Fed: Cairns Group plan delivers most to farmers: ABARE

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Fed: Cairns Group plan delivers most to farmers: ABARE

CANBERRA, Aug 7 AAP - A plan by free-trading agricultural nations including Australiato liberate world trade would deliver the best outcome to farmers, a new study has found.

Compiled by the Australian Bureau of Agricultural and Resource Economics (ABARE), thestudy looked at four proposals to reform agricultural trade now being considered by theWorld Trade Organisation (WTO).

The proposals covered those from the Cairns group, which Australia chairs, and thosefrom the United States, Europe and the head of the WTO's agricultural negotiations, StuartHarbinson.

Under the Cairns group, bound tariffs would be slashed by at least half and quotaswould be substantially increased, with developed countries given five years and developingcountries nine years to phase in the changes.

Tariffs over 250 per cent would all be reduced to 125 per cent, while those between50 per cent and 250 per cent would be halved.

The US has proposed similar cuts in tariffs but a smaller increase in quotas.

Europe, with support from Japan, has backed a plan that would only cut tariffs by around36 per cent.

Mr Harbinson has sought a compromise which offers tariff cuts much less than thosedemanded by the Cairns group and the US, and some changes in quotas.

ABARE said it was clear the Cairns group plans would deliver much more to Australianfarmers, and in a shorter period of time.

"The Cairns group and US proposals would be likely to deliver greater overall gainsfor wheat and coarse grains than the other proposals," ABARE said.

"A further advantage of the Cairns group proposal is that it requires developed countriesto phase in 50 per cent of the agreed tariff reductions and quota expansions in the firstyear of the implementation period.

"Therefore any gains from market access liberalisation from developed country marketswould be realised much earlier under the Cairns group proposal."

ABARE said world wheat prices would lift five per cent under the Cairns group and USplans, but just 0.5 per cent under the European proposal.

Coarse grain prices would improve almost four per cent under the US plan, just overtwo per cent under Cairns, and a little over one per cent under the European plan.

ABARE said world wheat trade would lift 2.5 per cent if the Cairns group proposalswere accepted, just over two per cent with the US plans and about 1.5 per cent under MrHarbinson's plans.

But if the European proposals were accepted, world wheat trade would barely change.

AAP sw/ldj/jlw

KEYWORD: WTO