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Wednesday, 7 March 2001
Page: 25251


Mr McARTHUR (12:37 PM) —I am delighted to speak to the Pig Industry Bill 2000, but let me firstly deal with the shadow spokesman, the member for Corio.


Mr Tanner —A friend of yours.


Mr McARTHUR —A friend of mine—that is correct, as the shadow spokesman at the table remarks. I acknowledge that the member for Corio would have experience in the pig industry, having been a farmer himself. I am sure he had a little piglet—


Mr Tanner —As a pet.


Mr McARTHUR —As a pet, in the backyard. So the shadow spokesman, unlike most of his colleagues opposite, would have some first-hand experience of the pig industry. He acknowledged that the industry has moved on to better times, from his personal experience at Alvie, in the hills of Colac. More seriously, the shadow spokesman, in a long and, at times, interesting speech, basically agreed with the thrust of the legislation. But he said, `I haven't seen the contract between the minister and the pork corporation, and I have not seen some other details. Therefore, the opposition will vote against it.' How remarkable. Having spent 25 minutes agreeing with the thrust of the legislation and telling us how he had had dialogue with industry representatives, he said that he is not going to accept the thrust of the government's legislation at this stage. He also challenged the changing of the three structures to one structure—which I will talk more about in a moment—which was a recommendation of those representatives.

It is interesting to consider the background of the pork industry relative to other industries such as the dairy industry and the wool industry, where change has taken place out of this parliament. As members who have been close to this industry would be aware, there was a great argument in 1998 about the impact of imports. A political campaign developed based on the charge that imports from Canada and Denmark were wrecking the industry. As a result of that debate we have the current legislation and a totally new and revamped industry. The figures are interesting. In 1960 there were 50,000 pig producers. They would be—like the member for Corio—small pig producers, with three or four sows in the back paddock and moving in and out of the industry according to profitability. By 1999 the number of pig producers had declined to 3,000 producers. I understand that there are now about 2,500 producers.

The shadow spokesman digressed to speak of the dairy industry, where we see a similar situation. It is an interesting comparison. In 1970 or thereabouts there were 47,000 dairy farmers. In the year 2000 there were 13,800 dairy farmers, of which 8,500 were in Victoria. So in these two industries there has been a dramatic change. Attitudes have changed and the producers have got together to make a more efficient and viable industry. About five million pigs are slaughtered each year. Imports equalled about 12 per cent of Australian production in the 1999 calendar year.

The argument that was raging during the 1998 election campaign and prior to that was that the 35,000 tonnes of imports were going to wreck the industry. There may have been some merit in that argument because in 1997, after a lot of debate in this parliament, the quarantine regulations in relation to cooked and uncooked ham were tidied up to met WTO specifications. That allowed some imports to come into this country. The Danish imports were about 19,000 tonnes and Canadian imports 17,000 tonnes. As most people would recall, that debate was very vigorous and industry representatives put propositions to us in government that the world was nigh to an end.

However, that has all turned around and the industry has taken on a new lease of life. The producers looked at the export markets and said, `We cannot continue to survive on the Australian market, where price volatility is considerable, and therefore we should look at export possibilities.' Those who looked at export possibilities found that because of a certain set of circumstances the Singaporean market had opened up quite dramatically. When the industry was on its knees it suddenly found that the Singaporean and Japanese markets would readily accept Australian pork.

So in broad philosophical terms we see the dairy industry, which has restructured, moving to the export market and being remarkably profitable, we see the wine industry again looking at the export market and being profitable and we see the car industry—also a matter of considerable debate in the electorates of Corio and Corangamite—doing the same. Those industries have moved into exports. The pork industry is moving in a similar direction and improving its profitability. Exports have moved up to 200 per cent compared to what they were two years ago. That is a remarkable change. We now have about $155 million worth of exports. There has been a big change of culture and attitude by the pork industry compared to those dim, dark days of political pressure.

Mr Deputy Speaker Hawker, I think you personally would be aware of the political pressure that was applied to pig producers in New South Wales and Queensland, in particular. It is worth recording the political pressures and the discussion at that time. I will read to the House some of the media headlines attributable to the Pork Council of Australia. This headline appeared in April 1998: `Farmers put government on notice' and, in May of the same year, `Industry fighting fund will target government'. The following headline appeared on an article on 27 May in the Herald Sun: `Time up on pork crisis'. In June we read, `Future of pork industry rests with Prime Minister'. What they were saying was that the Prime Minister would save the industry. Yet it was in their own hands. Again in June we read: `Farmers angered at government announcement'. Then we go to August: `Survey reveals impact of industry crisis'.

I do not deny that things were tough. I do not deny that a number of the small producers were suffering as a result of cost pressures and the prices they were receiving. In September we read: `Pork industry launches targeted seats campaign'. So they seized political opportunity. The next one is interesting: `Pork Council President disappointed with New South Wales decision'. It went on to say that Mr Peter Brechin, the Chairman of the Pork Council, was `disappointed' that the New South Wales farmers did not join in this campaign.

Out of this very strong political campaign we had change of a quite dramatic nature. During that political campaign those people who supported One Nation were engaging in a scare campaign to gain political support. The people who were left in the pig industry then undertook to make some changes. They said, `Let's look at how we might bring about a new structure and address some of the problems in a more sensible way.' As other members have mentioned, there was an industry working party consisting of new, far-sighted pig producers. I compliment Mr Ron Pollard, who I understand was instrumental in a lot of the changes that were brought about, on his leadership. I also compliment other senior leading producers in the pig industry, including Mr Melville Charles from Ballarat, who is known to me. He has been a very progressive pig producer for the last 25 years. I know that he made a contribution to some of these deliberations.

