Australian Grains Industry Conference: Be wary of China reforms
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Australian Grains Industry Conference: Be wary of China reforms

Posted by | August 3, 2017 |

Australian grain exporters will need to be wary of new disease and import standards in China as its Government starts to implement a range of revolutionary food safety and agriculture policy reforms.

That’s according to Beijing-based Chinese policy specialist Erlend Ek who spoke at yesterday’s Australian Grains Industry Conference in Melbourne.

Mr Ek, who is a researcher for China Policy, said Chinese media reported last month a shipment of Australian grain was stopped at a Chinese port due to new ergot standards which came into effect at the end of June.

Ergot is caused by a fungus, which besides reducing yields, can also be toxic to animals and humans.

Exports generally have a maximum tolerance level for any shipments which might harbour the ergot fungus.

Mr Ek said the Chinese government’s policy on food production was moving from being self sufficient to a more market-based approach where food quality and environmental concerns have become a priority.

“They are heading toward quality; they want to be seen as a quality producer,” Mr Ek said.

Mr Ek said as a result of the “massive changes” happening with food and agriculture policy in China, hundreds of new standards have been updated.

“They have just revised 6000 national standards for food,” he said.

“The ergot issue comes as a result of this.

“It was released 23 June and on 5 July there were reports that Australian ships were stopped (as a result of this standard).”

However sources have told The Weekly Times they were not aware of a shipment being stopped, and no Australian authorities had been told about an ergot issue with a grain shipment.

But they acknowledged ergot might be an issue in the future.

Other Chinese government changes includes the winding back of subsidies and price supports for local farmers, because price levels were well above global prices, Mr Ek said.

“Support and subsidy system is reaching its ceiling in its (World Trade Organisation) commitment moving away from market distortion and price support,” he said.

This was designed to make farmers more professional, and drive efficiency through the industry.

“China is at a critical stage of a transition from planned economy … toward a modern agriculture industry.

“(The government is saying) let’s make farming professional and more of an industry, and we need to allow other sectors to invest in agriculture.”

This will involve changing the current collective ownership structure of agricultural land, to allow companies and individuals to trade in the collective ownership of land.

This was expected to be confirmed at the Chinese government annual congress later this year.

However he said there was still opportunities for Australian agriculture these included providing grain exports, but quality standards would need to be met.

“Chinese production will hit 600 million tonnes by 2020, but and demand is expected to hit 700 million so they will need imports to make up (the difference,)” Mr Ek said.

“They imported about 105 million tonnes last year, and this year (imports) will hit 120 million tonnes, most of this is soybeans.”

Source: Weekly Times. Date: 2017-08-03