Market development support for Australian exports is widespread. Most agricultural export promotion is conducted by producer organizations funded by mandatory assessments collected under statutory authority. The funding for these producer organizations is estimated at $102.5 million in 1994/95. In recent years, the Australian government increased its support for export market promotion, particularly for high-value agricultural products, although government funding will be reduced in future years. Australian government grants for agricultural export market promotion are estimated at $34.5 million.
Major Australian producer promotion boards include the Australian Wheat Board, the Australian Dairy Corporation, the Australian Meat and Livestock Corporation, the Australian Dried Fruit Board, the Australian Horticultural Corporation, the Australian Wine and Brandy Corporation, and the Australian Wool Research and Promotion Organization.
Australian government support: The Australian government supports export promotion directly for all industries through the Australian Trade Commission (AUSTRADE) which has domestic offices and offices in 50 foreign countries. (Funding for AUSTRADE offices is not included in Table 1). Australia also formed a trading company in Japan through AUSTRADE to promote Australian-origin processed food products.
Key Australian government export promotion programs include the Export Market Development Grants Scheme (EMDG) and the Innovative Agricultural Marketing Program (IAMP). The EMDG allows companies to obtain a grant of up to A$250,000 ($195,000) a year to offset marketing costs incurred when entering or developing export markets. To be eligible, companies must be generating less than A$25 million (US$19.5 million) in exports and have incurred at least A$30,000 (US$23,400) in costs. The EMDG paid A$197.6 million to 3,497 claimants in 1994/95, of which an estimated 20 percent went to agricultural firms (about $30.8 million). This is very slightly more than EMDG grants in 1993/94. The Australian government also approves EMDG grants for producer boards.
In its recent budget, the government of Australia announced future cuts in the programs administered by AUSTRADE, including the Export Market Development Grants Scheme. The program, valued at A$200 million (US$156 million) annually, will be reduced to A$150 million ($117 million) annually for the next four years. In addition, future EMDG grants will be tailored to small- and medium-size exporters, and tourism providers will be eligible for grants for the first time. Agriculture's share of future EMDG grants is uncertain.
The IAMP provides financial assistance to producers, processors, manufacturers and marketers in the agricultural forestry and fishing industries who have innovative projects with sound potential. Much of the funding goes to market research and business-oriented activities. During 1994/95, 16 projects were supported with committed funding of A$4.68 million ($3.7 million). Committed funding for IAMP in 1994/95 also was slightly less than in 1993/94.
The Australian Wheat Board (AWB): The AWB is a statutory marketing board with authority through 1999 to sell all wheat for export. The AWB handles 60-80 percent of Australian domestic wheat production. Funding for the Board, estimated at $2.5 million in 1994, comes primarily from domestic and export sales, although the AWB's investment fund, the Wheat Industry Fund, is financed by a levy on producers of 2 percent of the farm gate value of sales. The Australian government contributes funding of up to 0.5 percent of the gross value of wheat production for research. (This government expenditure is not included in Table 1 because it assists commodity research rather than promotion.)
The AWB continued to develop and maintain its export markets in 1994/95, even as a drought severely reduced its crop. The AWB actively promotes its wheat through technical training, orientation visits, off-shore consumer servicing and other promotional activities. Training activities included participants from the Philippines, Dubai, Indonesia, China, South Korea, Malaysia, Singapore, India, Egypt, Thailand, New Zealand and Fiji. Continuing support also is made available for the Bread Research Institute and the Academy of Grain Technology.
A major market promotion, the AWB "Growing Together" Forum, was held near Kuantan, Malaysia, in August 1995. The forum targeted customers from Singapore, Malaysia and Thailand; provided a platform for presentation and discussion on a range of marketing and technical issues. The program also aimed to strengthen personal contact and business relationships; to further improve the AWB's presence in the region and to initiate long term strategic business partnerships.
At the Bakery Industry Training Center in Singapore, customers from throughout South-East Asia took part in the first AWB noodle technology program. The program highlighted the challenges encountered in processing noodles. This program is linked to the Asian Food Research Center at the Academy of Grain Technology in Melbourne, which uses the unique facilities of the AWB's noodle pilot plant to screen wheat varieties and to refine processing techniques. The AWB encourages production of wheat specifically for Asian markets through special producer pools.
The Wheat Industry Fund (WIF), funded by a 2-percent levy on wheat sales to the AWB, provides a capital base which is used to diversify AWB business activities and could become the capital base to support AWB borrowing when the government borrowing guarantee expires in 1999. WIF investments include shares in flour mills in Egypt, Vietnam, and China.
In addition to its marketing and market development activities, the AWB offers export credits guaranteed by government export credit insurance agency. The AWB signed a long-term agreement with China in December of 1995 which commits China to purchase 3 million tons of Australian wheat between 1996 and 1998.
The Australian Dairy Corporation (ADC) is authorized to export dairy products and develop markets for dairy products at home and overseas. The ADC issues export licenses to private companies and dairy cooperatives, but sells cheese itself to Japan and the EU. The ADC's market development activities are funded by assessments on dairy producers. ADC received some funding through the Australian government's Export Market Development Grant scheme for coordinated advertising and promotion activities in the Asia/Pacific. The Australian government contributes funding of up to 0.5 percent of the gross value of dairy production for research. (This government expenditure is not included in Table 1 because it assists commodity research rather than promotion.)
