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Farmer turmoil as China’s hunger for Australia wanes

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Amid global trade tensions, the Morrison government has welcomed the European Union’s support for an independent inquiry into the coronavirus — which increases the chances that a probe will be backed in a vote at a meeting of the World Health Organisation on Monday.

Foreign Affairs Minister Marise Payne said an inquiry would help the “international community to prevent and counter the next pandemic”, and Mr Birmingham said it would be the “least the world should expect when so many lives have been lost and disrupted”.

China is turning its focus inward on food production with policies like the “make north-east China great again”, launched in 2003.

Yun Jiang, a researcher at the Australian National University’s Australian Centre on China in the World, said: “China’s effort to increase domestic food supply means that Australia’s agricultural exports may be affected.”

Agriculture Minister David Littleproud said while he and Mr Birmingham “have been clear we don’t agree” with the issues raised by China, Australia had to “accept they want to investigate”.

“Everything has to be treated on its own merits. The only way to advance our position is to be fair, and try to understand the issues which China has raised in these disputes,” Mr Littleproud said.

China is our largest export destination overall, and the most lucrative destination for many individual commodities such as wool, beef, dairy, cotton and wine. Western Australia’s rock lobster fishermen send 98 per cent of their catch to China.

National Farmers’ Federation president Fiona Simson said farmers were realising the risks associated with dependence on China, but she wanted the government to maintain market access. China doesn’t only offer a vast customer base, but also high returns through its middle class consumers who pay top dollar for Australia’s well-regarded produce.

“China offers, quite regularly, an increased price for our goods compared to other markets and we expect the government to continue to work very hard on it,” Ms Simson said. “Some of our commodities are heavily exposed and dependent on China. They [farmers] are reassessing their level of engagement and making sure they have options.”

Dairy is particularly exposed to China, which takes 33 per cent of Australia’s exports valued at $1 billion a year. Last Tuesday industry representatives called a snap meeting with the federal agriculture minister after beef exports were hit.

Hundreds of dairy farmers have left the land in recent years after battling through years of drought, tight profit margins and supermarket price war resulting in $1 dollar a litre milk. Last year the industry lost 500 farmers across the country.

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Dairy farmer Malcolm Holm said the dry weather has broken and he’s in for a “cracking autumn” on his Riverina dairy, near Deniliquin. After finally receiving some solid rainfall after several dry years “the country is looking really good”, he said.

“The dairy industry hasn’t had any clear air for years and years. And the recent drought has just exacerbated that. Farmers have felt the pressure whether they’re in the domestic or export market,” he said. “In our region (Deniliquin) around the year 2000 we had 200 dairy farmers. Now we’re down to 40.”

China’s waning enthusiasm is also in declining investments in Australian agriculture, fisheries and forestry – which fell $1.35 billion in 2018-19, according to figures from the Foreign Investment Review Board (FIRB). Investment totalled just $251.9 million in 2018-19, down from $1.6 billion the previous financial year.

China’s ranks fifth in overall investment in Australia behind the US, Canada, Singapore and Japan which in the annual report released last week FIRB chairman David Irvine attributed to “a range of factors such as China’s internal domestic policy settings including increased scrutiny of outbound investment and stricter capital controls”.

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