The Impact of Russia’s ban on food imports on Australian farmers

Australian food politics has been effected with Russia announcing a year-long ban on imported beef and dairy products from Australia, the US, and the EU.
August 20, 2014

Following the Ukraine crisis, Russia has announced a year-long ban on imported beef and dairy products from Australia, the US, and other EU nations, leaving Australian farmers searching for alternative markets. 

The annual farm exports Australia makes to the Russian federation are worth $300-$400 million, leaving a huge gap as Russia bans fruit, meat, fish, vegetables, milk and dairy products in retaliation against sanctions imposed over the crisis currently unfolding in Ukraine.

Barnaby Joyce, the agriculture minister, has said that the Australian Government cannot do anything about Russia’s decision, meaning that they instead must focus on finding other markets. Although the ban may hurt farmers, Joyce suggested that the government will do what it can to ease the blow. Financial assistance will not be ruled out for affected producers, and Joyce commented that the government will ‘find alternate markets’.

The Impact on the Beef Sector

The farm sector was quite concerned about any market disruptions that may take place as a result of the news, as Australia is inherently orientated by export, with over 60% of all agricultural produce subject to exportation. However, the ban that Russia has imposed on Australian beef should not have any impact on the beef sector at all. In April of this year, Russia had already banned imports of offal and beef from Australia, and the sector quickly found markets elsewhere, including China and the Middle East.

The Impact on the Dairy Sector

When it comes to dairy, butter exports are expected to receive a significant blow, as Russia ranks as Australia’s 10th most valuable market overseas for dairy products. However, the biggest concern to the dairy sector regards the knock-on effect that may be generated due to other countries also being locked out of the Russian market. Various countries that have been affected by Russia’s retaliation, such as the US and various states within the European Union, are being forced to seek other export destinations. This rush for potential markets could therefore undermine global markets, as well as Australia’s export sales.

The Significance Overall

The National Farmers Federation (NFF) are not yet sure just how badly the Australian market could be affected by Russia’s decision, but Tony Mahar, manager of policy, suggests that it may result in lower prices for farmers. According to an economics lecturer at the University of Sydney, Dr. Mark Melatos, the sanctions could have an impact upon the global trade of farm products, with the European Union set to feel the brunt of the blow, as exports from the EU to Russia are worth around $15 billion a year.