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Wednesday, 7 March 2001
Page: 25240

Mr SECKER (11:40 AM) —I can very well remember—and I am sure you can, Mr Deputy Speaker Hawker—the state of the pork industry in Australia less than three years ago. They had high input costs, low and falling prices—and it certainly was not an enviable job to try to produce pork—and there was a raft of so-called solutions to this problem. I can remember that in 1998—about March—I had the pleasure of visiting the KR processing factory—and I believe that is in the member for Blair's seat. It was a very highly organised production outlet and their attitude at the time, even though there were low prices for pork, was that they believed the answer was not to have closures and not to have bans on imports but to get out there in the market and produce their high quality products. I certainly learnt a lot from that visit.

Unfortunately at that time and prior to the 1998 election, we had the spectre of Peter Brechin, the President of the Pork Council of Australia, leading a highly visible campaign against the coalition government, calling for high tariffs on and import bans against pork from Canada. It did not matter to Peter Brechin that we exported eight times the value of other agricultural products to Canada that we imported from that country. It did not matter to Peter Brechin that other agricultural produce would probably have faced retaliatory action from Canada if we had followed his line. It did not matter to him, and he would not accept the mere fact, that there was more pork produced in Australia than we could consume at home, like many of our agricultural products, and therefore the pork industry needed to work towards exports. But it did matter to the pork industry because, after that election, at the next AGM of the Pork Council of Australia, Peter Brechin was deposed as president, and we certainly have a far more rational leadership there with Ron Pollard, who has worked very closely with this government to bring this bill in front of those in the chamber.

We knew that exports and efficient production were necessary and we allocated some $24 million to help pork producers gear up for exports. We also allowed for a dignified exit from the industry by some pork producers. In my electorate of Barker, the pork industry has benefited from such investment and is geared up for exports. Frankly, it is doing pretty well: demand is up, prices are up and input costs have fallen compared to three years ago. Where was the Labor Party opposition during this time and what were its policies? Typically, they followed their own maxim to say anything and do anything to win government. The Labor Party threw out all the principles of free trade that they had lavishly followed for the previous years of government under Hawke and Keating, and they took the cheap One Nation tack of supporting the selfish, shortsighted approach of Peter Brechin. The Labor Party followed the League of Rights approach of Fortress Australia, because they would say anything and do anything to win government. The Labor Party showed just how shallow their policy approach was. They had no policies then and they have no policies now, because they are a policy-lazy party that cannot put the interests of Australia ahead of their own cheap, short-term interests.

Perhaps I should remind the chamber that only one member opposite is speaking on this bill, which shows the interest of the Labor Party in this very important bill for the pork industry. Can I let him, and anyone else that might be listening, know of a conversation I had with a pork producer from the electorate of Barker last night. His concern was the risk of foot-and-mouth disease entering Australia, and it is a very important concern. He was at pains not to take the One Nation-Labor Party-League of Rights approach of Fortress Australia, but he knows, as I do and as other members of this chamber do, that foot-and-mouth is the greatest threat to our meat producing industries. Contrast that with the spectacle in this chamber last week of the Labor Party's mirth when this serious topic was raised by this side of the chamber and contrast that with the knowledge that we now have that two Labor members have pulled out of speaking on this important bill. Even the member for Corio, the sole speaker from Labor on this bill in this parliament, would have to admit that he was not particularly enthusiastic.

It is a pleasure to be able to speak on the Pig Industry Bill 2000 and to support the many pig producers in my electorate of Barker and all over Australia. You may not be aware that the Murray Lands area of South Australia, which is in my electorate, is a major pig production and slaughter region. Currently, over 60 per cent of the pigs grown in South Australia are slaughtered and processed in the Murray Bridge region. Currently the region processes in excess of 32,000 pigs, but the two new state-of-the-art slaughterhouses that this government helped bring to fruition in the Murray Bridge area have the capacity to eventually handle 500,000 carcasses. While I have mentioned that 60 per cent of the pigs in South Australia are grown in the Murray Lands area, I think that probably at least 30 per cent of the other 40 per cent are grown down in the south-east of my electorate of Barker as well. This is all very good news for the producers of my electorate, who not all that long ago, as I mentioned earlier, were facing financial ruin because of the dumping of pork products from Canada. Not only did they weather that storm but they have risen to the challenge and have grown into an even more dynamic and modern industry, creating jobs for the region and valuable export dollars.

