Russian ban unnerves Aus farmers

Russian food imports from Australia contribute roughly $400 million to Australia’s economy each year, the NFF said.

The year-long ban affects imports on beef, pork, fruit, vegetables, poultry, fish and dairy products from the EU, US, Australia, Canada and Norway. Russian Prime Minister Dmitry Medvedev said yesterday. Russia is one of the world's largest importers of food.

Agriculture Minister Barnaby Joyce admitted the year-long ban will hurt farmers but said the government will try to minimise the impact, while not ruling out financial assistance for affected producers.

"I know this is something that's going to cause hardship in the country for rural producers," he said to media on Friday.

"I would hope we're able to manage it without assistance... But we will try and work around it and find alternate markets," Mr Joyce said.

Shadow Agriculture Minister Joel Fitzgibbon said the ban on Australian farm exports to Russia could not have come at a worse time for primary producers fighting the ongoing impacts of drought.

“I don’t know all of the consequences, and given that commodities from other countries will be flooding other markets now as well, chances are the consequences of this action could be significant for Australian producers,” Mr FItzgibbon said.

The Minister said it was important to keep all lines of communication open and cancelling Mr Putin's invitation to the G20 Summit would not help matters.

"You can't resolve an issue with someone you're not talking to."

NFF president Brent Finlay said the farm sector was concerned about any market disruptions as Australia is inherently export-orientated, exporting more than 60 per cent of its agricultural produce.

However, Russia's ban on Australian beef will have zero effect on beef exports - Russia had already banned imports of Australian beef and offal in April.

The April ban came because Russia claimed to have detected the growth hormone trenbolone in "several shipments" of Australian beef. Despite behind the scenes diplomatic activity, the ban has not been lifted, making today's announcement somewhat hollow.

An MLA spokesperson said that when the April ban came down, beef that would have been destined for Russia quickly found a new market in China or the Middle East, with little interruption to beef exports overall.

Australia exported about 30,000 tonnes of beef to Russia in 2013, a 21 per cent decline on the previous year as product was increasingly diverted to more valuable markets like China and the Middle East. That trend was expected to continue this year, and it has, thanks to Russia's dual bans.

Mr Finlay said while some Australian farmers would "directly feel the effects" of the sanctions, the severity of total impact to the farm sector was yet to be determined.

“Firstly, the Australian government needs to seek greater clarity on the details of the ban and determine what this may mean for the sectors affected.

“Secondly, we need a strong commitment from the Australian government to work closely with the farm sector to facilitate the movement of produce to alternative markets, which would have otherwise been exported to Russia.

“As it stands, a key concern for Australia will be around the global marketplace and the flow-on effects to the Australian farm sector, a cornerstone of the Australian economy.

"As the ban was placed on a number of key western trading partners, we may see increased competition from these players affected by the ban, as they look to sell their products to other markets.

“With more produce potentially coming onto the market, we may see a shift in current supply arrangements and, in the worst case scenario, a drop in prices for Australian produce – ultimately hitting the back pockets of Australian farmers.

“More broadly, this reiterates the NFF’s call to ensure bilateral trade agreements with other nations have commercially meaningful outcomes and the need to further develop relationships with other trading partners during this period,” Mr Finlay said.

Butter exports are likely to be big loser in the dairy category, with Russia ranking as Australia's 10th most valuable overseas market for dairy products.

But more concerning to the dairy industry is the potential knock-on impact of other countries also being locked out of the Russian market by Moscow's decision.

Various countries on Russia's embargo retaliation list, including big dairy producers such as the US and various European Union States, are likely to seek other export destinations to take their surplus output, potentially undermining global markets including Australian export sales.

Last financial year Russia bought 22,000 tonnes of Australian dairy product, mostly butter, worth of around $112 million. The marketplace is not big, especially compared to our other destinations, particularly in Asia.

Russian buyers take only about four per cent of Australian dairy exports and are our 12th largest dairy export market by volume .

However, Australian Dairy Industry Council (ADIC) chairman Noel Campbell said Russia was still an important market for the industry. He said Australian dairy farmers and processors stood to financially impacted due to the ban, while Russian consumers would be denied access to the high quality and safe products produced here.

Russian Agriculture Minister Nikolai Fyodorov has flagged increasing imports of New Zealand cheese and butter to offset the newly prohibited items.

He also said Moscow was in talks with Belarus and Kazakhstan to prevent banned western foodstuffs being exported to Russia from the two countries.

Mr Campbell hoped the Australian and Russian governments could "remain in open dialogue and resolve these matters quickly."

The ADIC was working with the federal government to better understand the situation and its effect on Australian industry and dairy farmers.

"We also note and appreciate the comments from Minister Bishop that the government will seek to minimise the impact for affected industries," he said.

The Chamber of Commerce and Industry Queensland (CCIQ) strongly criticised the decision from Moscow, noting the timing of the ban on Australia's national day of mourning for MH17 victims was in poor taste.

“The Russian market represents Queensland’s 18th largest export destination so this is not an insignificant announcement,” CCIQ general manager of advocacy Nick Behrens said.

“However, CCIQ believes it is important to keep in perspective that any dollar costs resulting from a trade embargo pale into insignificance compared to the loss to victim’s families and their friends.

“The announcement from Vladimir Putin is a shocker and it’s incredulous that a country at fault is not only failing to take responsibility for its actions but is seeking to exacerbate its relationship with Australia through this reckless decision.”

The Pastoralists and Graziers Association (PGA) of Western Australia also condemned Russia’s ban on Australian agricultural products.

“This full embargo is clearly a political move, and it is unfortunate that the biggest losers in this will not only be Russian consumers who will now pay more for their food , but also West Australian farmers and pastoralists who will lose access a very lucrative and vital market,” PGA immediate past president Rob Gillam said.

“This wide ranging embargo... is a result of the limited sanctions imposed on Russia by the West, and the Australian government needs to ensure that our access to other alternative markets are not compromised as a result of this game of political one-upmanship.”

“The Russian market is worth over $700 million to Australian farmers, with live cattle exports worth over $55 million, so it is imperative that we secure additional markets for these products.”

Follow the unfolding reaction here: