April 7, 2008

Australian commission rejects bid for pork industry protection

Australia's Productivity Commission has rejected a bid by the pork industry for protection from imports, saying that increased imports are not threatening the industry.

The commission's report on Friday stated that the threat may come from higher domestic feed costs, so safeguard action under global trade rules is not warranted.

The industry is experiencing a cost-price squeeze with the availability and high price of feed causing a significant increase in production costs, the study found.

Feed accounts for about 60 percent of the cost of producing a pig, it said.

High feed grain prices are not unique to Australia and make trading conditions difficult for livestock producers worldwide, it said.

Trade Minister Simon Crean said the government will consider the report carefully.

The industry argued that the significant rise in pork imports in the first half of 2007 from the year-earlier period established a case for safeguard action under World Trade Organization rules.

Pork imports accounted for about one-third of Australian consumption. The major supplier nations are the US, Canada and Denmark, which are large producers and exporters, achieving much greater economies of scale and with access to cheaper and more energy-intensive feedgrain than Australian producers, it said.