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Dairy farmers hit hardest by new South Australian wine planning laws

By RJ Whitehead , 09-Jan-2013

A recent decision by lawmakers in South Australia to protect Adelaide’s two main wine regions from urban sprawl has quite literally stepped on the toes of angry dairy producers.

As the capital of Australia’s driest state, the city’s extended suburbs have increasingly been suffering from the encroachment of urban development, and alongside it the pressure for water resources.

The legislation passed by the state parliament covers 40,000 hectares of farm land in the McLaren Vale region, to the south of Adelade, and almost 150,000 hectares in the Barossa Valley to the north.

The law protects land in the zones from becoming subdivisions of housing, and removes the planning minister’s power to approve major developments without submitting to the scrutiny of parliament.

Wine to the fore

Wine, tourism and culture might drive the Adelaide economy as the most visible revenue generators, however, vocal opposition to the new laws has emerged in the form of mixed and dairy farmers.

"The laws in the bill are for landscape aesthetic beauty preservation, nothing to do with the reality of broad-acre staple food production, and they are designed to key-up tourism in the wine industry," Peter Grocke, a farmer in the Barossa Valley, told the ABC news service.

Countering this viewpoint, the planning minister, John Rau, has stressed the need for balance between urban development and agriculture. 

"It is true that there are some areas in the north of Adelaide that are closer to the city than the Barossa Valley which are presently being used for farming. However, these are marked for housing development over the next 30 years. That was a decision taken a while ago because if the city is to grow, it needs to have somewhere to grow," he said.

However, those farms are likely to be dairy, and South Australia's 300 dairy farmers are already under intense pressure with a much publicised supermarket war in Australia pushing prices down.

China the future

Meanwhile, there is a glimmer of hope for those of the region’s dairy farmers who are willing to look overseas to expand their markets.

With China having imported more milk over the last three months than across the whole of 2007, the country is ripe for an export boom.

But Australia has over the last year seen its dairy sector slip behind the United States as the world’s fourth biggest dairy exporter. New Zealand, the world’s biggest exporter with 35% of the global market, has an advantage over its antipodean cousin as a result of a free-trade agreement that sees Kiwi exporters paying just a 6% tariff, compared to Australia’s 15%. 

While New Zealand concluded its trade talks with China in 2008 after just three years of negotiations, Australia is still engaged with the Asian giant in spite of seven years at the table and still no consensus. 

Charlie McElhone, group manager of exports at Dairy Australia, told The Australian that a trade agreement would make all the difference for domestic farmers.

"That's the reality of the spaghetti bowl of bilateral trade agreements we're seeing. New Zealand enjoys a real price advantage [in China]. The US and Europe have agreements in place with South Korea and we don't have one. New Zealand had a deal with Malaysia and we've only just fixed that."

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