Agricultural Trade Matters, September 2020
Agricultural trade matters provides an overview of what the Department of Agriculture, Water and the Environment and the Australian Government are doing to support international agricultural trade.
This is the current edition, published September 2020.
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Ensuring Australian food and agricultural products continue to move .
The world changed dramatically in March this year when COVID-19 began to spread around the globe. As border after border was closed, countries were working together to ensure that trade in essential products, including food, kept moving.
As a result of COVID-19, changes to the global trade landscape has prompted regulators and industry alike to think about alternative ways to ensure Australian exports can continue.
The Department of Agriculture, Water and the Environment was quick to get in touch with our trading partners to reassure them that our food and agricultural supply chains remained safe.
First Assistant Secretary Fran Freeman believes COVID-19 has presented an opportunity to not only support maintaining market access for our exports – but to also push along some of our long-term goals.
Read more about supporting trade in a COVID-19 world
‘Recently we’ve seen some real flexibility and commitment from our trading partners. Prescriptive import requirements are being relaxed and engagement on the uptake of electronic certification for food and agricultural products is increasing.’
‘We haven’t stopped there,’ Ms Freeman continued.
‘The pandemic has prompted us to examine how we maintained some of our core regulatory responsibilities like our verification activities, to see how we can continue to meet them in a COVID-19 world.’
The department recently implemented alternative inspection activities – including the use of technology – for a range of products including meat, dairy, fish, organics and non-prescribed goods.
‘We play an important role in helping our exporters access overseas markets in the current environment and beyond. Modernising how we deliver our regulatory functions is a key part of that role.’
The department is committed to leading this work internationally for the benefit of our farmers, our exporters, and the broader Australian economy.
‘Our COVID-19 response and strategy for market access will support our export industries recover and remain internationally competitive by maximising market access opportunities.’
Juicy Australian oranges.
This year has seen the seasonal tariff for oranges eliminated under the Korea-Australia Free Trade Agreement (KAFTA), and Korean importers are taking note of this juicy opportunity!
Korea is a growing market for Australian horticulture. The benefits delivered under KAFTA are providing attractive opportunities for our producers and exporters. Since KAFTA entered into force, citrus exports to Korea have increased significantly.
E-Mart, one of Korea’s largest retailers, has announced a 500% increase to its imports of Australian navel oranges this year alone, with plans to diversify into other Australian orange varieties as the season progresses.
Australian navel oranges, harvested from July to September, are capturing attention for their sweetness and price-competitiveness in a market where the highly acidic Valencia variety has traditionally filled the seasonal gap in citrus imports from the United States.
Read more about Australian Citrus a Summer Hit in Korea
The Department of Agriculture, Water and the Environment’s Biosecurity Plant Division, the Australian citrus industry and Australia’s Agriculture Counsellor in Seoul, all continue to work together with Korea towards long-term trade improvements for Australian citrus exports to the country. With COVID-19 restrictions making pre-clearance inspections by Korean officers impossible, we aim to embed interim solutions as ongoing arrangements, reducing costs and providing flexibility for Australian citrus exporters.
These technical improvements ensure that the benefits KAFTA delivers to the Australian citrus industry will be maximised, enhancing the availability, competitiveness and reputation of Australian citrus in Korea now and into the future.
For further information visit Exporting from Australia on our website.
Imported shipping containers.
Starting this month, importers of a number of food and other agricultural commodities into Australia will find it quicker and easier to import goods.
This is thanks to the expansion of the Automatic Entry Processing for Commodities (AEPCOMM) program, which has just added 7 new commodities and expanded 3 existing groups. This means quicker clearance times for those commodities, a reduction in fees for importers and freeing up our Biosecurity Officers, allowing them to increasingly focus their efforts on high-risk consignments and effectively manage non-compliance.
In 2018 our department implemented improvements to its Automatic Entry Processing IT system through the introduction of the Automatic Entry Processing for Commodities (AEPCOMM) reform project.
Read more about latest expansion to our Automatic Entry Program for Commodities system
The reform improved our capabilities to add new commodities to AEPCOMM. In addition to the recent commodity expansion, we also added 6 new commodity groups in August 2019 and included goods subject to brown marmorated stink bug (BMSB) measures into AEPCOMM in September 2018.
