April 24, 2014
The Australian peanut industry, already reeling from floods and drought, could face a bigger problem soon … a Free Trade Agreement with China.
That’s the fear of Sonie Crumpton, general manager of Crawford-based sheller and processer G. Crumpton & Sons.
Prime Minister Tony Abbott recently clinched a Free Trade Agreement (FTA) with Japan and South Korea.
He has previously stated he would like to conclude an FTA with China by the end of this year, something China is also reportedly pushing to achieve.
Mr Crumpton told southburnett.com.au that like most people he had been hearing about the trade agreements on the news without paying too much attention.
However, after a friend in the horticultural industry pointed out to him the possible consequences of an FTA with China, he was horrified.
“It will have a devastating effect on our local peanut industry which is already struggling with a series of seasons ravaged by drought and floods,” he said.
“Up until then, I honestly didn’t think it would affect me. And if you spoke to our farmers, they wouldn’t have a clue.”
Mr Crumpton said China was one of the world’s largest suppliers of peanuts and was already supplying into the Australian market at prices cheaper than Australian farmers can produce.
They will gain an even greater advantage under an FTA.
“Currently if you import Chinese peanuts there are landing, clearing and duty charges to be paid,” Mr Crumpton said.
“I believe that duty is 5 per cent.
“If an FTA is signed that duty will be removed. Currently, blanched Chinese peanuts cost about $2/kg or $2000/tonne. If the duty is removed, they become even cheaper, $1900/tonne.
“I can’t compete with Chinese prices now, and it’s going to be even cheaper again …”
Mr Crumpton queried whether the Federal Government had even thought about the consequences.
“I have not had any correspondence from any government department yet I am one of the major players in the Australian peanut industry,” he said.
Mr Crumpton said Australian farmers struggled to be competitive because the cost of production here was so much more expensive: fuel, electricity, wages and other overheads.
“It’s not really a free trade agreement is it, when Chinese workers don’t have the same working conditions?” he said.
He also questioned how a Free Trade Agreement could benefit Australia.
“We have no manufacturing left,” he said. “Everything we sell to China is resource-based; coal and iron ore.”
Mr Crumpton said he felt it was necessary to speak out because “it will just happen” unless someone says something.
However, he fears “it will just happen” anyway.
“Everyone has seen this proposal on TV and it is being presented as beneficial to Australian agriculture, however we in the peanut industry know how hard it is to compete with the imports now, let alone give them another helping hand by removing current tariffs,” he said.
“The proposed FTA is being negotiated without consultation with industry representatives and will have an enormously detrimental effect on the South Burnett.”
