Senator Brown asked the Minister representing the Minister for Trade, upon notice, on 18 May 2004:

(1) Are there any projections available concerning the future global consumption of annually renewable natural fibres.

(2) Is the Minister aware of the potential economic, social and environmental benefits of the commercial production of these types of fibres.

(3) What level of assistance is the Government providing this industry.

Senator Ian Macdonald (Minister for Fisheries, Forestry and Conservation) —As the matter falls under the Agriculture, Fisheries and Forestry portfolio, the Minister for Agriculture, Fisheries and Forestry has provided the following answer to the honourable senator's question:

(1) Global Consumption of Natural Fibres.

Details of the current and future global consumption of wool and cotton are as follows:

Wool

(f) Forecast

(p) Projection

Source: The Woolmark Company.

Cotton

Reflecting improved world income and a subsequent increase in the demand for textiles, world consumption of raw cotton is expected to increase by 1 per cent in 2004/05 to 21.4 Mil tonnes.

(2) Economic, Social and Environmental Benefits of Natural Fibre Production

Wool

The main economic benefits include production of about 450,000 tonnes of greasy wool (in 2003/04) and export earnings for Australia of around $3 billion. Wool production, largely through providing rural employment and incomes, also brings social benefits.

With respect to the environment, wool is a low input, renewable and solar generated source of fibre, as opposed to synthetics. Providing that sheep are correctly managed, sheep grazing is compatible with biodiversity conservation. For example, sheep in the rangelands harvest food from the native vegetation, instead of the native vegetation being replaced by exotic grasses and plants. In addition, Australian Wool Innovation Ltd (the wool industry's R&D organisation) has provided functional, accurate and beneficial drought management programs to woolgrowers such as Better Pasture Plants, which are aimed at enhancing the environment.

Cotton

Like wool, the cotton industry, with a Gross Value of Production in 2002-03 of $1.15 billion, provides a wide range of economic (such as exports, regional trade and employment) and social (support to regional communities) benefits. The cotton industry has implemented a Best Management Practices (BMP) program that brings positive benefits to the environment.

With respect to other potential renewable fibres, such as hemp, we understand that such crops are not commercially viable at present.

(3) Level of Assistance Government Provides Industry

Wool

The Government provides the wool industry with support for R&D, through Australian Wool Innovation Ltd, equal to 0.5% of the gross value of wool production (GVP). This direct contribution from the Commonwealth of about 14 million is in addition to the 2% levy on wool production that is also used to fund R&D. The total budget for wool R&D amounts to around $70 million.

Cotton

Like wool, the Government also provides direct funding through the Cotton Research and Development Corporation (CRDC) equal to 0.5% of GVP ($7.2 million in 2002/03). This Commonwealth contribution is in addition to a levy on cotton production that funds the CRDC.