Our latest expansion to the class 19.2 AEPCOMM approved arrangement, which was introduced on 31 July 2020, added a further 7 new commodities (dried willow and wicker articles, fertiliser, gum products, hops, pasta, permitted plant fibres and prepared cereals and muesli bars), and expanded 3 existing commodity groups (highly processed and manufactured wooden articles, highly refined organic chemicals and unfinished timber and timber products).
‘AEPCOMM expansion provides quicker clearance times for industry and a reduction in document assessment fees and intervention,’ explained Peta Lane, First Assistant Secretary of the department’s Compliance division.
‘Class 19.2 AEPCOMM accredited persons can generate automated biosecurity directions based on information entered into our Integrated Cargo System. Import documentation is not required to be submitted to us for assessment unless requested for verification.
‘AEP enhancements have reduced system limitations to broaden the availability of AEP and provides additional support for industry participants to conduct document assessments and nominate biosecurity outcomes.
‘As part of our extensive industry consultation over the latest AEPCOMM expansion, we hosted a webinar on 4 August that was well-attended by almost 500 live industry participants. This formed the mandatory Continued Biosecurity Competency (CBC) activity for 2020-21.
‘Our updated verification regime rewards demonstrated compliance with reduced intervention. This level of certainty will promote the continuous expansion of commodity groups leading into the future,’ Ms Lane added.
For more information on changes to AEP, visit agriculture.gov.au/AEP reform project
A variety of fresh Australian limes.
The Agricultural Trade and Market Access Cooperation (ATMAC) grants are being used in a range of ways to help improve market access for Australian produce. This recently included funding for a study on fruit flies and whether they are a risk in Australian finger limes. Fruit flies are a major trade barrier and research like this goes a long way towards gaining access to new export markets for Australian finger limes.
Through ATMAC grant funding, the Department of Agriculture and Fisheries (QLD), in partnership with the University of Sunshine Coast and Murdoch University, undertook research to determine the host status of finger limes for fruit flies using multiple internationally accepted approaches. This included laboratory host status trials and sampling of fruit from orchards to determine natural host status.
The ‘host status’ of fruit for a particular pest is an important element of risk analysis to determine what, if any, phytosanitary measures are required to reduce biosecurity risk. The pest host status of fruit can be determined by following procedures outlined in internationally accepted standards.
Read more about host status for Australian finger limes improved market access
As mentioned, fruit flies are a major trade barrier, preventing the export of finger limes to overseas markets. To access quarantine sensitive markets, fruit that are grown in areas where fruit flies occur must be subjected to post harvest treatment. This can include in transit cold treatments, pre-shipment cold treatment, irradiation or fumigation, which can affect the shelf life, fruit quality and delay the supply to market. As a result, Australian finger lime growers want to export their fresh fruit without having to undertake post-harvest treatments against fruit flies.
The research project by the Department of Agriculture and Fisheries (QLD), University of Sunshine Coast and Murdoch University produced a data set that demonstrated five finger lime cultivars (D1, Emerald, Byron Sunrise, Rainforest Pearl and Judy’s Everbearing) can be classified as conditional non-hosts of Mediterranean fruit fly. This data package could be used to support new market access negotiations for Western Australian growers.
For fruit flies in the East coast production areas, a dataset from field sampling showed that no fruit fly infestation was recorded in undamaged fruit. A total of 43,075 Emerald finger limes were collected comprising undamaged fruit and damaged fruit and no infestation by the major pest species target was recorded. While this is a very positive result, it does not mean that finger limes, or more specifically Emerald finger limes can be automatically classified as a non-host or conditional non-host for these flies. As such, the next step in clarifying the host status of finger limes is to undertake field trials using “semi-natural conditions” (i.e. fruit still attached to the tree).
The project also investigated the mechanisms for fruit fly resistance in citrus and identified a segregating population of citrus showing strongly resistant and strongly susceptible cultivars, and developed a predictive model for identifying resistant hybrids.
This project has provided valuable information on the host status of finger limes for fruit flies and will support the market access aspirations of the Australian finger lime industry. It also demonstrates the value of grant funding, like ATMAC, in supporting innovation and research in our agricultural sector.
Australia - United Kingdom Free Trade Agreement.
Negotiations for the Australia-United Kingdom Free Trade Agreement (A-UK FTA) are underway, with the first round held virtually from 29 June to 10 July.
