Past chairman of the WA Farmers’ Federation and current chairman of FarmSafe WA Mike Norton has cautioned for patience on the finalisation of the recent China-Australia Free trade Agreement.
Whilst applauding the news of the agreement with China, the prominent South West dairy and beef producer said things were moving at an alarming rate.
“The agreement will undoubtedly present greater opportunities for beef farmers in the south west,” he said.
“Things are moving at an alarming rate, with the Chinese middle class being the target - but we must remember that patience is needed for the long term market because the Chinese are very thorough with their negotiations, so nothing gets rushed through.”
Currently Western Australia is the nation’s largest exporter when it comes to beef and wool to China.
Premier Colin Barnett said any move to reduce trade barriers with one of Australia’s largest export markets was good news for WA, particularly for agriculture and food producers.
“China is one of WA’s most valuable export markets and this agreement will help ensure the State can further benefit from the very rapid growth of China’s middle and upper classes,” the Premier said.
“The new trade agreement between Australia and China will provide incentives for WA exporters to further develop their business with China, and for many, it will encourage them to consider exporting there for the first time.”
China is forecasting beef consumption will increase from the six to seven million tonnes over the next five years and currently Australia supplies only a fraction of that (155,000 tonnes in 2013). Live cattle exports have also boomed in the breeder and dairy sector with China taking 86,000 last year for $136 million.
Mr Norton suggested that if the politicians are right and the Free Trade Agreement delivers, there won’t be enough beef in Australia.
“With the current demands of Asia plus the USA being at an all time low, we need to focus on building up numbers to meet this challenge – and the time to start is now,” he said.
Asked if this will have an effect on prices paid to beef producers, Mr Norton commented that it had already started to happen with the reopening of the Indonesian market.
“Many struggling south west beef producers will see this move as a shot in the arm,” he said.
“The market has already started to turn and beef prices have improved over the last 6–9 months. This is going to add pressure to raise prices – but it’s early days. What we have is a sought-after commodity so the agreement is going to be beneficial to many - in the long term.”
The Premier said China’s 1.4 billion people-or almost 20 per cent of the world’s population-strongly valued Western Australia’s food safety, quality and traceability.
“WA’s clean, safe, high quality food is already in high demand in China. This agreement will provide better access to this important market for our State’s producers,” Mr Barnett said.
Even though the FTA is not expected to enter into force until Australia and China have completed their domestic treaty-making procedures, the Premier said the WA Government’s offices in China would welcome enquiries from WA exporters, and can help WA businesses when they are visiting China.