IFAM subsidies for airfreight to cease in June
The Federal Government has not committed to extending its assistance package for industries reliant on airfreight, which is set to expire in June.
THE Federal Government has signalled it will end subsidies for airfreight cargo in June, sparking panic among farmers who have relied on the scheme to continue exporting during COVID-19.
At an industry briefing, representatives from AusTrade reiterated the International Freight Assistance Mechanism program was a temporary and emergency measure that was scheduled to cease in June and there was no certainty of funding to extend beyond the middle of the year.
This is despite saying airfreight prices were unlikely to drop to pre-COVID levels in the foreseeable future.
Horticulture has been the biggest user of the IFAM program – with exports of $1.2 billion of fresh fruit and vegetables sent to international markets – followed by seafood, lamb, beef and dairy.
Exporters have been encouraged to “investigate how to adapt and evolve business models”, convert to sea freight where possible and investigate market diversification opportunities.
But AusVeg export development national manager Michael Coote said these weren’t viable options for many sectors, particularly in the vegetable space.
While carrots, potatoes and onions were sea freighted, the highly lucrative export market for asparagus relied on air fright alone.
“There will still be a lot of trade that will be able to travel by sea, but for some products, the ceasing of IFAM will really inhibit their ability to get to international markets,” Mr Coote said.
Koo Wee Rup asparagus grower and exporter Alex Motta said the continuation of the program was essential to the asparagus industry, which exports half of all produce overseas, with the bulk going to Japan.
“We struggled through last season, it’s not just the costs but the frequency of flights, but IFAM made us far more competitive than we otherwise would have been. It would be disastrous for us not having some support moving forward, especially when we ramp up in August,” Mr Motta said.
AusTrade did not confirm whether IFAM would be discontinued come June 30, saying an expansion of the program was “a matter for Government”.
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