WA farm­ers to pay dearly in game of live ex­port pol­i­tics

Mar­gins are al­ready tight so it’s ob­vi­ous pro­duc­ers will be paid less for their stock, warns Jenne Bram­mer

The West Australian - - WEST BUSINESS -

WA sheep farm­ers are al­ready pay­ing the price for the live ex­port con­tro­versy — and it’s about to get tougher.

The de­ba­cle, trig­gered by hor­rific tele­vi­sion footage re­leased five weeks ago, means WA’s sheep farm­ers face lower re­turns for their sheep, ir­re­spec­tive of whether Agri­cul­ture Min­is­ter Alan­nah MacTier­nan has the pow­ers to im­pose a pause on live ex­port trade dur­ing the north­ern sum­mer months.

Recommendations in the Mc­Carthy review adopted by Fed­eral Agri­cul­ture Min­is­ter David Lit­tleproud mean an­i­mal wel­fare con­di­tions will im­prove some­what, which is to be ap­plauded, but there will be a price to pay.

New for­mu­las will see stock­ing den­si­ties fall al­most 30 per cent over the hot­ter months, yet voy­ages have fixed costs.

Ex­porters will also have to stump up for an in­de­pen­dent ob­server aboard ev­ery jour­ney, at a cost of about $1500 a day over the 12 to 22-day voy­ages.

WAFarm­ers Pres­i­dent Tony York said this would re­sult in ex­port com­pa­nies hav­ing to work out the reper­cus­sions for their own op­er­a­tions, though it may also lead to some ef­fi­ciency gains and higher care lev­els in or­der to make ev­ery an­i­mal count.

But with al­ready tight mar­gins, there’s lit­tle fat to be ab­sorbed by the ex­porters.

It will be hard to pass costs on to cus­tomers, given high com­pe­ti­tion in the mar­ket, so it’s ob­vi­ous farm­ers will be paid less for their sheep.

Peter Boyle, who farms at York and buys and sells sheep for the live ex­port trade, said he had seen the price be­ing paid for live ex­port-suit­able sheep fall up to 20 per cent since the con­tro­versy emerged, mainly be­cause of lower de­mand caused by re­duced stock­ing den­si­ties and un­cer­tainty.

In­dus­try sources say $30 less an an­i­mal — about 25 per cent less than what was be­ing paid a few months ago — is in­evitable.

Ex­porters were re­ported to be oper­at­ing con­ser­va­tively yes­ter­day at a weekly auc­tion of sheep held at the Muchea sale yards, but a week ear­lier they had no pres­ence at all. An even bleaker fi­nan­cial picture is in the frame if Ms MacTier­nan finds she does have the pow­ers to im­pose a north­ern sum­mer ban on WA ship­ments.

Clearly, if such a ban went ahead, the weaker de­mand to the tune of 200,000 to 300,000 sheep over these weeks will lead to even lower prices for farm­ers.

Although Ms MacTier­nan has thrashed out the issues with the lo­cal pro­cess­ing in­dus­try, which is rub­bing its hands with glee at the idea of get­ting its hands on this sup­ply, she con­ceded yes­ter­day that farm­ers would be paid less for their live­stock.

And the im­pact of a sum­mer ban won’t last dur­ing these weeks alone. As the Pas­toral­ists and Gra­ziers As­so­ci­a­tion and WAFarm­ers have ar­gued, WA would es­tab­lish it­self as an un­re­li­able sup­plier to cus­tomers who are spoilt for choice.

If WA tells its cus­tomers they can’t have its sheep dur­ing these months, they’re bound to go else­where through­out the year, farm lobby groups have ar­gued.

Cus­tomers could also re­tal­i­ate by not buy­ing other WA prod­ucts such as chilled meat, the PGA says.

That needs to be con­sid­ered, Ms MacTier­nan ar­gues, against the like­li­hood of a big­ger price be­ing paid if there is an out­right ban as a re­sult of the Fed­eral Gov­ern­ment’s im­ple­mented recommendations from the Mc­Carthy re­port not go­ing far enough to ad­dress pub­lic con­cerns.

Cit­ing the 2011 ban on live cat­tle ex­ports to Indonesia, she said there was a big un­der-re­ac­tion by the min­is­ter at the time to some fairly shock­ing footage.

“So there was an over­re­ac­tion of clos­ing the trade down overnight,” she said. “I’ve been try­ing to avoid that. I’ve been try­ing to say let’s not have an un­der-re­ac­tion here — in­evitably lead­ing to a groundswell of over­re­ac­tion.

“What Min­is­ter Lit­tleproud and the Turn­bull Gov­ern­ment have done here to­day is per­haps set up the cir­cum­stances where we may see (a re­peat of) the 2011 sit­u­a­tion.”

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