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Aussie growers hungry for TPP challenge

7 March 2016

Eugene Tschaut, head of finance at Oz, said demand for blueberries has grown rapidly in recent years, as word spread of the fruit's antioxidant effects. The group expects to complete construction in June on a AUD $12 million, 6,500-sq. metre distribution center. With the latest packing equipment from New Zealand, it plans to double shipments of the fruit over the next three years.

Australia has recently concluded free trade agreements with Japan, South Korea and China, reducing or eliminating tariffs on most agricultural products with these trading partners and giving a boost to the country's growers.

Tschaut predicted blueberry exports to Asia will rise as people in the region become more health conscious. He said the cooperative's members "do not want to be taken advantage of by large domestic supermarket chains, so they want to expand the overseas sales channel."

Australia is heavily dependent on agricultural exports, with 65% of total farm output sold overseas. Beef is a frequent topic of discussion in Australia's trade negotiations, but farmers specializing in highly profitable niche products such as blueberries are also keen on liberalisation.

The Australia-Japan economic partnership agreement took effect in January 2015. Andrew Robb, Australia's former trade minister, said in January of this year that over the previous twelve months the country's fresh grape exports to Japan rose tenfold, while asparagus shipments were up 40%. The tariff cuts created new opportunities "in emerging areas where we were previously not competitive and had no market share," as well as making the country's traditional exports even stronger.

Upsides, downsides

Trade liberalisation opens up opportunities for farmers in overseas markets, but also exposes them to competition with other exporters. After the Trans-Pacific Partnership free trade agreement takes effect among the twelve participating countries, including Australia and Japan, competition in Asian markets will be even tougher. Australia is increasing its asparagus exports to Japan, for example, but other TPP members such as Peru are hoping to do the same.

It is too early to say whether the small blueberry farmer on the Coffs coast will be able to cope, but they are not afraid of change. State-level officials speak of a "yellow-to-blue revolution." The coastal region is known for growing blueberries today, but until five years ago Coffs Harbour was better known in guidebooks as a banana-growing region. Local growers were willing to embrace a new challenge, seeking more profitable opportunities with a different product. The TPP agreement may present still more challenges and opportunities.