Today's bill aims to merge and privatise the Australian Pork Corporation and the Pig Research and Development Corporation. The final report of the joint industry-government working party on pork industry restructure, which was released in March 2000, recommended streamlining the industry's management through the amalgamation of the three existing pork industry bodies into a single producer controlled organisation. What we are looking to achieve is one producer controlled organisation using producers' money for the benefit of the whole pork production industry. The President of the Pork Council of Australia, Mr Ron Pollard, said that there was strong and consistent feedback from the industry to move quickly to implement the new structure, which makes it even more strange to hear that the opposition is opposing this bill when the consistent feedback from the industry is that they want this bill. Obviously, the Labor Party has not been on enough of these false bus tours around country areas and talked to real country people to realise what they really want.

The report was endorsed unanimously by delegates to the annual meeting of the Pork Council of Australia in March 2000—in my experience of agricultural industries, that is almost unheard of. On 29 August 2000, the Minister for Agriculture, Fisheries and Forestry, the Hon. Warren Truss, announced that the government had given the go-ahead for a new company, Australian Pork Ltd. Australian Pork Ltd will take over the functions of the three existing industry and statutory bodies. He said at the time:

... the evolution to a single organisation will remove inefficient duplication in servicing industry needs and provide a single point of contact for pork producers as well as our domestic and international trading partners.

What the industry was looking to achieve was one producer-controlled organisation using producers' money for the benefit of the whole pork production industry. There was strong and consistent feedback from the industry to move quickly to implement this new structure. Australian Pork Ltd will be a company limited by guarantee under Corporations Law, with all major policy and strategic issues being decided at the one board table by a single board of directors and with a majority of producer-elected directors.

Ron Pollard, Chairman of the Pork Council of Australia, said that it was exciting for the industry to be implementing a dynamic new producer-controlled organisation which will be responsible for all policy, research and development and marketing services. He said that the APL will be a flexible organisation that can respond quickly and decisively to immediate and emerging threats and opportunities in domestic and export markets. It will have a stronger commercial focus, and producers will have more ownership and more control over the use of their money. The consultation process included the production of an options paper and a final recommendations paper, and a series of meetings with people representing all aspects of the industry Australia-wide. Mr Pollard was certainly confident that Australian Pork Ltd will serve the industry well in a challenging business environment. That is the way that the industry needs to go, and I congratulate the industry on taking the bit between its teeth and ensuring that the industry has a profitable future.

Currently three organisations—the Pork Council of Australia, the Pig Research and Development Corporation and the Australian Pork Corporation—manage the separate tasks of policy, research and development, marketing and promotion and export development in the Australian pig industry. For example, the Australian Pork Corporation is the statutory marketing authority for pork produced in Australia. It was established under the Pig Industry Act in 1986. It is funded by a promotion levy of $1.65 per pig slaughtered, payable by producers. In 1999-2000, the revenue raised from this levy was $8.24 million. The Australian Pork Corporation plans and implements marketing and sales programs for the pork industry in Australia and overseas under the brand name of `New-Fashioned Australian Pork'. It also provides a central information resource for the industry through a library and a statistical service that analyses international and domestic trends in pork production and marketing. The APC worked closely with the National Pork Industry Development Program to establish and fund the Confederation of Australian Pork Exporters in 1998-99. Currently it administers the Confederation of Australian Pork Exporters, which is also funded through the NPIDP.

The Pig Research and Development Corporation was established on 2 July 1990 under the Primary Industries and Energy Research and Development Act 1989. It invests and manages research and development funds on behalf of the Australian pig industry and the Commonwealth government with the aim of improving the performance and sustainability of the Australian pig industry and increasing its global competitiveness. It is not about fortress Australia but about increasing the industry's global competitiveness. With the current fears over foot-and-mouth disease in Britain, more than ever it is vital that Australia remains at the forefront of disease prevention research so that we can continue to lead the world as a clean, green producer of quality, hygienic product. The PRDC supports over 100 research and development projects, ranging from long-term research on pig breeding and health to the provision of industry information and training packages on topics such as pig housing, management, health and handling. Its income is derived from two main sources: the Australian pig producers and the Commonwealth government.

