Stung by China’s tariffs, Australian growers embrace new markets | Agriculture

Sydney, Australia – Brett Hosking, a grain farmer in Victoria, Australia, has taken a major reduce in income since China slapped an 80.5 p.c tariff on Australian malt barley in 2020.

Now, barley growers estimate that they’re dropping $50 Australian {dollars} ($35) per tonne, he mentioned, as a result of they’re having to promote their high quality malt barley to different markets as livestock feed.

However it’s not simply barley growers who’re underneath strain. Different Australian industries, together with timber, barley, sugar, lobster and wine, have suffered on account of Chinese language commerce restrictions launched since 2020.

Farmers in these industries are hopeful that China-Australia tensions will ease underneath Australia’s new Labor Get together authorities, elected in Could, after relations hit a brand new low when then Prime Minister Scott Morrison known as for a global inquiry into the origins of COVID-19.

After a gathering along with her Chinese language counterpart Wang Yi final month, Australian overseas minister Penny Wong described their talks because the “first step in the direction of stabilising the connection”. Australian Prime Minister Anthony Albanese has mentioned Australia will “cooperate with China the place we will”, however “doesn’t reply to calls for”.

However after greater than two years of strained ties, some are prepared to maneuver on altogether, seeking to diversify or get out whereas they nonetheless can.

Many barley growers are wanting into different crops or growing their manufacturing of different grains, Hosking mentioned, though most haven’t switched crops completely as a result of want to think about the long-term sustainability of their farms in addition to market modifications.

“Possibly a bit of bit extra canola, bit extra lentils, even a bit of bit extra … wheat in instances,” he instructed Al Jazeera.

China is Australia’s largest commerce accomplice, accounting for practically a 3rd of the nation’s worldwide commerce. Though Australia’s economic system has held up effectively total on account of commerce diversification and powerful exports of commodities reminiscent of iron ore, the commerce restrictions hit industries like barley arduous.

“It’s most likely probably the most vital market challenges we’ve confronted,” mentioned Hosking, who can be chair of GrainGrowers, the nationwide voice for Australian grain farmers.

China is “nonetheless a very essential market” for grain total, he mentioned, and farmers sometimes develop a spread of grains, however “there isn’t one other market on the planet that calls for malt barley on the identical degree that China does.”

An identical push to diversify is enjoying out within the wine sector, which has been hammered by Chinese language anti-dumping duties as excessive as practically 220 p.c.

After the introduction of the duties, shares of the world’s largest listed winemaker, Australia’s Treasury Wine Estates Ltd, plummeted greater than 13 p.c, whereas tons of of transport containers of wine piled up at ports round China.

Jeremy Cass
Riverina Winegrape Growers CEO Jeremy Cass is lobbying for presidency help for farmers who want to transition to new crops [Courtesy of Jeremy Cass]

In New South Wales, Riverina Winegrape Growers, which represents 275 wine grape growers, is lobbying the state and federal governments to help growers who need to transition to new crops.

“It’s simply having that monetary reserve to transition into one other sort of perennial crop and even simply the price of eradicating vineyards are fairly substantial,” CEO Jeremy Cass instructed Al Jazeera, suggesting that the federal government may make use of grants or low-interest loans.

For grape growers, the dropoff in Chinese language demand has been exacerbated by an ideal storm of issues together with the pandemic and provide chain disruptions.

When it comes to logistics, getting access to ships, containers and even vans has been a battle, Cass mentioned.

“We’ve misplaced two or three trucking corporations in our native area within the final 12 months to 2 years,” he mentioned, describing how the inhabitants of truck drivers is ageing and never being changed by youthful generations drawn to white-collar work.

Whereas the Riverina initially prevented the worst results of the downturn, which noticed some growers pressured to depart their harvest on the vine, Cass doesn’t anticipate the area to be so fortunate this 12 months.

“We do anticipate to see grapes left on the vine this 12 months,” he mentioned.

One other NSW grape grower, Frank, who requested to be referred to by his first title, mentioned that the wineries he sells to have needed to put a cap on what their growers produce.

“They solely permit you to develop a specific amount of tonnes per acre,” he instructed Al Jazeera. “… So it’s going to be much less returns and with the costs additionally being so low it principally signifies that we make a loss.”

However the wineries he works with have been good to their growers, he mentioned. Different wineries have needed to drop some vineyards altogether.

Many wine-grape growers have turned to a aspect hustle to remain afloat, in response to Bruno Altin, a Riverina farmer, who believes growers want to start out discovering new markets for grapes other than wine.

“There’s so many various cultures that don’t drink … So to have the ability to access these markets with a special product, that might be a recreation changer,” Altin mentioned.

Aussie wine
Australian wine grape growers have been hit arduous by Chinese language commerce restrictions [File: James Bugg/Bloomberg] (Bloomberg)

It’s a sentiment that resonates throughout different affected industries like barley which are coming to grips with the drying up of the Chinese language market.

Whereas the “final aim” can be to see Chinese language tariffs in opposition to Australian barley eliminated, Hosking mentioned, the present tensions current “an actual alternative” for the federal government to put money into market improvement.

“We’ve seen that a bit of bit already,” Hosking mentioned. “We have now had our first shipments of Australian malt barley go to … the Heineken group over in Mexico.”

“So in a manner,” he added, “China did us a favour by inflicting us to elevate our eyes a bit of bit additional to new alternatives as an business and I feel there’s most likely extra alternatives like that.”

Cass mentioned the challenges going through Australian farmers transcend tensions with China and the federal government must recognise there are “issues all alongside the provision chain that have to be addressed”.

“We will develop as little fruit as we will, however on the finish of the day, if we will’t get it to our clients within the type of wine out of the wineries, then it’s a difficulty,” he mentioned.

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