Australian farmers are grappling with significant losses amounting to billions of dollars annually, primarily due to non-tariff barriers in the grains industry. The country is on track to export more than $74 billion in food and fiber this year. Major hurdles are affecting almost three quarters of the Aussie farm-gate value exported overseas, adding brutal headwinds.
These experts have highlighted how non-tariff barriers are the biggest challenge for Australian exporters. Stringent chemical residue levels and prohibitions on the inclusion of weed seeds with shipments pose enormous hurdles. Non-tariff measures can serve respective valid purposes, as Dr. Jared Greenville illustrates clearly with his example of sanitary and phytosanitary measures. He cautions that they’re not always used for the right purposes. Over the last 10 years, these barriers have become exponentially severe. They’ve put a 6 percent tariff on Australian exports in most other markets.
Understanding Non-Tariff Barriers
Non-tariff barriers cover a wide universe of requirements and standards established by those countries receiving imports that can hinder, delay, or obstruct the sale of goods. Of these health certificates for dairy products are in particularly high demand. Grain exports are subject to zero chemical residues as a strict import requirement. Rebecca Reardon, another industry expert, highlights that many of these demands place unreasonable cost and time burdens on exporters.
“While there are good reasons to have them, they’re not always used for those good reasons.” – Dr. Jared Greenville
Today the average equivalent tariff rate has increased from 1.5 percent to an astonishing 19 percent in a mere ten years. At the time, Australia was defending over 1 million non-tariff measures in its trading relationships in 2014. By 2024, that number is predicted to grow to a staggering 14 million. Given this unprecedented boom, it’s worth asking what’s really driving the need for such protective measures.
Economic Implications for Australian Farmers
The economic consequences of non-tariff barriers are dire. Heritage Foundation estimates indicate that these regulations have subtracted an estimated $4 billion per year from the value of Australia’s agricultural exports. In her work, Reardon emphasizes that the impacts of these barriers are often not clear to farmers.
“It does affect farmers. It’s not in our face. We don’t see it and most farmers, or many farmers are not actually even aware of these non-tariff barriers but they are affecting the return to farmers by the fact that we’re not accessing certain markets, which might be the best returning market.” – Rebecca Reardon
These barriers add significant costs to the supply chain and create more uncertainty for exporters. They act as a barrier for importing countries. This keeps both their food supply secure and local farmers protected. As Reardon points out, “At the end of the day, most countries are net importers, so the reason they are doing these non-tariff barriers is because it is protectionism; they’re protecting their food security and their farmers for the future.”
Recent Developments and Future Outlook
This increasing trend of non-tariff measures has alarmed industry stakeholders. This year, Donald Trump has levied a 10 percent tariff on imports from Australia. Consequently, the agricultural industry went through a lot of chaos. These developments highlight that Australian farmers continue to face rapidly changing headwinds as they open up new frontiers in tackling a more challenging and complicated global trade landscape.
Internal Agricultural Trade Reardon warns that some specialty grains are subject to non-tariff barriers like quotas of up to 40 percent in some markets. In light of these figures, the critical need for conversation in international trade practices could not be clearer. Reform is sorely needed to provide relief to Australian producers.
“Some of the figures that are coming out of this Grains Australia report are showing up to 40 percent (non-tariff impost) for some particular grains in some particular countries, so that’s enormous.” – Rebecca Reardon
As Australia looks to further grow and diversify its agriculture exports, it will continue to be vital to tackle these non-tariff barriers head on. The future competitiveness of Australian farmers depends on their freedom to supply attractive export markets not burdened by damaging overreach.
