What Free Trade Agreement, Farmers Ask

The Age

Tuesday February 10, 2004

Melissa Marino

Sugar farmers have been shocked and surprised to find themselves left out of the free trade agreement, saying this will have repercussions for struggling canegrowers.

Ian Ballantyne, general manager of industry association Canegrowers, said it could lead to farmers leaving the industry.

Mr Ballantyne said cane farmers had been struggling over the past four years, dropping nearly $1 billion in revenue due to extremely low world prices, a rising Australian currency and ordinary weather. Inclusion in the free trade agreement had the potential to add $120 million in revenue in any one year to what is now a $2 billion industry, he said. ``Being excluded is a pretty bitter pill to take." Prime Minister John Howard had led the industry to believe it would be included, he said.

``We would have liked the extra money, but the biggest issue is that it's really undermined confidence in the industry's future," he said.

While unprotected Australian cane farmers get the international price of about $200 a tonne for their sugar, their highly regulated and subsidised US counterparts get $600 a tonne.

International prices kept artificially low by subsidies have dogged Australian farmers for years, said grower Graham Martin, president of the NSW Canegrowers Association. ``We have had to tighten our belts very bloody tightly to keep going."

On beef, the Federal Government says the deal will provide ``substantially improved access" for producers, but yesterday the industry was not convinced.

The Government says Australia's beef quota to the US market - now 378,214 tonnes - will grow by 18.5 per cent over 18 years, and then become ``effectively free trade".

Producers will be able to export an extra 15,000 tonnes in year two of the agreement, increasing to 70,000 tonnes in year 18, with the quota then rising by 0.6 per cent a year.

In-quota duties of 4 cents a kilogram will be eliminated immediately, and over-quota tariffs of 26.4 per cent will be phased out from years nine to 18 of the agreement.

But the acting president of the Cattle Council of Australia, John Wyld, said the term ``free trade" was a misnomer as safeguard provisions meant tariffs would be reimposed if US Select Grade beef prices fell by 6.5 per cent on a rolling average basis.

``What we're saying is that it's really not a free trade agreement, it's a quota agreement," he said.

Meat and Livestock Australia, responsible for researching and marketing Australian red meat, said it was ``bitterly disappointed", and that the 70,000-tonne increase equalled less than two days of US beef production.

David Palmer, the regional manager for North America, also warned that Australian beef producers would probably have to wait at least four years for a quota increase, as the 15,000 rise scheduled for year two depended on US beef exports returning to 2003 figures.

The president of the Victorian Farmers Federation's livestock division, Simon Ramsay, said the agreement would have very little immediate impact on the state's beef producers. Beef farmer John Harris, 54, is not excited by it all. The way he sees it, when free trade effectively begins in the 18th year, he expects to be ``retired and on the beach".

``Any extra access is good, but 18 years is a heck of a long time," he said. ``For the generation of farmers our age, they're not going to reap a real lot of the benefits . . . hopefully their children will."

The dairy industry was the happiest agricultural sector, saying dairy farmers expect to earn an extra $56 million in the deal's first year. United Dairyfarmers of Victoria president Peter Owen said Victoria would benefit most from the deal, which will allow farmers to export three times as much to the US as under tariff quotas. The Government said the deal gave access to US markets to products previously excluded, including 2000 tonnes of European-style cheeses and 7.5 million litres of milk, ice-cream and cream.

Dairy farmer John Versteden, from Longwarry near Warragul, said: ``We've still got to see the details yet because sometimes the devil can be in there."

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© 2004 The Age

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