AGIC 2023: Watt opens up on trade, biosecurity

Liz Wells, July 27, 2023

Federal Agriculture Minister Murray Watt addresses AGIC 2023. Photo: AGIC

AUSTRALIA holds high hopes for increased grain exports to India and a resumption of barley business to China, according to Federal Minister for Agriculture Murray Watt.

Speaking in Melbourne yesterday at the Australian Grains Industry Conference to its theme, Challenging Success, Maintaining Momentum, Mr Watt said challenges included the swing out of a “prosperous La Niña period” into drier conditions, and increased biosecurity threats.

“This is why it is so important to have a plan for the future, and for government and industry to work together, as we have been doing on a number of issues.

Mr Watt was recently part of a delegation which traveled to Rome for a United Nations Food and Agriculture Organization meeting, and to India on a trade mission, where he was joined by representatives of Grain Trade Australia, Grain Growers Ltd, Grain Producers Australia and Grains Australia’s Pulse Council.

“The potential of the Indian market has to be seen to be believed,” Mr Watt told AGIC delegates.

This year, India’s population overtook China’s mantle as the world’s most populous nation when its population hit 1.4 billion.

“Its middle class is large and growing fast, with a real demand for healthy, clean, quality food – the kind Australia specialises in.”

He said the Indian population was a relatively young one, and in 17-year-olds can match the entire Australian population.

Open market access to India remains an issue, and Mr Watt said despite the bilateral Australia-India trade agreement now in place, India’s door remained closed to some Australian commodities.

“It’s not exactly a secret that the Indian grain market is a difficult one to crack.”

While India is the major buyer of Australian lentils, and an occasional buyer of wheat, its tariffs on chickpeas have closed what was once the biggest market for Australian desis, and barley exports remain off the table due to India’s phytosanitary restrictions.

“Grains is certainly a focus in our negotiations for a broader Australia-India Comprehensive Economic Cooperation Agreement.

“I certainly made the case, in my meetings with five Indian Cabinet Ministers, including the Ministers for Trade, Agriculture and Food Processing, that we seek improved market access for key grains and pulses.”

“I think this is possible; we don’t seek to swamp the Indian market and, let’s face it, we couldn’t do that, even if we tried, but we could fill the gaps.”

Positive signs from China

Mr Watt met in Rome with his Chinese Government counterpart as the first meeting in four years between Australian and Chinese Agriculture Ministers, and said it was one of several positive signs coming out of China.

Mr Watt said while progress around reanimating Australian exports to China of commodities including cotton and timber had been removed, the “full resumption of unimpeded trade” was essential.

“I was pleased to see China’s recent publication of updated lists for wheat and barley establishment and exporters.

“We see this as a positive step… in the agriculture trade relationship.”

Mr Watt said the Australian Government remains confident of a positive outcome in the World Trade Organization barley review.

Challenges in Europe

Mr Watt said Russia’s decision to terminate the Black Sea Grain Initiative will exacerbate food insecurity globally, hurting those most in need.

“This initiative was critical to ensuring the predictable supply of food.

“That’s one reason our government is calling on Russia to return to the negotiating table.”

At a bilateral level, Mr Watt said negotiations are continuing between Australia and the European Union to reach a free trade agreement.

“We recognise the benefits of a deal with this large and high- value market, but we have made clear that we will only do a deal that is in the interests of both parties.

“We are not prepared to do a deal that isn’t in the interests of our agriculture sector and our overall national interest.

Watt defends biosecurity funding

The Albanese Government has been the target of some criticism within the agricultural sector for proposing a producer levy to help fund a strengthened biosecurity system which Mr Watt described to the AGIC audience as Australia’s first sustainably funded biosecurity system.

He said this has replaced the previous model based on temporary funding, and includes funding of more than $1 billion over four years for biosecurity operations, starting with $267 million in 2027-28.

Under the model, additional fees and charges on importers came into effect in January, and are expected to collect $38M over the next three years to help reduce the risk of hitchhiker pests, like khapra beetle, a major pest for stored grain.

In its May Budget, the Federal Government increased biosecurity fees and charges on importers by more than $36M per annum, and new charges on will be introduced on imports worth less than $1000, which Mr Watt said were a growing source of biosecurity risk, to contribute a further $27M to the annual biosecurity budget.

“With our changes, importers will pay their fair share.”

“My view was that our farmers should not bear the full cost of biosecurity operations, but as the direct beneficiaries of the system, it was reasonable to ask them to make a small contribution.

From 1 July 2024, a Biosecurity Protection Levy on domestic agriculture, fisheries, and forestry producers will be introduced, and Mr Watt encouraged AGIC delegates to get involved via the Department of Agriculture website in the upcoming consultation process.

For the grains industry, Mr Watt said the levy was expected to represent an extra one tenth of one percent of the sale value of most crops, and will contribute around 6pc of Commonwealth biosecurity funding in 2024-25.

“I think that’s a pretty small contribution when we think about what’s at stake.”

This compares to the 44pc contributed by government and 48pc by importers, with 2pc to come from additional sources.

Mr Watt said the funding model would contribute to better technology systems to streamline the biosecurity inspection process, right down to posted items.

“You would be amazed to find out the kind of stuff people try to get through the mail.”

Mr Watt said the reinstatement of container levies was being investigated as a way of further bolstering biosecurity funding.


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