If one thing’s for sure, the Australian agriculture industry is one tough cookie, having developed great resilience from the extended drought, devastating bushfires and the current COVID-19 global pandemic. Being a farmer is unpredictable at the best of times and being an Aussie farmer can be even more complicated. In the immortal words of Forest Gump – “(Farmer) life is like a box of chocolates. You never know what you’re gonna get” – or something along those lines. We take a look at the current situation for farmers, the impacts of the pandemic, the sources of help available to farmers and how you can manage your risk to protect your farm.
How has COVID-19 impacted Australian imports and exports?
Australia’s agricultural trade has in many aspects continued unhindered by the COVID-19 pandemic. But, some sectors haven’t been so fortunate, such as those closely associated with food hospitality or those reliant on air transport. However, official trade data indicates that despite the pandemic, the majority of agricultural exports have continued to exit Australia and reach consumers in international markets. The limited impact on exports means that Australia has continued to export around 70% of its total agriculture to countries worldwide, a figure that has grown steadily over the years.
Similarly, Aussie agriculture has not been hit with a lack of access to imported inputs. Farmers often rely on imported products such as chemicals, fertilisers, machinery and equipment from overseas countries, a practice which has remained business as usual.
The steady flow of imports and exports throughout the crisis has been prominent, adding to a long history of adaptation, evolution and growth in the face of external challenges in Australia’s agricultural sector.
Increasing trade difficulties between Australia and China
While our attention has been blinkered to the COVID-19 situation, trade tensions have been unfolding between Australia and our leading importer, China. The country has announced significant trade sanctions, tariffs and bans on a number of Australian exports. It’s estimated that Aussie agriculture and produce industries will be hit with a $5-6 billion loss in exports if the rumoured sanctions are imposed.
Australian dairy exports to China have grown to be worth more than $1 billion each year, and as of yet the industry remains unaffected by increasing trade tensions. However, it is expected that much like other produce, the safeguard will be triggered this month, leading to a doubling of tariffs on whole milk powder.
With a lack of steady and set guidelines in place, farmers, particularly those which export to China or are within the supply chain of an exporter, need to be ready to adapt and restructure. Accounting for 30% of total export revenue for Australia, China is the major destination for our countries produce. The impacts on farmers and the industry as a whole that sanctions would bring are no doubt concerning.
Help for Australian farmers during the current climate
The South Australian Government has limited financial support measures in place to help minimise the impact of the COVID-19 pandemic on farmers. Your eligibility to receive grants and help during this time will depend on factors such as the size of your business, the financial hardship you are facing and the extent to which you have been impacted by the pandemic. You can view the current assistance for businesses here.
With limited numbers of working tourists residing in Australia this year, the Government has intervened to offer Aussies up to $6000 in cash for relocation expenses if they head to the bush for farm work. The assistance is part of new government incentives for Australians to fill agriculture’s worker shortage. It’s hoped it’ll help to attract school leavers and university students looking for an adventure on their summer break.
Risk management for Australian farmers
As a farmer, you have little control over the external influences that are continuously shape your operations. One of the best ways to manage your risk and protect your farm is by ensuring that you have appropriate insurance solutions in place for when the unexpected happens.
We can help to protect your farm
Whether you’re a dairy farmer, fruit grower or broad leaf cropper, we have some of the market-leading insurance solutions available to tailor to your needs, and we also have some of the best value covers for your vehicles and machinery. We have policies to suit everyone. While we can’t predict a pandemic or increasing trade tariffs, we can be there for you and make sure you have the best cover in place to minimise the damage.
Talk to us about your farm, stock & crop insurance needs: contact us.
General advice warning
The information above may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.
Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.