Under the Primary Industries (Excise) Levies Act 1999, pig producers pay a research levy on pigs slaughtered for human consumption. The levy rate is approved by the Minister for Agriculture, Fisheries and Forestry after taking into account the view of the Pork Council of Australia and the recommendation of the PRDC. In 1999-2000 the rate was 70c per pig, which has been unchanged since 1992-93. For each dollar of research levy the Commonwealth government provides another dollar, up to 0.5 per cent of the gross value of production. In 1999-2000, levy receipts totalled $3.48 million, and the Commonwealth government provided a little bit more than that at $3.65 million.

The Pork Council of Australia is the peak representative body of the Australian pork industry. It now represents 75 per cent of pork producers across Australia. It was established by producers to represent producers' interests with government and industry, and it is funded by voluntary membership. The PCA is a non-profit company controlled by a board of eight directors, who are chosen by industry delegates. Delegates are nominated to represent a group of producers who have combined their herds into a `cell' of 7,000 sows. This structure allows individual large producers as well as organisations to be directly represented. From 1 January 2000 the cost of voluntary membership of the PCA was $1.50 per breeding sow. The PCA, as the recognised national representative body for Australian pork producers, has a statutory obligation to monitor how pork producers' statutory levy funds are used. It also provides advice to the government on the expenditure of funds to benefit that industry.

The PCA also acts as a lobby group with government and other industries on behalf of pork producers. For example, the PCA has lobbied the federal government for increased access to overseas markets through the removal of barriers to trade—not the Labor-One Nation-League of Rights approach of fortress Australia. In the past, not all members of the PCA have agreed with the political activities of the organisation. In fact, in 1998 there was disagreement between the New South Wales Farmers Association, which represents about 220 mostly small-scale New South Wales pork producers, and the PCA over the PCA's decision to campaign against the government in 10 coalition held seats—including my own, Mr Deputy Speaker Hawker, and probably yours as well—in the October 1998 election. The New South Wales Farmers Association, which had four of the 34 delegates at PCA meetings, withdrew in protest but has since rejoined the PCA, and it is a far more effective organisation now.

A working party had been established following a unanimous directive from delegates of the Pork Council of Australia in May 1999, and it established a joint industry-government task force to prepare a report defining the options available to the industry to have a single industry body including research and development and marketing functions. The working party consisted of nine members and was very successful. It was chaired by the President of the Pork Council of Australia, Mr Ron Pollard. The working party released an options paper in October 1999 setting out three alternatives for the industry to achieve a single industry organisation that incorporated policy, research and development and marketing functions, and that is what this bill is all about.

The options recommended by the working party proposed the full integration of the three existing bodies, involving one board of directors responsible for all industry policy and service delivery functions; the board of directors to have a majority of producers, with the balance of directors appointed on the basis of their commercial skills; statutory levies paid by pork producers for research and development and marketing to continue; matching government funds for research and development to continue; public policy activities of a political nature presently undertaken by the Pork Council of Australia to be funded voluntarily by pork producers; and industry delegates, similar to the current PCA system, to provide a formal mechanism for electing directors and communicating policy.

Following consultations with pork producers, the working party reported that there was no interest from the industry in continuing the current arrangements involving three national industry bodies. Instead, there was overwhelming support from the industry for amalgamating the three organisations into one body incorporated as a non-profit company controlled by the producers—not by the government but by the producers.

The Australian pig industry is experiencing considerable pressure to change as a result of a range of factors including a stable or declining domestic market for pig meat, declining returns to producers, competition from imports, and a small export sector. The consumption of pig meat by Australian consumers has remained stable since 1994. However, price competition from other meats, such as beef, has affected the consumption of pork, while food safety concerns over smallgoods have also had an impact. Approximately 20 per cent of all pig meat produced in Australia is used in the manufacture of smallgoods while a further 35 to 40 per cent is used in the manufacture of ham and bacon. In addition, returns to producers, based on Australian pig meat prices, have been failing in real terms, but that has also been the case for other livestock industries.

What the industry wants is a say in future proposals to vary the statutory levy rate, rights to attend, ask questions and be heard at APL general meetings, and rights to receive certain company information contained in financial, directors' and annual reports. Producers who pay both the statutory and voluntary levies would have additional rights to participate. (Time expired)