ADC's international promotions in 1994/95, estimated at a cost of $4.5 million, featured retail in-store tasting of dairy products in Japan, television commercials and retail store product sampling in Hong Kong and sponsorship of an "Eating Right for Health" brochure in Singapore. The ADC participated in a Seoulfood 94 food exposition in Korea and represented 17 Australian manufacturers at the Vietnam International Trade and Industry Fair. The number of licensees for ADC's "Australian Dairy Mark" brand increased from 25 to 35 in 1994/95. In addition, Memoranda of Understanding were signed in Vietnam and China for the development of jointly owned dairy production facilities.
The Australian Meat and Livestock Corporation (AMLC) operates to maximize returns and profitability of the industry through domestic and international activities designed to secure and protect market access; to persuade customers of the desirable characteristics of Australian meat; to provide mechanisms to insure the best possible delivery of the product; and, finally, to provide market intelligence. AMLC is funded entirely by industry levies. The Australian government contributes funding of up to 0.5 percent of the gross value of cattle, pig and sheep production for research. (This government expenditure is not included in Table 1 because it assists commodity research rather than promotion.)
AMLC export market expenditures for 1995, estimated at $34.3 million, continued to focus on North Asia, which accounts for 67 percent of promotion expenditures, followed by the Americas (21 percent), the Middle East (9 percent), and South East Asia (2 percent). In Japan, AMLC advertising continued to concentrate on the "Aussie Beef" theme which it has directed primarily at consumers, including television advertisements reinforcing the Aussie Beef mark. Individual exporters have been able to operate under the Aussie Beef umbrella using its logo and its associated marketing benefits while promoting their own brands. More than 65 private brands now operate under the Aussie Beef label, which also was launched in Taiwan during the year.
The Australian Horticultural Corporation (AHC) oversees an industry goal of raising exports from A$700 million ($518 million) to A$2 billion ($1.48 billion) by the year 2000. AHC and individual commodities covered by the umbrella organization undertake export promotion activities. AHC is funded by industry levies and government matching grants. Apples and pears tie with dried fruits for 76 percent of total AHC promotion expenditures (both industry and government funds), followed by citrus (21 percent), and, to a much lesser extent, macadamia nuts, avocados, nashi and honey. Dried fruits and honey promotions are conducted by the Australian Dried Fruits Board and Australian Honey Bureau, which also have authority to issue export licenses for their respective products.
Several of the individual horticultural producer associations received government Export Market Development Grants in 1994/95, including associations of producers of: nashi ($100,000); macadamia nuts ($2.2 million) and honey ($1.2 million), and dried fruits ($100,000).
Government grants to the AHC have been used since the AHC's inception in 1988 to supplement the industry levies and to support "change" in the Australian horticultural sector. These government grants will be terminated at the end of 1996/97, a year earlier than originally forecast.
Specific activities of AHC and its members in the export area include: market access and development and industry marketing. Market access activities are primarily technical assistance to the Quarantine Inspection Service to identify and seek the elimination of phytosanitary import barriers. Industry marketing activities have been undertaken in Singapore, Malaysia, Hong Kong, New Zealand, Indonesia, Taiwan, and the United States. The majority of export promotions have focused on demonstrations and publicity at the store level and general media activity. In the first half of 1995, South East Asian export promotions tied in with the debut of the AHC's Australian Produce Identification (API) program under the Australian Fresh logo and banner to build market presence for Australian fresh fruits and vegetables as safe, healthy, high-quality produce.
The Australian Wine and Brandy Corporation (AWBC) is chartered to promote and control the export of grape products from Australia through the promotion of products both in Australia and overseas. Specific missions of the AWBC include the achievement of an international reputation for Australian wines and the improvement of knowledge about Australian wines in selected export markets. The AWBC also issues licenses to exporters and compliance certificates for each wine shipment. The AWBC inspects wines intended for export to ensure that quality standards are met and that the wines meet importing country requirements. The AWBC also administers a Label Integrity Program. Under the AWBC is the Australian Wine Export Council which coordinates objectives and budgets of exporter committees that exist in the U.K., Mainland Europe, U.S., Sweden, Asia and Canada. The AWBC spent a total US$1.8 million of its own funds in the United Kingdom (42 percent), the United States (31 percent), Europe (10 percent), Scandinavia (6 percent), Japan (5 percent), Canada (4 percent), and other countries (1 percent).
The Australian Wool Research and Promotion Organization (AWRAP) was formed on December 1, 1993, from the merger of the Australian Wool Corporation and the Wool Research and Development Corporation. In June, 1994, the operations of AWRAP and the International Wool Secretariat were merged in order to form one customer-focused international marketing and research organization. The AWRAP Board is involved in operational issues, particularly technical and research and development matters and Australia-specific issues, while the IWS Boards addresses policy issues related to funding, the Woolmark brand and other branding strategies, and generic promotion. AWRAP/IWS conducts industry studies, consumer trade and retail promotion and provides technical service and expertise to the early and later stage processing industry around the world. Funding for AWRAP comes primarily from a 3.5-percent wool tax levied on the value of the wool shorn which totaled US$88.5 million in 1995. This income goes for general promotion costs (US$59 million) and operational costs.
The Woolmark is one of the world's most recognized apparel labels. Research shows that consumers in major markets are prepared to pay more for clothing which carries the Woolmark label. In some markets such as China, unlicensed manufacturers use counterfeit Woolmark labels to boost their sales. The IWS is working with Chinese retailers, manufacturers, and the government to identify and prosecute offenders. The IWS also conducted a TV advertising campaign for fashion-conscious young Chinese consumers to build market share for wool apparel carrying the Woolmark.