Global trade outlook raises concerns for Australian wheat, wool and beef exports
As the farming economy surges in value, there are growing concerns about the outlook for global trade, with the country's biggest earners in wheat, wool and beef nervous about a potential rise of protectionism.
Wheat, beef, dairy and wool are still the sectors' big earners, and the Australian Bureau of Statistics says the gross value of farm production will hit a record $63.8 billion this financial year.
"There's a lot of talk about this being the golden era for agriculture," said Fiona Simson, president of the National Farmers Federation.
"But also commodities such as cherries and also nuts have been huge winners this year. In the last few years, we've consistently seen the exports of nuts growing. Products such as almonds and macadamias account for about a billion in exports."
The Australian Bureau of Agricultural and Resources Economics and Sciences expects the gross value of horticultural exports to grow from $9.3 billion this financial year to $10 billion by 2021.
But much more of that highly valuable — and highly perishable — produce is stuck onshore, because of a maze of restrictions that block it from being exported.
These goods can only be sold overseas once both countries agree on an export protocol.
"A protocol is a country's requirement for how they want our fruit and how they want it to land on their shores," said Joe Tullio, chair of the Australian Horticultural Exporters Association.
Table grapes are a good example of the value of these protocols.
In 2011, exports were worth under $100 million annually, but now with market access to Vietnam and China, the exports are worth more than three times that amount — the highest value fruit export.
But, the fortunes for mainland cherry and stone fruit produces have not been as rich.
"It's something that's close to my heart, we trade a lot of mainland cherries. Without the protocol, it doesn't give us much incentive to go out and expand, we're just limited to the domestic market," Mr Tullio said.
Trade barriers for agriculture
Trade barriers for manufactured goods have mostly disappeared, but agriculture remains a major sticking point.
That is why the largely unprotected industry here is crying for more market access.
"The more markets we can command, the more competition there is for our product, the higher price that we as farmers can command, which is a great thing for Australian farmers. We need to do better at selling that message," Ms Simson said.
The Federal Government is working hard to open markets up for the agriculture sector, but global attitudes toward large multilateral trade deals are souring.
On top of that, there is a growing chorus of free trade advocates who are getting increasingly worried about global trade.
"Aussie farmers produce a great product, and there's a huge and growing demand for it in Asia, full stop," said Michael Every, head of financial markets, Asia Pacific at Rabobank.
"But at the moment the tectonic plates of global trade look like they are about to shift and when they do, no-one is quite sure what they'll look like afterwards."
US President Donald Trump's decision to dump the controversial Trans-Pacific Partnership (TPP) has caused many of Australia's agricultural exporters to turn their eyes to Asia in the hope of a Chinese-led multilateral deal.
"For the grain industry, the TPP presented some opportunity, but it wasn't the real game. The real game for the past few years has been the Regional Comprehensive Economic Partnership — or RCEP," said David McKeon, general manager of policy at GrainGrowers.