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Reforms to play role in boosting Aust's dairy export industry

21 October, 2009

New reforms to Australia’s dairy export system will cut red tape and help improve market access in the United States and European Union, according to the Minister for Agriculture, Fisheries and Forestry, Tony Burke.

He announced the Government had overhauled the system for allocating the United States and European Union dairy tariff rate quotas.
Under tariff rate quotas, certain amounts of Australian dairy products can be exported into the US and the EU at reduced or zero tariffs, giving Australian products a trade access advantage.

They are negotiated through the World Trade Organization and the Australia-United States Free Trade Agreement.

The reforms will improve the transparency of quota administration and support small export businesses looking to grow their market share.

Changes include:

- Replacing four sets of quota access rules with a single set of rules
- Introducing an annual application process to give exporters more flexibility (previously their access was restricted if they had not used an application for two consecutive years)
- Opening the quota to new players and setting aside a small proportion of quota for small and new exporters

The old system of distributing fixed shares of quota based on historical entitlements has also ended.

Under the new dairy quotas system, exporters will receive a share of quota based on three-year rolling averages of export performance.

The new model is based closely on recommendations from the independent 2008 Dairy Quota Review panel.

In 2008-09, Australia exported dairy products worth $122 million to the United States at zero tariffs, including cheese, whole milk powder and butter.

We also exported around $52 million of Australian dairy products to the European Union, including a total of almost 6,000 tonnes of cheese.

Burke said dairy farmers were facing global challenges and work to improve export markets was another way to help the industry.

"Australian dairy has a strong reputation around the world but our farmers are affected by factors such as the global fall in dairy prices," Burke said.

"By opening up export markets and cutting red tape, we are helping to support local dairy producers."

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