Exporters call for expansion and overhaul of ‘invaluable’ freight subsidy | Ralph-Lauren

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Australian exporters are calling on the Federal Government to extend a freight subsidy they say is vital in keeping supply chains open and protecting their businesses.

The call to extend the International Freight Assistance Mechanism comes amid projections international travel will remain on hold for the rest of 2021.

Farmers and fishers that rely on the availability of cargo space on international flights to get produce to market have seen freight costs skyrocket and supply chains disrupted during the pandemic due to the lack of regular flights.

The IFAM scheme was introduced at the start of 2020, during the early stages of the COVID-19 pandemic, and was subsequently extended to mid-2021 to reduce the impact on key supply chains.

The Export Council of Australia (ECA) is urging the government to continue the program beyond its current June end date to ensure businesses can maintain access to overseas markets.

Scheme ‘invaluable’

ECA chairperson Dianne Tipping said the program — which prioritises perishable products such as seafood, red meat, dairy and horticulture — had been invaluable for exporters.

“The agricultural products that come from the ground, that come from the sea … we have very limited time for them to go on the plate in an overseas market,” she said.

“The flights are the only way to get those products there in good condition and still have a good shelf life.

Close up picture of Western Australian Rock Lobsters.
IFAM was introduced to restore supply chains by subsidising part of air freight costs, prioritising seafood, red meat, dairy, and horticulture.(Landline: Glyn Jones)

Ms Tipping hoped travel bubbles could be established with countries such as Singapore by mid-year to help relieve the pressure caused by the lack of passenger planes.

WA Fishing Industry Council CEO Darryl Hockey said the scheme had benefitted eastern states exporters more than WA, but without it the sector would be in “really big trouble”.

“Its had a few little hiccups along the way but … it’s made a humongous difference to our industry,” he said.

“We don’t know what’s going to happen but we’re pretty confident that the Government is going to continue this scheme as long as needed.”

Scheme will secure trade

Alex Wilson is the head of sales at The Truffle and Wine Co in Western Australia’s South West.

The company is believed to be one of the largest truffle producers in the world and exports to about 30 global markets.

The business exports up to four times a week to certain countries, but last year Mr Wilson said that shrunk to once a week due to the lack of flights and the chop and change of markets during COVID-19.

However, much to his surprise, all of its produce was delivered with support from the scheme.

A headshot of a man with a vest on with a blurred background of products in the background
Alex Wilson said the company would normally export to up to 30 global markets but this year would be lucky if it could reach between 12 and 20.(Supplied)

Mr Wilson said he expected difficulties to continue this year, and with the scheme set to end at the start of the truffle season the extension would secure another year of trade for the business.

Review needed

Great Eastern Abattoir at Tammin, about two hours east of Perth, has a license to export chilled and frozen lamb, mutton, and sheep to South-East Asia, the Middle East and Africa, but stopped exporting in April 2020.

Its chief executive officer, Magriet Perpoli, supported the extension of the IFAM, but said the program needed to be reviewed and the freight rates dramatically reduced to ensure her business could be operational.

“Prior to COVID-19 and the subsequent restrictions on international travel into and out of Australia we were exporting boxed lamb to Kuwait for a cost of $2.50 per kilogram,” she said.

“Now, with the subsidy under the IFAM, it costs $4.45 per kilogram and that makes the company uncompetitive.”

The company is now in care and maintenance.

“We keep tendering to send product to Jordan, Kuwait, and Dubai,” Ms Perpoli said.

“But due to the freight rates, the exchange rate, and the fluctuating price of lamb, it has not been successful.”

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