The Department of Agriculture under a Coalition Government would move from being simply a regulator/governor to actively supporting exporters in delivering better trade access and regulatory outcomes, shadow agriculture minister John Cobb told a NSW beef gathering on Friday.

Speaking during a beef seminar held as part of the Primex field days in Casino, Mr Cobb’s message provided plenty of cause for optimism among the gathering – mostly made up of producers, but also including exporters, processors, feedlot operators and supermarket retailers.

Despite the encouraging words, however, execution will be the key.  

“I’m terribly optimistic about prospects for agriculture, but beef in particular,” he said.

“It’s a commodity that our closest neighbours every day are developing more and more of a taste for. Sure, North America and North Asia are important markets for us, but our future really lies with the growing middle-class that lives near us – and increasingly they are moving from buying on price to a higher quality product.”

“We’ve all heard about the potential in Asia for our entire life, but it’s only in the past decade that it has started to come to fruition. It’s happening in China, but I personally believe that Indonesia, also, will play an increasingly important role as a destination. There are 400 million people in Malaysia, the Philippines and Indonesia, who also happen to be our closest neighbours,” Mr Cobb said.

“Eating good red meat is a very seductive thing, and that part of the world has never had much assess to it, up to now.”

Mr Cobb said sovereign risk remained one of the big challenges facing food exports.

“Sovereign risk means the people who trade with you have a worry about what government actions might do to disrupt trade,” he said.

Australia had not experienced the effects of sovereign risk until recently, but what was happening in Korea (stalemate in Free Trade Agreement negotiations) and Indonesia (government-imposed quota limits on beef and live cattle exports) had certainly raised it as an issue with those involved in those trades.

“It’s something we have to, and will deal with,” he told the gathering.

“But it won’t happen until the Indonesian Government changes, as well as Australia’s. When the Indonesian presidency changes next year, as it has to, so to, will all the Indonesian government ministries.”

“We believe the ‘sustainability/self-sufficiency’ agenda of the current Indonesian Government will not be such an issue in future, and Australia needs to be out there from day one, after September 15, to establish the new relationship,” Mr Cobb said.

He said the Indonesians were ‘chuffed’ that Australia’s next Prime Minister, Tony Abbott, and his deputy, Julie Bishop spent a day going right through the Indonesian feedlot/abattoir supply chain process during their recent Indonesian visit.

“We do have to deal with those issues, and will start from day one, working out who the people will be who are in power in Indonesia in 12 months’ time, or even less, and starting the process.”

Cost of doing business

Mr Cobb said the coalition was ‘totally committed’ to dealing with the issues surrounding the ‘cost of doing business’ right across the farm commodity supply chain.    

The government had far more ability to deal with the cost of doing business, than it did over the price for the product received in international markets. Dissolving the controversial Carbon Tax was the starting point.  

“We’re committed to doing away with the Carbon Tax, even if it means a double dissolution to do it – if we can’t get it through the Senate, we’ll have a second election so that we can repeal the tax within six months,” Mr Cobb said.

Even within the beef industry, the carbon tax was costing processors an extra $3 a head to slaughter – and that did not take into account refrigeration, transport or other phases impacted by the tax.

“It affects everything,” he said.

Trade access critical

Whether it was dealing with China, Korea or Japan, trade access was an enormous issue for beef, and Australian agriculture generally, Mr Cobb said.

“What has become very obvious over the past two years is that the Gillard Government and the department have become ‘regulators’ rather than ‘assistors’ to the industry,” he said.

“Whether it’s a meat company trying to do trade into China, or government-to-government relations in building trade agreements, the department of agriculture under a coalition Government – and particularly if I am the minister – will be totally dedicated to working with industry to help it, rather than simply tell it what it can, and cannot do.”

“DAFF will actually ‘get dirty’ alongside the industry in trade access issues, in going to international markets to free-up trade restrictions or regulatory hurdles.”   

“It (DAFF) is going to change its approach from being simply a regulator to being a part of the industry, which has to return to profitability. That is the long-term aim: the industry cannot deliver food security, sustainability or effectively tackle environmental challenges if it is not profitable.”

“Productivity is not the big issue: the issue is ‘profitable’ productivity. There is no point producing more if you are losing the same amount,” Mr Cobb said.

“Profitability first, second and third, and then everything else will fall into place.”

Building industry confidence and morale

Responding to a question, Mr Cobb said an important challenge within agriculture generally was building confidence and morale among stakeholders.

“We have to re-invent the nation’s, the Treasury’s and agriculture’s own belief in itself,” he said.

“In the same way that I want to make sure that the department realises that it is there to serve agriculture, we all have to realise just how much agriculture underpins the Australian economy. Bringing the cost of doing business down is the start, and the carbon tax elimination will be at the forefront of that.”Words will go here

See a video of John Cobb's comments at Primex field day here: