Australian and international farm policy news

US Farmland values decline for third year running

The 2016 Iowa State University Land Values survey shows that average Iowa farmland values have declined for the third year in a row. The statewide average per acre for farmland is now estimated to be $7183 which is about 17.5% lower than 2013 values, when farmland prices were at an historic high of $8716. This is the first time that prices have declined for three consecutive years, and the longest and sharpest decline, since the farm crisis of the 1980s. Lenders and analysts expect the price slide to continue for a year or two.

Dr Wendong Zhang, from Iowa State University, who led the Iowa State survey said that another farm crisis was unlikely due to steady farm income accumulation before the downturn, a stronger government safety net, and overall lower debt in the agriculture sector.

Nearly 40 countries report bird flu outbreaks

Nearly 40 countries have reported new outbreaks of highly pathogenic avian influenza of various strains in poultry or wild birds since November, according to the WHO. In mid-January, Reuters reported that the H5N8 strain of bird flu has spread in Europe and the Middle East since late last year – leading to the slaughter of hundreds of thousands of farmed birds and the confinement of flocks.

According to the Center for Infectious Disease Research and Policy, the H5N8 strain was recently found in Lancashire in the UK at a pheasant farm of about 10,000 birds – several birds died, and the rest are being culled. In Italy there has been an outbreak at a turkey farm in the Veneto region for the second time – killing 254 of 22,630 birds.

In the Czech Republic veterinary authorities, in separate reports to the OIE, confirmed two H5N8 outbreaks in backyard birds and wild birds. In Croatia, the H5N8 strain has been detected among ducks on a farm 30 km from its capital, Zagreb.

Two strains of bird flu have been detected in China this winter. The H7N9 strain has infected 225 people since September, killing at least four.  An outbreak of the H5N6 strain in poultry has also occurred, with more than 170,000 birds culled since October and some live poultry markets closed.

Japan has also reported a H5N6 outbreak, at a large poultry farm in Miyazaki prefecture. Japan and South Korea have been battling a spate of H5N6 outbreaks since late 2016.

Two locations in Uganda have also detected bird flu, one in wild birds and another in domestic birds (strains unspecified). 

China to invest A$580 million modernising agriculture

In September, Chinese state media reported that the Agricultural Development Bank of China, one of China’s main policy lenders, had agreed to loan at least 3 trillion yuan by 2020 (approximately A$580 million), for the modernisation of the country’s agriculture industry. The agreement was signed between the Ministry of Agriculture and the bank, to protect national food security, support exports and develop China’s seed industry, with aims to increase the sector’s efficiency and foster rural income growth.

Trump dumps the TPP

One of Donald Trump’s first acts, following his inauguration as US President, was the signing of executive orders withdrawing the US from the Trans-Pacific Partnership (TPP) trade deal.

Australian Trade Minister Steve Ciobo says a version of the TPP, ‘12 minus one’, could still be an option for the remaining countries wishing to ratify a deal, and that he had held conversations about this with Canada, Japan, New Zealand, Singapore and Malaysia.

The trade deal would need to be revised to proceed without the US. As currently the TPP needs to be ratified by six countries comprising 85% of the group’s total GDP, with the US accounting for 60%.

British farmers grappling with post-Brexit era

The dominant issue for discussion amongst British farmers over recent months has been what British agricultural policy should be once the separation from the EU has occurred, presumably in two to three years. At present, British farmers receive up to half their annual income in the form of subsidies or payments from the EU, and this funding would obviously be the first casualty of the impending separation from the EU. There is some suggestion that the UK Government has committed to maintain that level of payments to farmers until at least 2020, but what happens after that time is very uncertain.

Adding to the uncertainty is the potential future trading arrangements that will be put in place for trade between Britain and the EU. Currently, some 75% of British agricultural exports go to the EU, and British agriculture is somewhat protected from non-EU import competition by the same trade barriers that apply to agricultural imports to the EU more generally.

Any nation with which Britain might try to negotiate a trade deal in the future is likely to insist on lower trade barriers for agricultural trade – something which British farmers have stated would be devastating for them, and in particular livestock producers. So, the post-Brexit shopping list for British farmers includes maintaining current farm subsidy levels, maintaining current British trade barriers to restrict competition from agricultural imports, and negotiating lower trade barriers for British agricultural exports.  Sounds reasonable – although British taxpayers and food consumers might not see it that way!

Image:  AWB