Local beef producers were clicking their heels in joy, following the recent Free Trade Agreement (FTA) between Australia and Japan.
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Under the Japan Australia Economic Partnership Agreement (JAEPA) a hefty 38.5 per cent that currently applies to frozen beef will be cut to 19.5 per cent over 18 years and chilled beef tariffs will drop from 38.5 per cent to 23.5 per cent over 15 years.
Japan is the second largest market for Australian agricultural products, and the bi-lateral agreement is expected to boost sales of Australian Beef by $5.5 billion over 20 years.
Local farmer Tess Herbert of Gundamain Feedlot runs 6000 head of cattle with her husband Andrew, and some of their livestock is exported to Japan through the Teys Australia processing plant at Wagga Wagga.
Mrs Herbert said the JAEPA has given farmers a sense of security for the future.
“For beef it’s been really positive,” she said.
“Japan is very protective of its domestic market so it really has been quite a successful breakthrough.”
“With this agreement and the recent Korea FTA, our market has really expanded.”
JAEPA is yet to be ratified but Mrs Herbert believes when the tariff cuts are implemented, they will be significant.
“Because the agreement has not been ratified it might take a year for farmers to see the effects,” she said.
“Even though the cuts (for chilled beef) are over 15 years, it is still a significant drop incrementally.”
While the JAEPA will have significant advantages for other agricultural products such as fruit and vegetables, seafood, sugar and wine, the deal fell short of expectations for dairy, pork, rice and sugarcane growers.
Craig Bruem of Engsta Holdings is a dairy farmer 15km out of Forbes and says that the JAEPA will not benefit local dairy producers.
“The changes were so insignificant and will have no bearing whatsoever on us (dairy farmers,)” he said.
“It seems someone forgot about the dairy…it would have been nice not to be forgotten but it’s not disappointing because our future market is more in China.”
In 2012-13, Australian exports to Japan were valued at $48.6 billion, accounting for over 16 per cent of all Australian exports.
