applied at the bor- der, normally lower than the bound tariff).
For pork, the current levels of tariffs were agreed dur- ing the Uruguay Round in 1994, when Australia bound the pork tariff lines to zero,
Point of View
meaning pork enters Australia with no tariff.
As this is the bound tariff, Australia cannot apply any tariff on pork outside of very special circumstances, for ex- ample in the event of an anti- dumping action (for more on this see Andrew Robertson’s article on Page 12 in APN June 2018).
If APL were to ask the Gov- ernment for an outcome in- consistent with Australia’s WTO commitments, we would be burning political capital long built up over two dec- ades – and for something the Government would not be able to deliver.
Even if Australia did decide to breach its WTO commit- ments and apply tariffs, this action would certainly result in retaliatory actions by trad- ing partners applied to more than just the pork trade.
Retaliation may very well affect Australia’s positioning across agriculture and non- agricultural trade and ser- vices.
The dispute between the US and China is a case in point, with producers in the US now suffering a significant domes- tic glut of pork, and produc- ers in China facing significant increases in feed costs due to retaliatory tariffs applied by China to US soya beans.
In any case, it is useful to
look at the extent to which im- ports have contributed to our current situation.
APL’s latest Import, Export & Domestic Production Re- port (dated May 2018), shows that over the year to May 2018, pork import volumes declined by 4.6 percent.
Pork imports have remained relatively steady since Sep- tember 2015 – well before the current price decline oc- curred.
The same report shows pork exports have increased by 16.5 percent over the same period, albeit exports remain lower than imports at about 43,958 tonnes.
Exports (volumes and value) have been increasing steadily since around March 2016.
The current situation is a re- sult of an imbalance between domestic supply and demand.
The situation has not been caused by Australia’s commit- ments regarding international trade rules – which have been in effect for 24 years.
Since then, Australia’s do- mestic pork market has seen a few highs and lows, with the lows resulting in structural adjustment.
Unfortunately, the current situation will result in the further exodus of producers, mostly but not exclusively, smaller family owned pig farms.
US subsidies another blow to drought-
stricken farmers – NFF calls on
government to register disapproval
THE National Farmers’ Federation is calling on the Australian Govern- ment to register its dis- approval in the ‘strongest possible terms’ with the US Administration follow- ing its decision to provide $US12 billion in new sub- sidies to US farmers.
NFF chief executive To- ny Mahar said the subsi- dies would hurt Australian farmers who were already suffering from crippling drought conditions.
“Australian farmers are among the least subsidised in the world, which means our agriculture exports are particularly vulnerable to increased government as- sistance in competitor na- tions,” he said.
Mr Mahar said the news of the additional subsidies was particularly disap- pointing given Australian farmers, especially those in Queensland and NSW, were contending with one of the worst droughts in decades.
The subsidies are a di- rect response to the fallout
from the US’ decision to impose tariffs on China, the European Union and other countries.
While the US Administra- tion has called for a level trade playing field, these new subsidies will do noth- ing but further tilt agricul- tural markets against those farmers who play by the book.
Mr Mahar said such ‘reck- less actions’ damaged the global trade system on which our farmers relied so heavily.
“Our fear is that this is
deepening the potential for a global trade war that will hurt producers and consum- ers alike.”
The World Trade Organi- sation, and its predecessor the General Agreements on Tariffs and Trade, were cre- ated to ensure the crippling tariff increases that contrib- uted to the Great Depres- sion did not happen again.
“It appears the US has ignored the hard-learnt les- sons taught by the damage caused by trade protection- ism,” Mr Mahar said.
www.nff.org.au
www.porknews.com.au
Australian Pork Newspaper, August 2018 – Page 19
by DEB KERR General Manager Policy