Vital climate change adaptation research for Australia’s $45 billion wine industry could become a cost-cutting casualty of the federal government’s rapidly deteriorating diplomatic relations with China.
But it could also offer a way to repair those relations by supporting China’s ambitious plans for a “green recovery” from the economic impact of Covid-19.
Wine industry research grants – which are linked to grape and wine production levies – are likely to be affected by import tariffs of up to 200 per cent imposed by China on Australian wine in response to the preliminary findings of an inquiry into dumping or deliberate under-pricing. Australian Grape & Wine chief executive Tony Battaglene has made a submission to the inquiry which shows the complexities – and history – of the issues involved.
Federal trade and finance minister Simon Birmingham – who worked with the South Australian wine industry prior to entering federal politics – told Australian media the tariffs will create “real business pressures” for many wine producers.
“I wouldn’t describe [China] as a lost market, but it is an incredibly challenging market now for the Australian wine industry so long as these tariffs remain in place,” he said in a radio news interview.
“We’re going to work with the wine industry as hard as we can to try to overturn this decision by China and to try to ensure that we get those unfair and unjustified tariffs removed. But in the interim, yes, it is going to be a hellishly tough time for Australia’s winemakers.”
At an international wine conference in Portugal in 2019, Australia’s wine industry was praised by participants as a global research leader in climate change adaptation and the use of renewable energy in wine production processes.
Other climate research includes the use of drones to map heat stress and wind temperatures across vineyards; mobile phone apps to monitor water use; soil nutrient management; an online 100-year climate change atlas for vineyards across Australia; and strategies to deal with shorter harvesting seasons, known as vintage compression.
These projects are funded by Wine Australia , one of 15 rural R&D corporations co-funded by farm production levies and matching government funds. The rural R&D corporation program is Australia’s biggest funder of agricultural research, and is the country’s third largest source of research grants for universities, government research agencies and farm industry organisations.
However, funds available for wine industry research have already been affected by the devastating 2019-20 bushfires which destroyed vineyards in the Adelaide Hills and rural Victoria. Other wine regions were affected by smoke taint, which can alter the taste and reduce the quality of wine.
A recent study commissioned by Wine Australia found the industry supports around 163,790 jobs and is worth $45.5 billion to the country’s economy.
Wine Australia’s most recent export report – published on 28 October – estimates there has been a 4 per cent increase in the value of wine exports to $2.99 billion. Exports to China are worth just over $1 bn annually.
Geoff Raby, a former Australian ambassador to China, suggets the federal government’s relations with China “went from bad to worse” following prime minister Scott Morrison’s call in May for an international inquiry into the origins of the Covid-19 global pandemic.
Raby described Morrison’s call for the inquiry as “ill-judged” and said Beijing reacted with “wolf warrior diplomacy and the threat of economic coercion”.
In a speech to the National Press Club in Canberra on 11 Nov Raby said Australia’s diplomatic relations with China “had continued to spiral down” and reflected an inability to deal with China’s increasing global influence as a “a prosperous and confident” economy.
He also warned that the Australian government and its policy makers need to develop a “grand strategy” that resolves whether China is to be regarded as an economic competitor or a strategic partner in the Asia Pacific region. One of the steps involved could be a public – and diplomatic – recognition of China’s role in our own economic development, he said.
Raby stressed that Australia must work on improving relations with China and “a circuit breaker” is needed to create an opportunity to work together.
And that’s where the wine industry’s expertise in climate science could play a role. Raby suggested a major cultural event, such as art exhibition, might be a way of rebuilding relations but climate change is also an important part of China’s global and regional policies.
And, US president-elect Joe Biden has also made it clear that climate change will be a top priority for his administration.
However, the Morrison government has few policy champions in this area. In a Senate public hearing in April 2019, Wine Australia chief executive Andreas Clark was forced to defend the agency’s commitment to climate change research.
Barry O’Sullivan, a conservative Liberal Nationals Party senator from Queensland, told Clark that he “did not accept” the role of climate change in influencing research conducted by Wine Australia.
Clark explained that the R&D agency is funded by grape growers and wine producers, and they decide which research is essential.
“They’re the people who pay us and want to see results…We’re focused on the reality, what’s happening on the ground and how we can assist them,” he said.
In his National Press Club speech, Raby argued that Australia needs to send a signal to China that it wants to engage in rebuilding relations, and needs to move on from the simplistic notion that there’s a binary choice “between hostility or sycophancy”.
Wine-related climate change research could be a circuit breaker with mutual benefits for both countries, but would the Morrison government be up to the challenge? Or will ideological bluster continue to undermine diplomacy and world-leading science……
the hound 