New Zealand horticulture industry calling for expanded freight equalisation scheme to be scrapped

The New Zealand horticulture industry has called the extension of the Tasmanian freight equalisation scheme illegal under the World Trade Organisation.

The Horticulture Export Authority in New Zealand argues efforts to support Tasmanian exporters give them an unfair advantage.

“The expansion itself is not consistent with WTO rules about applying subsidies to exported products actually designated to be sold and consumed in export markets,” chief executive Simon Hegarty said.

“It gives them an unfair advantage against any other competing products, so it’s distortionary.

“Product is being sold into European and Asian markets from Tasmania and it’s getting a freight advantage that other supplying entities don’t have.

“When we first heard the domestic scheme would be expanded to the international market, we told Australian trade officials about our concerns.”

The scheme has been in place for domestic supply since 1976.

Under the scheme, the Federal Government subsidises Tasmanian farmers to help alleviate the cost of getting produce to the domestic market across Bass Strait.

The scheme was this year expanded to include goods bound for international markets as well.

Tasmanian producers receive around $700 per container to alleviate the high cost of shipping their products to the mainland.

Mr Hegarty said his organisation had no issue with support to help Tasmanian farmers get their produce to domestic markets.

But he said support for international exports was a different matter.

“The extension of the scheme clearly doesn’t fit into World Trade Organisation guidelines,” Mr Hegarty said.

“It needs to revert to where it was before the first of January this year, where it was for forty years.

“The ball is now firmly in the Australia court as far as we’re concerned, as we’ve highlighted this is outside world trade rules as we see them.

“We think other countries will look at it similar to New Zealand and we will look at all our options if nothing is done.”

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