Submission to the House Standing Committee on Agriculture and Industry Inquiry into Country of Origin Food Labelling

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1 Submission to the House Standing Committee on Agriculture and Industry Inquiry into Country of Origin Food Labelling

2 NFF Member Organisations

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4 Preface The National Farmers' Federation (NFF) is the peak national body representing farmers and, more broadly, agriculture across Australia. It is one of Australia's foremost and respected advocacy organisations. Since its inception in 1979, the NFF has earned a reputation as a leader in the identification, development and achievement of policy outcomes - championing issues affecting farmers and dedicated to the advancement of agriculture. The NFF is dedicated to proactively generating greater understanding and better-informed awareness of farming's modern role, contribution and value to the entire community. One of the keys to the NFF's success has been its commitment to presenting innovative and forward-looking solutions to the issues affecting agriculture, striving to meet current and emerging challenges, and advancing Australia's vital agricultural production base. The National Farmers' Federation's (NFF's) membership comprises all of Australia's major agricultural commodities. Operating under a federated structure, individual farmers join their respective state farm organisation and/or national commodity council. These organisations collectively form the NFF. Each of these state farm organisations and commodity councils deal with state-based 'grass roots' issues or commodity specific issues, respectively, while the NFF represents the agreed imperatives of all at the national level. Page 4

5 Committee Secretariat House Standing Committee on Agriculture and Industry Inquiry into Country of Origin Food Labelling 2 May 2014 Dear Committee Secretariat The National Farmers Federation welcomes the opportunity to provide comment on the House Standing Committee on Agriculture and Industry Inquiry into Country of Origin Food (CoOL) Labelling. Australian farming underpins domestic food consumption, and is also a significant export industry. Australian farmers produce/supply the vast majority of Australia s domestic food supply. Notwithstanding this, Australian agriculture has always had a focus on export markets. With approximately two-thirds of production currently exported and with global markets opening up, the opportunities for Australian agriculture are significant. The NFF works closely with government and other stakeholders across a number of areas to ensure Australian agriculture continues to grow and improve global competitiveness. The NFF understands that country of origin labelling is complex and there have been numerous inquiries and reviews of the issue over recent years. NFF is of the view that Australian farmers should have the opportunity to capitalise on their reputation for producing safe and high quality food by generating premiums for this reputation wherever possible. The view from the agriculture sector is that labelling can play an important role in progressing this agenda. The NFF is of the view that the current food labelling system is failing to meet its policy objective by contributing to a level of confusion among consumers, rather than informing them as to the true origins of food and this fails to support the farm sector. In short the NFF's guiding principles around labelling are that labelling laws must be practical to implement, provide consumers with an understanding of where the products comes from, not impose unreasonable costs, and must not lead to adverse trade implications. The NFF believes that Australian consumers should be provided with clear information to enable them to make informed choices about the food they purchase and consume and, as a result, we are supportive of efforts to improve understanding and clarity in country of origin food labelling. While the NFF supports voluntary measures to provide information about country of origin labelling, we also acknowledge and are of the view that this issue is not as simple as some in the community would suggest. Page 5

6 The NFF believes the current rules allow imports to masquerade as local produce, through the Made in Australia claim, while making it difficult for locally grown products to achieve the perceived premium claim of Product of Australia. The view is that this undermines Australian farmers, who are seeking to capitalise on their good reputation for animal welfare, quality and above all food safety. Existing rules for packaged food allow products processed or packaged in Australia (e.g. bacon made from imported pork or orange juice made of imported juice concentrate), to be labelled Made in Australia without indicating the main ingredient is not of Australian provenance. The problem is compounded by requirements for Product of Australia being so restrictive that some Australian grown food can t use the label due to small quantities of imported ingredients which are difficult to source in Australia. The NFF believes that educating consumers on the issues surrounding country of origin labelling and delivering marketable options to food manufacturers to entice them to leverage off the Australian image and reputation is a vital component to any discussion on country of origin food labelling. The NFF believes that any improved labelling arrangements must incorporate the fact that Australia is net food exporter and Australian must treat its food imports equitably and transparently if exporters want domestically produced food and fibre to be treated fairly in international markets. The NFF is of the view that there should be improved communication and promotion of the origin and benefits of Australian food products without disparaging or un-necessarily impacting on imports. In terms of principles that should underpin country of origin labelling the NFF supports the following: Labelling should not impose unreasonable costs Any amendments to country of origin labelling arrangements must not lead to excessive costs of implementation - costs that the NFF believes will merely be passed back to farmers in the form of lower prices for their produce. Labelling should be consistent and claims should be qualified Any revised country of origin labelling regime should include measures that underpin qualifications and/or criteria to ensure product claims are qualified. The arrangements must be consistent and transparent to provide all parts of the supply chain with a level of certainty balanced with some flexibility to ensure a comprehensive approach to the range of challenges such as ingredient sourcing, transformation of products provided to consumers. Labelling must be practical to implement and easy to understand The NFF is keen to ensure that labelling laws are not impractical to implement. For example, any changes should recognise the potential need to vary labelling in response to seasonal Australian domestic food supplies. It must be taken into account that at some times in the year it may be necessary for manufactures to import produce. As manufactures are unlikely to modify labels on a seasonal basis, requirements should not be so inflexible so as to provide a disincentive for manufacturers to utilise any form of Australian labelling and in doing so, devalue some of the benefits of striving for an Australian grown point of difference. The consumer must have confidence and Page 6

7 understanding of the claim. However, the consumer must also recognise that some (packaged or processed) products for example contain ingredients that either are not produced in Australia (e.g. Cocoa for chocolate) or can not be sufficiently sourced in Australia (e.g. Coconut). Labelling must not lead to adverse trade implications It is the NFF s strong view that labelling should not be used as a form of non-tariff trade barrier and must be WTO consistent. Under WTO rules and in particular under GATT Article 3, National Treatment, Australia must treat imports no less favourably than domestic product. For example, whatever labelling rules Australia requires on imported product we must also apply to product produced in Australia. The WTO Agreement on Technical Barriers to Trade (TBT) also requires Australia to ensure that technical regulations and standards including packaging, marking and labelling requirements do not create unnecessary obstacles to international trade. In addition, noting that Australia s number one priority in the current WTO negotiations is to significantly market access and that Australia is the Chair of the Cairns Group, Australia should avoid casting doubts over our trade liberalising credentials wherever possible. The NFF has advocated against international CoOL systems that have imposed labelling requirements on imports and in doing so have artificially restricted market access for Australian exports, purely due to implementation complexities. The NFF seeks assurances that Australian primary produce will not be compromised on international markets through retaliation for any proposed labelling measures, bearing in mind that Australian farmers rely on export markets for two thirds of their production. For more information on this submission please contact: Tony Mahar General Manager Policy National Farmers Federation tmahar@nff.org.au Page 7