Program Overview

Background and Long-Term Strategy

Australia exports approximately two thirds of its agricultural production by value. Our competitiveness in global markets is therefore vital to the future success of the rural sector and to the livelihood of all Australians.

However Australian farmers face many impediments to their exports. Global markets for many agricultural products are distorted by protectionist policies, especially in the European Union, Japan and the United States. Average tariffs applying to agricultural commodities are more than three times those for non-agricultural goods, and some individual tariffs are as high as 800 per cent. There is also growing competition in export markets as other low cost producers such as Brazil and China expand their agricultural output.

The Uruguay Round of multilateral trade negotiations led to some important gains in reforming world agriculture. Progress in the World Trade Organisation (WTO) however remains slow and major agricultural subsidisers continue to be driven by protectionist interests in their farm sectors. Further agricultural reform is central to the current Doha Round of multilateral trade negotiations which commenced in 2001. 

Australia's negotiating strategy has been to form a strategic alliance with like-minded countries through the Cairns Group which now has 18 members and has been influential in both the Uruguay and Doha rounds.

Another important feature of the international trading environment is the proliferation of bilateral and regional trade agreements. The World Bank estimates that these free trade agreements (FTAs) now cover one-third of global trade. Such agreements may not always be beneficial because they are by definition preferential, but they are increasingly being resorted to because of the slow pace of liberalisation through the WTO, the fear of being left behind by other countries entering FTAs and a reduced commitment to the principles of free trade.

Key long term strategies

• Support analyses identifying new opportunities in the marketplace
• Develop a research program supporting the development of a more globally focused competitive food sector
• Support analyses focusing on domestic impediments to industry performance, thereby enhancing export performance and an export culture, particularly in those industries which have previously been domestically focused
• Develop options and strategies for improving global competitiveness of the agricultural sector by improving the current set of trade policies and therefore removing existing trade barriers
• Develop a better understanding of domestic and international markets for agricultural products when there is a clearly established market failure in the provision of such information
• Support analyses of the linkages between various stages in the producer to consumer chain and identify areas - regionally, domestically and internationally - where these linkages can be better integrated and their efficiency improved
• Challenge existing policies and institutions that impact on the development of a globally competitive agriculture sector