The recommendation from the 2,500 producers was to amalgamate the Australian Pork Corporation, the Pig Research and Development Corporation and the Pork Council of Australia and create the new entity of Australian Pork Ltd, which represents 75 per cent of the pig farmers and is a nonprofit group controlled by eight directors. The contribution is $1.50 per breeding sow. This group was created out of quite serious political and financial pressures within the industry. The working party proceeded and made recommendations. The legislation is before us today and seeks the support of both sides of the parliament. The minister agreed to the recommendations and this new set of arrangements ensured that there was a single point of contact for the producer side of the industry and the overseas purchasers for exports. The new corporation is not-for-profit, is limited by guarantee and operates under the Corporations Act.

There has been a move by this industry to a more financial and commercial operation compared with its difficult political operation of former years. We draw a comparison with the government's move to privatise Woolmark so that the wool industry would be controlled by wool growers. On that basis, wool growers have the right to elect or to get rid of the directors as they see fit. Likewise, in the pig industry, without moving to political pressures, they will be guiding the industry as they see fit and the signs are very encouraging. These pig producers are based in the grain growing areas of Australia, as colleagues on this side of the House from Queensland and New South Wales would be aware. The important point to note is their closeness to the grain growing areas and the ability of those producers to get economies of scale.

In my electorate of Corangamite we have a very interesting operation of open-range piggeries. I mention one operator, Western Plains Pork, which is at Mount Mercer, south of Ballarat. There the temperature and the seasonal conditions are conducive to running pigs. The operator has moved to the concept of having them in the open air under their eco-shelters, which are large hay bales. They are separated by electric wire and are moved from their various paddocks every two years for disease control, which is very critical because of the foot-and-mouth disease outbreak in Europe—a great fear that all producers have in Australia. Western Plains Pork has moved to a new concept which is environmentally friendly, profitable and close to the grain growing areas. They run about 600 sows at Gumley near Shelford. The pigs are housed in individual straw huts. Poly-pipes are used to water the paddocks. When the areas are no longer used for pigs, cropping is undertaken. I believe that this very interesting new concept in the electorate of Corangamite will develop in other parts of Australia. It has developed in Europe, with open range piggeries, and it suits animal welfare requirements and the disease arrangements. This particular operation is seeking niche markets both locally and overseas. It is seeking long-term markets and hoping to develop long-term contracts because they have an ongoing low-cost operation.

This is a very interesting piece of legislation. Changes have emerged in the industry and people have brought some commonsense to bear on the almost intractable problems of 1998. The industry now faces a bright future. Fundamentally, members of the industry have got together and organised themselves outside of the political spectrum. They have asked government to help in some of the levy processes. I would encourage them to move further away from government legislation and to have their own levy arrangements, as I would encourage other agricultural industries to do. The more we can move agricultural industries away from this parliament the better it will be for them and for us. We have the examples of the wine and dairy industries which are now out on their own. When you look at the figures on the pig industry, you find that 40 per cent of the sows are owned by one per cent of the producers with over 1,000 sows each. What we are saying is that the bigger producers are the dominant feature of the industry rather than being a small backyard industry which waxed and waned according to profitability.

Because of the political activity in 1998, a number of the more sensible producers felt that they should move away from the politics of pig production and election campaigns. In this new structure they are very careful to point out that within the corporation they are basically agreeing to keep outside agripolitics. I wonder, as the shadow minister wondered, whether that is a good or a bad thing. I guess it depends on your view at the time. However, I commend the pork industry for that move, which I think is in the right direction. They will be in charge of their operations. They will guide the industry and not get involved, as they did in 1998, in what I would say was very vigorous and uninformed political activity in the hope that their industry would be saved. Obviously the industry could not be saved by government action, although the government showed a lot of sympathy for their plight and applied a number of funds to help them in R&D, to help improve their abattoir capacity and to help develop a network amongst producers, exporters and abattoir operators.

I reiterate the point that this legislation is under the Corporations Law and that, in the longer run, it will be subject to the normal processes of governance that other corporations are subjected to. I commend the legislation. I commend the background material and the consultation that has taken place between the government, the minister, the shadow minister and other interested parties for their contributions to the recovery of this industry from the crisis point in 1998 to the point now where Australia is a very important exporter of pork to Asian nations. I think that, in the current crisis of foot-and-mouth in Europe, those export opportunities could open even further. They will be added to by the efficiencies of the pig industry in grain handling, in breeding and in the feed conversion ratios that the pig industry has been pre-eminent in developing over the last 20 years. All these technical advances that have taken place in Australia will be exploited because the structure of the pig industry is much better, the industry has a commercially orientated approach and the politics has been taken out of it. I think there is a great future for the open range type activity that is taking place in my own electorate, and I hope to see more of that for both commercial and humane reasons.

For an industry that had a lot of difficulties, this is a landmark piece of legislation. It will move the industry out of the parliament and move it into a more commercial area. If the opposition see fit—the only opposition member to speak on this legislation is the member for Corio, and yet the opposition have the temerity to say that they disagree with it—I hope that they will agree with it. The member for Lyons is very well versed in agricultural matters, and I am confident that he will support the industry because he understands these matters. He has had long experience as a former minister, and I am sure that he will see the merit of the argument and the merit of this legislation. I look forward to his contribution to the debate, because he might be able to persuade the member for Corio that it would be foolhardy for the opposition not to agree with this sensible and important piece of legislation that will bring about such important changes to the pork industry in Australia.