Negotiating an FTA with the UK provides an opportunity for Australia to expand agricultural market access to a high value export market. The department works in the negotiations to support Australia’s agriculture and environment interests. Our Minister-Counsellor in London is also playing a key role supporting these negotiations and advocating for Australia’s agricultural interests in market.
The UK is Australia’s seventh largest trading partner with two-way trade valued at A$30.3 billion in 2018-19. Key Australian agricultural exports to the UK include wine ($371.7 million in 2019), beef and veal ($51.5 million in 2019) and lamb ($48.6 million in 2019). The UK is the largest investor in Australian agricultural land (holding over 10 million hectares).
Read more about start of Free Trade Agreement Negotiations with the United Kingdom
Minister for Agriculture, Drought and Emergency Management, David Littleproud, said both Governments are committed to progressing the FTA, and improved market access for agricultural products will be at the forefront of negotiations.
‘An FTA with the UK will take Australia and UK’s already strong economic partnership to the next level,’ Minister Littleproud said.
‘This is great news for Australian farmers and Australia’s agricultural sector.
‘Australian farmers produce to the highest environmental and animal welfare standards and are rewarded all over the world for their high-quality produce. The UK is a market with whom we can share products, innovation, and services in agriculture.
‘The UK and Australia recognise the importance of open markets and the benefits of global trade and investment, including to our agricultural and manufacturing sectors.
‘The Australia and the UK agri-food industry are closely and historically linked through investment.
‘Concluding a high-quality FTA will also assist in the economic recovery of both countries in the wake of the COVID-19 crisis.
‘The Australian Government will stand with our farmers and continue to work to find new and expand existing markets to give them a competitive edge.’
Harvesting wheat in Western Australia.
The annual release of the Organisation for Economic Co-operation and Development (OECD) Agricultural Policy Monitoring and Evaluation report highlights that governments around the world transfer over US$700 billion a year to their agriculture sectors.
Around 40% of this funding goes towards subsidies and measures like tariffs and quotas that distort global markets, make food more expensive for consumers and also harm the environment. The OECD recommends that governments redirect their efforts towards high-return investments like innovation systems, hard and soft infrastructure, environmental measures and in enabling more resilient food systems.
‘Australia supports the OECD’s advice that governments need to roll back distortive and environmentally harmful support. Consistent with OECD recommendations, the Australian Government is focussed on supporting agricultural innovation systems, inspection and control systems, and improving resilience through income smoothing programs that address cash flow fluctuations,’ said Mr Simon Smalley, Australia’s representative for agriculture at the OECD.
Read more about no-one wins from subsidies to agriculture
Australian farmers are some of the least subsidised in the world, with under 2% of farmers’ revenue from government interventions, as measured by the OECD in 2017-19. Keeping subsidies low and removing distorting government intervention spurs overall sector growth, increasing participation in global markets and the contribution that agriculture makes to the rural and national economy.
‘Current global levels of production and trade distorting interventions mean that global agricultural production and trade is lower than it could be, and households are worse off,’ said Dr Jared Greenville, Assistant Secretary Agricultural Forecasting and Trade Branch, Australian Bureau of Agricultural and Resource Economics (ABARES).
OECD analyst Dr Emily Gray sounded a note of caution about the large U.S. trade war payments and disaster relief programs of recent years, warning that assistance and subsidy packages can be detrimental in the long term, where producers are discouraged from adapting to new market and climate conditions and can come to rely on the support.
‘No-one wins from these type of assistance or subsidy packages in the longer term. These types of direct support payments can distort markets, disrupt supply chains, and carry long-term implications that outweigh any intended short-term benefits,’ said Australia’s Minister Counsellor in Washington, Cameron Hutchison.
ABARES published the Analysis of United States and Australia agriculture – a comparison paper last year, noting that Australia and the US share 6 of our top 10 export markets, in addition to counting on each other as key trading partners.
‘It’s important that we continue to support the multilateral framework to tackle distortive measures and advocate for a level playing field,’ said Mr Hutchison.
You can read more about the OECD findings in the OECDs report.
OECD (2020), Agricultural Policy Monitoring and Evaluation 2020, OECD Publishing, Paris, https://doi.org/10.1787/928181a8-en.
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