This week we have seen the imposition of tariffs on Australian barley which will impact prices over the coming 12 months.
It is a timely reminder that Tasmanian agriculture is fundamentally a commodity-based sector, that is many of the products we produce are commodities that are traded on a world commodity market. This includes everything from dairy through to red meat and cereals and they are all subject to the economic vagaries of such a trading market. These markets themselves are vulnerable to geopolitical posturing and have been used in the past to exert pressure on individual countries for political outcomes.
As farmers, we need to be critically aware that some event or comment on the other side of the globe can be devastating for one or more of the commodities that we produce.
Events that on the face of it appear completely unrelated can and often do have a very real impact locally, it is fair to say that those impacts are not always negative, however in the current climate perhaps that is not the case.
We need to be engaging with our trading partners in a way that allows us to have disputes or differences, but at the same time acknowledges the shared economic objectives of sound trade relationships. Such an approach ensures that we can avoid damaging and potentially irreparable schisms that do our farmers no favours whatsoever.
Tasmanian agriculture recognises that a commodity only based sector has structural vulnerabilities and to inoculate ourselves against these we need to embrace diversification. This has two elements, firstly as a State, we need to revisit our market diversification to spread the risk, in other words, find other markets and expand our options.
Secondly, we need to review our product mix, move elements of our enterprises away from the standard commodities, and look to more innovative and financially rewarding production. Over recent years we have seen this with a surge in horticulture within the state, both in field crops and covered cropping. This type of initiative and forward-thinking is what will be required as we rebuild our state and sector on the back of COVID 19.
This pandemic has allowed us to review many aspects of our lives and given us the opportunity to reset the benchmark on a wide range of issues, from health through to how we work into the future. There is also an opportunity to review the fundamental structure of Tasmanian agriculture and see if it is still fit for purpose in a post-COVID-19 world.
- Peter Skillern is the chief executive of the Tasmanian Farmers and Graziers Association.