Farmers says China’s barley tariffs will hurt returns this year, and dry start to the season adds to their woes.

WA farmers became the face of the Australian Government’s escalating diplomatic spat with China this week, forcing the State’s growers to rethink crops and scramble for new customers as its key export market was effectively closed. Cunderdin farmer Cale Beard says it is the “fear of the unknown” hitting WA growers after China decided it would impose a 80.5 per cent tariff on Australian barley following an 18-month anti-dumping investigation. The cost impost came amid growing political tensions with China after Prime Minister Scott Morrison led calls for an inquiry into the origins of COVID-19. Mr Beard and Diane Sheehan, whose farm is 150km east of Perth, say they will be tightening their belts after news of the tariff coupled with late seasonal rains triggered steep falls in the barley price. “With the price of barley dropping by $40 to $60 a tonne (about 20 per cent), that will really put pressure on margins this year, especially with the late start to the season,” Mr Beard said. “The price uncertainty is something that affects all farmers as we are price takers. “If the value of barley reduces (further), we are a bit worried about what it might do to other grain prices.” The China tariff, which will impact 3000 WA grain growers, has been tipped to create a $200 million shortfall in the State’s farm incomes. Mr Beard said his family were more than halfway through their 2020 seeding program when the barley tariff was first mooted more than two weeks ago. After realising returns wouldn’t be as strong as initially expected, they switched 40 per cent of their planned 1000ha barley program for wheat. Mr Beard said while some farmers had stuck to their planned barley programs, many he had spoken to had also reduced plantings. The Grain Industry Association of WA is assessing the extent to which the 2020 barley planting program would reduce across the State. Early indications are that barley plantings could be 10 to 20 per cent down on GIWA’s initial, pre-announcement forecast of 1.86 million hectares. “It is hugely disappointing to suddenly lose a sizeable market,” Mr Beard said. “From all the evidence, it appears to be a political move by the Chinese Government. Much of China’s claim is that Australian farmers are overly subsidised. It couldn’t be further from the truth.” Trade Minister Simon Birmingham said this week the Government would rally to have the tariff decision overturned through diplomatic channels, to avoid having to go through a dispute process at the World Trade Organisation. An appeal to the WTO could cost millions of dollars and take years to complete, without any certainty of a good outcome, key grain industry players were told by Grain Producers Australia at a phone hook-up on Thursday. A spokesman for Mr Birmingham confirmed yesterday that most of the costs of any appeal would be covered by the government. If an appeal was made to the WTO it would be done through the Department of Foreign Affairs and Trade and the majority of costs would be covered by the Government. But the industry would be required to cover some of its own legal costs and other costs associated with providing and collecting information to support the appeal. The Federal Government has taken other trading partners to the WTO, including Canada over wine and India over sugar. GPA director Andrew Weidemann, pictured below, said DFAT was preparing an options paper, expected in the next fortnight, which would give the industry and government a clearer idea of what path to pursue. “There are concerns this could take years and cost millions of dollars, but may not be successful,” he said. He said in the meantime the industry would pursue alternative markets. Until this week, China had been Australia’s biggest customer for the grain, which is used to make malt in beer, and for stockfeed. China imported a total 2.3 million tonnes of Australian barley in 2019, worth more than $950 million. Mr Morrison, Foreign Minister Marise Payne, Mr Birmingham and Agriculture Minister David Littleproud have been meeting daily to discuss the unfolding crisis. DFAT has also been scrambling to secure additional exports to Qatar, Kuwait, the United Arab Emirates, Vietnam, Thailand and the Philippines to buoy the devastated industry. It is anticipated new markets could be up and running by as early as September.