FTA campaign misguided

THIS week, I was shocked by the way in which the National Farmers’ Federation (NFF) and some of its members have engaged in the debate around the China-Australia Free Trade Agreement (ChAFTA).

My reaction was on several levels and I will step through them because they are demonstrating yet again why increasing numbers of people in regional Australia refer to them as No Family Farms.

The NFF launched a negative campaign attacking the credibility of the unions. The campaign accused the unions of lying about the threat to Australian jobs and trade qualifications and suggested they were xenophobic. Independent analysis suggests the union claims actually have merit.

I have little time for the modern union movement because it has acted with great prejudice against small business in my view. However, launching a negative campaign against an already hostile and far better resourced and generally more organised and political powerful lobby is plainly stupid.

Small business, agriculture and manufacturing in this country have been severely damaged by the unending demands of the union movement in their pursuit of a better deal for workers from big business. Common sense left the building a long time ago and organisations like NFF should, in theory, be working hard to foster better understanding within the union movement of what our sectors need.

The real problem I have with the NFF is that they demonstrated their partisan alignment. They engaged in a scare campaign that for all intents and purposes could have been scripted by the Liberal Party. It demonstrates that they are too close to the Coalition. It demonstrates that they are not able to be objective in regards the assessing the merits or risks of the ChAFTA for its constituents, primary producers.

The NFF has become a pathway for aspiring politicians. Indeed our current Trade Minister is a former staffer of the NFF. Now we have a CEO who has engaged in a negative action that does nothing more than endear him to the Coalition and hurt the political credibility of our highest lobby.

The simple truth is that we have been trading with China for many, many years and our opportunities for trade have grown without a “free” trade agreement. China needs our agricultural product and will need increasingly more of it irrespective of the existence of an FTA. While the ChAFTA is spruiked as a great accomplishment by the Trade Minister, it is really an indication of Chinese awareness of their own food insecurity.

At face value there are a great number of indicative wins for agriculture in tariff reductions. These are of course very welcome, but tariffs are only part of the in-built Chinese protectionism. Indeed, the ChAFTA specifically mentions quotas and discretionary safeguards for China to still control the growth of Australian trade. The underlying enabler of our trade opportunity is still dependent on Chinese controls.

However, there are elements of the FTA that pose a significant threat to future generations of Australian farmers as the easy flow of Chinese capital into agricultural assets puts farm ownership out of reach for many aspiring entrants. My own family has now been forced to sell their enterprise to foreign investors simply because there were no Australian buyers who could compete. In the short-term it was the best option for my family, but at an industry level it is disturbing.

My comments on foreign investment/ownership are not xenophobic. The problem is that we have a Trade Minister who fundamentally doesn’t understand the value of agricultural land to the country or the impact its aggregation in foreign ownership will have on regional communities.

Mr Robb declares that in all his years he has never seen a foreigner take an Australian farm away. The irony is that is exactly what is happening every time we export something. All the nutrients and water and resources invested in the export product is taken away a little bit at a time. While my literal interpretation is perhaps a reach for some, the real thing we sell when we sell our land, are the future profits from it.

Agricultural land is a perpetual asset and selling it to foreign investors means we deprive future Australian agriculturists and the country generally of the opportunity for prosperity that comes from the ongoing agricultural enterprise of the land. In short, foreign investors don’t take the farm offshore, they take its wealth offshore.

Aside from the foreign ownership issue, the majority of the benefits of the ChAFTA will be captured further up the supply chain and relatively small proportion of the benefits are likely to flow through to the majority of farmers. Some will benefit in the short-term, but the longer term ramifications have not been discussed by both government and our farm lobby who seem devoid of real vision for the sector.

The NFF has long lost its perspective and understanding that agriculture is dominated by small business units and the future prosperity of this nation depend on their viability today. Personally I am nonplussed about the ChAFTA, but I am incensed that the NFF has sunk to poorly informed politics. This demeans its reputation and further harms its prospects as a viable lobby.

The current devaluation of the Australian dollar is a far more valuable and meaningful boost to agriculture. The NFF should be striving to enshrine fiscal policy objectives in both sides of government that keep downward pressure on our currency. As great as the perceived benefits of the ChAFTA, further reductions in our exchange rate will be far more meaningful at the farm gate, particularly as China devalues its currency.

Incidentally, the lower currency revitalises the competitiveness of other key sectors in the economy including the manufacturing sector. Ultimately, the NFF would deliver far more benefit to farmers, working with the unions to push for tighter fiscal policy to bring down the dollar and save and/or create manufacturing jobs particularly in the food processing sector.

The NFF is struggling for relevance trying to reinvent itself, but in that process it must distance itself from the Coalition and big business. Otherwise they will continue to earn their No Family Farm tag indefinitely.


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