Australian lamb industry hit as Qatar cancels subsidy on $300m-a-year trade

The Qatari government has moved to cancel a subsidy for the Australian lamb industry, even as Australia’s agriculture and meat sector continues to reel from Chinese import bans.

Australia’s $300m-a-year lamb trade with Qatar has been underpinned by a subsidy program in place since 2015. It was due to finish in 2023, but the Qatari government made the sudden move to cancel the deal as of 31 December.

It comes after the Australian government “registered its strong disapproval and outrage” at the treatment of Australian women who were subjected to compulsory intimate medical examinations at Doha airport.

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Stephen Crisp, chief executive officer at Sheep Producers Australia, said that the industry was not expecting the decision.

“It was a surprise. I don’t think we were ready for this. But we’re fortunate to be in a very adaptable industry. We service many, many countries, so we can adapt.”

Industry insiders told the Guardian they were reluctant to link the decision by the Qatari government to the controversy surrounding the treatment of 18 women, including 13 Australian citizens, at Doha’s Hamad International Airport.

They said it was a surprising blow, but that the industry had expected something like this in the long term as Qatar looks to increase competition and move towards a relatively self-sufficient model.

Exports to Qatar have rebounded strongly after dipping when the pandemic hit, according to Thomas Elder Markets, and are now at around 1,619 tonnes per month, making Qatar the third top destination for Australian lamb, behind China and the US.

Crisp said although the industry was not dependent on the Qatari market, it would still take a hit on the decision.

“It’s an important market for certain abattoirs that were geared towards that market. It’s not a massive volume, but it’s an important market. But, we don’t like to see any diminishing of our competitiveness in any market around the world.”

Crisp said the industry enjoyed a positive relationship with Qatar, and was hoping the decision was not taken over diplomatic issues.

“It’s a subsidy that we’ve enjoyed. But we can compete on a level playing field. It’s going to be harder, but I think our premium product should still attract a market in Qatar.”

Minister for trade Simon Birmingham told the Australian Financial Review that exports of lamb to Qatar hadn’t been banned, and that there would still be demand for Australian lamb.

“Qatar is apparently reviewing the operation of its state-supported import scheme, including possibly moving to a less state-controlled and more market-orientated model,” he said.

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“We expect that Australia will experience competition for future contracts under a new model, but that there will be continued demand for premium quality lamb in Qatar.”

The decision comes as the airport police officers who forced the intimate examination of female passengers have been charged and could face prison sentences.

The officers ordered the women into forced intimate medical examinations after a newborn baby was found in a rubbish bin at the airport.

Neither Qatar Airways or the Qatari government have apologised to the women for the incident.