Australia-China

Minister: Australia’s “food bowl of Asia” no threat to Chinese farmers

By RJ Whitehead

- Last updated on GMT

Related tags: Australia, Investment

Agriculture Minister Barnaby Joyce
Agriculture Minister Barnaby Joyce
Agriculture minister Barnaby Joyce has assured Chinese farmers that Australia is “not a threat” to their livelihoods on a day when two Far East investment groups established a A$3bn (US$2.7bn) fund to invest in Australian agriculture.

Joyce is touring China in a bid to assuage local farmers’ fears over Australia’s ambition to be the “food bowl of Asia​”, a position that threatens to stand between the two countries as they attempt to reach a conclusion to talks over a free-trade agreement.

Recently, the Australian government has softened its food bowl rhetoric, instead choosing to focus on the country as a supplier of premium produce. 

‘Not a hope in Hades’

"We are not a threat​," he said in Harbin, the capital of a major agricultural region in China's north-east.

"The people of China can rely on the fact that Australia doesn't have a hope in Hades of feeding the whole of the Chinese population—not even a portion of it​.”

Joyce added that even if Australia were to double its agricultural output, the produce would still only be enough to feed 120 million people—less than one-tenth of China’s population—while still supplying other regional growth economies like Indonesia.

Meanwhile, a joint partnership between state-owned Beijing Agricultural Investment Fund and the Shenzen-based Yuhu group is looking to acquire a sizeable chunk of Australian agriculture.

The two groups have formed a A$3bn investment vehicle that aims to focus on supplying produce back to China, especially infant milk formula, beef, lamb and seafood.

The so-called Beijing Australia Agricultural Resource Cooperative Development Fund has drawn the praise of Australian trade minister Andrew Robb, who said: "It's a great signal that the Chinese investors are looking, in a fairly significant way, to position themselves in Australia, and they are doing it in a sensible way​.”

Robb’s comments came at a dairy industry forum he was attending in Melbourne, and followed a speech in which the minister seemed to downplay the benefits dairy would gain from a free-trade agreement with China.

Dairy softening in FTA talks

He hinted his view that Australia would benefit more if FTA discussions were simply agreed  ahead of Chinese President Xi Jinping's state visit in November than if the dairy industry held out for a better deal. 

"In regard to trade negotiations, my starting position is to seek full liberalisation across every sector, but these are negotiations​," Robb told industry representatives.

"There are always sensitivities on both sides and you rarely get everything you want. To further delay will only exacerbate the ­advantages our direct competitors have, including most ­relevant to you, New Zealand​.”

While dairy might not get the deal it has sought over the last 10 years of negotiations, Robb suggested the benefits for wider agricultural exports would dwarf its concerns.

"I am not for a moment diminishing the importance of dairy, but simply illustrating the more diversified nature of our economy compared to that of New Zealand​," he added.

New Zealand has grown its dairy trade revenue with China by A$3.7bn (US$3.33bn) since it concluded its FTA with China in 2008, whereas Australian dairy trade revenue with China has increased by A$173m (US$156m) over the same period.

Related topics: Markets, Emerging Markets

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