Australian and international farm policy news

United States farm bill still undecided

The US$500 billion US farm bill, a 1000-page document that sets out the nation’s food and nutrition policy, has been caught up in partisan gridlock for nearly two years. The indecision is fuelling uncertainty across farming communities. Washington’s stalemate over the federal budget and national debt has done nothing but exacerbate concerns for farmers.

The next version of the US farm bill was debated in the US Congress in September, 2013. The House of Representatives proposed one version and the Senate proposed another, but neither could agree on the version proposed in the other chamber. Over the next decade, depending on which version of the farm bill becomes legislation, there will be either a US$23 billion cut to food stamps by the Senate or an estimated US$55 billion cut to the food stamps program by the House of Representatives.

The House wants the new farm bill to expand the taxpayer-subsidised crop insurance program by 10%. However, the Senate has stated that if this increase were to go ahead those farmers making US$750,000 or more in adjusted gross income per year would need to pay for increases to the crop insurance program. The Senate’s proposal would also require all farmers to adopt soil and water conservation measures to qualify for subsidised crop insurance premiums.

The US$1 billion per year expansion of the federally subsidised crop insurance program, which now costs around US$9 billion annually, has proven to be more negotiable than the proposed cuts to the food stamps program. However, the Senate has reiterated the critical importance of placing stricter limits on farmers who are eligible for subsidy payments, as the Senate feels that payments proposed by the House appear to be far too generous and could possibly distort prices in the marketplace.

It has been stated that with the current deadlock in the US Congress, a two year extension on the existing farm bill is most likely to occur if both chambers cannot come to a consensus about the national food stamp program.

Woolworths phasing out caged eggs

Woolworths recently announced that it will be phasing out the sale of eggs from caged hens by 2018. Woolworths has also stated that it will not use caged eggs in any of their home brand products. 

The move is said to be a costly one for farmers, as they are being forced to change their systems. The change is likely to also be more costly for consumers, with eggs potentially becoming more expensive.

A report by CHOICE found that the average cost of cage eggs was 43 cents per 100 grams, while the cost of barn laid eggs was approximately 80 cents, and free-range eggs was around 93 cents. The report indicated that free-range eggs cost nearly double caged eggs, imposing a financial burden on consumers.

The requirement of all chicken meat producers to meet minimum RSPCA standards, will also impact on-farm operations. These standards include adequate access to water and food, adequate space, and freedom from ‘discomfort, pain and distress.’

A free trade agreement (FTA) with Korea high on the agenda

Australian Prime Minister, Tony Abbott has declared that he wants all three of Australia’s lingering free trade deals with countries in northern Asia to be signed within the next 12 months. The Republic of Korea is one of the northern Asian nations that play an important role in Australia’s beef trade and policy-makers have been discussing a Korea-Australia FTA since 2007.

Korea wants to include dispute resolution provisions in the agreement that would enable Korean firms to legally challenge Australian Government decisions. This has been a sensitive issue, which has held up negotiations and one that is currently the focus of discussion.

Despite Korea’s requirements, an FTA with Korea has become imperative to Australia’s future trade opportunities in high value products like beef. Many of Australia’s competitors such as the US already have FTA’s with Korea, and therefore enjoy a competitive advantage in beef trade over Australia. Australia is Korea’s third biggest beef export market, accounting for 123,000 tonnes of beef valued A$572 million in 2011–12.

A recent study on the issue found that Australia’s gross domestic product (GDP) would grow by A$23 billion by the year 2020 if it were to engage in an FTA with Korea, and Korea would reap the benefits of a A$28 billion growth in GDP from the trade deal.

Genetically modified organisms (GMOs) in the EU

European Academies Science Advisory Council (EASAC) recently determined that GMOs were safe for the environment and human health, a claim backed by Anne Glover (the EU’s chief scientific advisor) and the national science academies of all EU member states.

The published report concluded that Europe needs to question the widespread rejection of genetically modified crops, and details serious scientific, economic and social consequences of the current policy.

Anne Glover declared that there was no evidence supporting claims that GM technologies are riskier than conventional breeding techniques, with this view supported by thousands of research projects.

Research leaders were also careful to avoid bias from literature closely linked with industry, and to ensure accurate results. Approximately 80% of the literature used in the study was non-industry funded.  

The report also drew attention to issues that need addressing within GM policy. Some newer technologies are being classified as GM and have therefore been banned, when there is no evidence that they contain foreign species in the genes used.

Keep up-to-date with discussion on current issues in Australian and international agriculture policy via the Ag Forum on the Institute website.

Images:  Monsanto, USDA

Back to November 2013 Insights contents page.