Local dairy farmers could be left holding the bag after Russia’s decision to impose a 12-month sanction on a range of Australian agricultural products.TRENT HORNEMAN August 12, 2014 10:24am
Local dairy farmers could be left holding the bag after Russia’s decision decided to impose a 12-month sanction on a range of Australian agricultural products.
The ban also includes agri-superpowers the US and EU and will almost certainly flood the global dairy market with surplus product.
Tongala farmer Neil Pankhurst said farmers were already anxiously waiting to see the impact of the sanctions which he said would certainly “water down demand”.
After milk suppliers, including Murray Goulburn, recently announced strong opening prices on the promise of strong demand and increased competition, Mr Pankhurst now fears the price for milk solids could slide.
And if it does he said it would be only the second time in his memory the farmgate price had dropped.
‘‘The last time was about 10 years on the back of a volatile global market,’’ he said.
Mr Pankhurst said the opening price was usually soft to start, rising gradually throughout the season, but it set farm budgets for the year.
‘‘If there is a drop in the milk price it would have a massive impact for farmers. It could be felt almost immediately,’’ he said.
Federal Agriculture minister Barnaby Joyce dismissed the sanctions, claiming the lost exports – which could total $400 million in the first 12 months – could be ‘made up in a heartbeat’.
But Mr Pankhurst and others at the farming coalface have serious doubts.
Pyramid Hill grain grower and Victorian Farmers Federation president Peter Tuohey said the Russian ban highlighted the need for stronger free-trade agreements with growing economies such as China.
‘‘Russia buys $400 million of our $38 billion in food and fibre exports,’’ Mr Tuohey said.
‘‘Compare that with what China could offer us in export growth under an FTA. Australian grain, beef, sheepmeat, dairy and horticultural producers all stand to gain from an FTA with China, via the removal of import quotas and tariffs.
‘‘What’s happened in Russia just highlights the need for us to get strong FTAs in place that open more markets for Australian exports.”
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