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Wednesday, 18 March 1987
Page: 1029

Mr CUNNINGHAM —Can the Minister for Primary Industry inform the House of the latest market outlooks for wool, beef, dairy products, sugar, cotton and horticultural products? How do these outlooks compare with the market outlook for wheat?

Mr KERIN —By and large I would have to refer to the statements of the Bureau of Agricultural Economics, as expressed in its end of January Outlook Conference, and further information which is available to me. Basically the projections are that the wool industry is undergoing reasonably good times, as is the beef industry. The main problem for the beef industry is access to markets and my colleague the Minister for Trade is doing a lot of work in that regard, particularly as we head into the next round of discussions with the Japanese on the quota requirements.

The Bureau and the Government take the view that increases in the sheep flock would not be regarded unfavourably, but further down the track, if there is too big a swing out of wheat into wool and other pastoral industries, there are some projections that there could be a turndown in the 1990s. But that is a long way ahead and it all depends on the market situation. By and large, if one looks at the Bureau's measures of farmers at risk, one sees that there are no beef or wool properties at risk. That is on the same comparative basis which shows that 12 to 14 per cent of wheat farmers throughout Australia are at risk. The measure of risk relates to calculations of negative farm income and less than 70 per equity.

The dairy industry, to which the honourable member referred, is basically being held up reasonably well by the devaluation of the dollar, as are dried fruits and quite a range of other industries. The long run prospects for the dairy industry, given the corruption on international markets-and at present we are negotiating on butter oil under the terms of the international dairy arrangement because of the activities of the European Economic Community and other countries which are selling, on our estimates well below the General Agreement on Tariffs and Trade minimum-are reasonably clear. If production is reduced that industry will experience higher returns per litre of milk and for individual farmers.

In the horticultural industries, we believe that the devaluation has helped, but certainly there are prospects for fresh horticultural exports. I am in the process of trying to set up an Australian horticultural corporation to facilitate those exports. The honourable member referred to the fact that the situation for wheat and other grains is vastly different. The cotton industry has recovered to some degree, but if we look at the total decline in the real net value of rural production, we find that about 80 per cent of that decline is explained entirely by wheat and that there are some sectors of the farming industry that are not going through difficult times at present.