Autumn 2019, Vol. 16, No. 1

Disruptions in agricultural trade

Australian agriculture is trade dependent. Around 65% of Australia’s agricultural production is exported and if the sector is to achieve the National Farmers’ Federation (NFF) target of $100 billion of farmgate output it will mostly occur as a result of export growth. Yet there are many current disruptive factors to global trade which are impacting on the reliability of markets and creating uncertainty in forecasting where export growth may be achieved. This edition of the Farm Policy Journal explores the current environment surrounding global agricultural trade.

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Post-Brexit options for Australian agricultural trade

Tim Fischer

In the current political zeitgeist, it seems almost impossible to predict what will happen next with the United Kingdom (UK) and the European Union (EU). Brexit? No Brexit? Deferred Brexit? Yes Brexit!
Even if there is a last-minute extension for the UK, Australian post-Brexit manoeuvres should focus on now building CANZUK (a political and economic union of Canada, Australia, New Zealand (NZ) and the UK) with the addition of Singapore, thus SCANZUK. This is an alliance worthy of early consideration.

The future of Chinese agricultural policy

James Fell

China has announced major changes in its direction of agricultural policy. This report provides a qualitative assessment of the reforms, focusing on the 2017 announcements. The changes feature principally supply-side structural reform of Chinese agriculture. Reforms are also regulatory, with a major focus on food quality and safety rules. The outlook for Australia’s grain exports to China is mixed. However, the changes present new opportunities for Australian livestock product exporters and other countries are already exploiting the demand for improved livestock genetics.

A ‘Great Deal’ of nonsense: why US-China trade numbers don’t add up

Michael Every

Markets have been taking a very optimistic view of ongoing United States (US)-China trade negotiations in early 2019. China has offered to increase imports from the US by US$1 trillion to eliminate the bilateral trade deficit by 2024. However, a serious look at the structure of US-China trade shows this purported deal cannot and will not be achieved. As such, the current calm in financial markets will not last either. There is much talk of a ‘Great Deal’, but logic, mathematics, and politics suggest this is a great deal of nonsense.

China’s Belt and Road: a game changer for global trade

Richard Heath

China’s Belt and Road Initiative (BRI) is an enormous program of infrastructure development and trade facilitation. It will have far-reaching consequences for not only Australia’s immediate region but also for a significant proportion of global trade. Australian agriculture is export dependent and the industry goal to grow to $100 billion farmgate output by 2030 will require export growth to be sustained and substantial. Understanding the implications of the BRI should therefore be of critical interest to Australian agricultural businesses, government and anyone with an interest in how the agriculture sector will grow.

Australia: the next global hub for Agriculture 4.0

Karen Caston and Anne Maree Weston

The Australian agriculture and food sector is attracting new interest in its technology and innovation capability. Some of the new food supply chain technologies include biotechnology, smart farming, robotics, sensing technology, IoT connectivity, bio-security, food production and processing, traceability, provenance and food quality surveillance. These ‘Agriculture 4.0’ technologies enable the agriculture and food sector to become more profitable, efficient, safe, and sustainable. Agriculture 4.0 technologies will enable Australia to achieve ambitious agricultural production targets with flow-on export growth in agtech and foodtech products and services.

The changing trade positions of the United States

Bob Young

Changes to United States (US) trade policy have prompted global concern over potential disruptive effects. For several decades, the US has played a leading role in promoting international trade. China, however, remains a major challenge in this new trade world. While the implications of market disruption associated with the Chinese market are clearly significant, the implications are not limited to China alone. Continued disagreements with the European Union as well as several other Asian nations still disrupt historical trade patterns. How those market shifts occur will impact the ways Australian agriculture may adjust, internally and internationally.

The role of technology in improving food trade

Samuel Admassu

The inefficiency of the traditional food supply chain (FSC) is causing significant revenue loss for Australian farm enterprises via both food loss and food fraud. This article evaluates available literature and data to assess the benefit of new FSC technologies to enhance Australian agricultural trade efficiency. The literature reveals the increasing cases of food fraud that damage the reputation of genuine producers – an issue Australian agriculture should focus on, to preserve the country’s good reputation for food quality and safety domestically and abroad which underpins successful trade relationships.

Disruptive change in the international grain trade: implications for Australia

Ross Kingwell

Disruption to the international trade of grain can advantage or disadvantage Australian grain businesses. Several examples of such disruptions are described in this article, such as climate variation, changes in government policies and technical innovation. However, the main disruption highlighted is the emergence of low-cost sources of grain exports. South America and the Black Sea region are increasingly major sources of grain exports, reducing the reach and market share of Australian grain exports and restricting grain price upsides. This paper outlines some potentially useful responses to the trade challenges caused by the emergence of these competitors.

Bumps on the road to opportunity for red meat sector

Patrick Hutchinson

The future for the Australian red meat industry is bright, but there’s work to be done in order to get there. Four of the main issues to address may be perceived either as challenges or opportunities: i.e. cost to operate; the global context; social pressures; and the chance for a major policy reset post-election. Australian meat processors are dealing with operating costs which are dramatically higher than their key global competitors, which adds up to intense and unrelenting competitive pressure right across the global supply chain. While social pressures are currently a greater issue in developed markets, activism will likely follow growth in developing markets.