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Wednesday, 7 March 2001
Page: 25254

Mr ADAMS (12:55 PM) —The honourable member for Corangamite mentioned that we only had one speaker in this debate. I think there were three of us on the paper. I had to drop down the list because of other commitments. The honourable member for Corangamite and other government members would know that the workload in parliament is not always reflected by the number of members sitting in the chamber—as I am sure the visitors in parliament who are listening to this debate on the Pig Industry Bill 2000 would appreciate. The member for Corangamite would be well aware that I, having grown up on my father's mixed dairy farm, would have raised many pigs in my day and that I do have some sympathy for the pig farmers who have gone through a considerable amount of change over the last two or three years.

The Australian pig industry has been experiencing considerable pressure to change as a result of the fluctuating fortunes in the domestic market for pig meat, which included declining returns to producers, competition from imports, and a very small export sector. These all added to its woes. The consumption of pork in Australia has remained stable since 1994, but price competition from other meats such as beef has affected the consumption of pork. Also, food safety concerns over smallgoods have had a major impact on this industry. It has been recognised that returns to producers have been falling in real terms since the early 1970s, similar to the situation in other livestock industries. Of course, the difficulties of the small mixed farms throughout Australia, which the honourable member for Corangamite mentioned earlier, have certainly come together and many have lost out to size and costs of production.

The difficulty with pork is that, unlike most other agricultural industries where approximately 75 per cent of production is exported, the pig industry, until recently, focused almost entirely on the domestic market. The main export markets were Singapore and Japan. It was thought that, as demand for pig meat was already increasing, there was room for expansion in these markets. But, in relation to this, we had some funny comments from the Minister for Trade. I remember the Minister for Trade running an argument that the government had sorted out the pork industry, because there had been a great increase in export production for overseas markets. But he did not mention that on the Malay peninsula a disease in pigs had caused a crisis in that industry and many pigs had to be eliminated. This opened up the Australian market, giving our industry an opportunity which we were able to take advantage of. It has worked out very well for the pig industry. The member for Corangamite mentioned that a package was put together during the 1998 election campaign when pig producers were raising many issues at a political level. But the government was very slow to put that package together, very slow to get in behind the pig producers of Australia and very slow to take their plight seriously. The government left the pig producers out there swinging, as they have done with the restructuring of the dairy industry. They have a lack of understanding of what is needed.

We hear the Minister for Agriculture, Fisheries and Forestry in here at question time trying to make points and put pressure back on to the state ministers for agriculture. There is no consideration for regional Australia and for the effect these changes in agricultural policy have on regional centres. Regional issues should be addressed when we are looking at structural change in some of these industries. There is obviously a need to try to bring the industry together to act as one body, particularly for marketing purposes. I am sure I could say the same about the need to put lobby groups together in order to lobby for the changes that are needed, whether they relate to government legislation or marketing.

In Tasmania, the pork industry is very small compared with other meat industries. As at June 1999 there were 76 herds and 2,827 sows registered. The concerns of a number of growers escalated when deregulation resulted in hams from overseas, specially from Canada, coming into Australia at vastly lower prices. In relation to Canadian ham, subsidies were provided not only in production but through their transport system and structures. Pork growers around Australia were incensed at this intrusion as they could not compete on an equal footing. I do not think the government gave them enough consideration when that debate was taking place. The pork industry has had mixed fortunes over the years. Pork prices have been more favourable recently.

It was seen that there was a need for pork producers to take control of their own destiny. A report released in March 2000 recommended that it would be beneficial to streamline the industry's management structure. This was to be achieved by amalgamating the existing pork industry bodies into a single producer-controlled organisation. It was endorsed unanimously by the pork producers at a Pork Council annual general meeting. Later the government gave the go-ahead to develop a new company.

This bill allows for the creation of a single pig industry services body, with responsibilities for strategic policy development, marketing and research development. This body brings together marketing and research. The new not-for-profit industry services body will take over the assets, liabilities and staff of the Australian Pork Corporation and the Pig Research and Development Corporation. It will operate under Corporations Law, and all statutory levy payers will be eligible to register for membership and full voting rights in the industry services body.

To deliver its objectives and strategic and operational plans, the board of the industry services body will be required to supplement the skill mix of its five-member elected directors with specialised skilled directors, including an independent director skilled in corporate governance. The body will also take over the strategic policy development role of the Pork Council of Australia. This includes the ability of the minister to provide the power to enter into funding contracts with an eligible body. This will enable it to receive and administer levies collected by the Commonwealth for industry marketing and promotion, research and development, and the Commonwealth's matching funding for eligible R&D expenditure. The minister then will declare the body with which the contract is made to be the industry services body. Details of the accountability obligations to both members and the Commonwealth will be outlined in both the contract and the constitution of the new body.

The bill states that, if the company changes its constitution in a way considered by the government to be unacceptable, becomes insolvent or fails in any way to comply with the legislation or the contract, the minister may suspend or terminate payment of statutory levies and matching grants to the company—that is, the levies collected by government at the slaughterhouse. He can also rescind the declaration that the company be the industry service body and either create another one or go down another track. Once all of this is put into place, the Australian Pork Council will be wound up about three months after the Corporations Law company Australian Pork Ltd becomes the industry services body. Once established, Australian Pork Ltd will receive the bulk of its income from a compulsory levy and public funding. The government will match the amount of money raised by the levy. It will perform a public function for the pork industry and the wider community.

There are some concerns, however, on the setting up of this company. The constitution and contract have not been finalised. We on this side have not had an opportunity to examine them to see whether accountability provisions adequately protect the interests of the Commonwealth and pig producers, but that of course is the incompetence of this government in bringing in a bill and not putting everything before the parliament. The way it has been set up, one organisation will be responsible both for managing R&D funds and for the agripolitical lobbying on behalf of the industry. This joint role is of great concern as the two roles do not meld very well. The mechanism proscribing party political activity but allowing normal agripolitical action will need thorough examination when the documentation becomes available. People are saying that quite a lot of politics existed around this industry in 1998 and that they would like to take some of that politicisation out of this industry now. We do have to have some safeguards on the independence of the rights of the organisation to be able to oppose government policy if it sees it to be detrimental to the industry. However, this should not impact on whether it receives funds or levies, of course, much of which come from its own funds and from its own industry. Net assets of about $7.4 million from both the existing organisations will be transferred over to this new body.

We have to be wary about putting too much emphasis on the political aspects of these organisations. They need to lobby in the best way they can, and that of course is a part of their role. I was very interested to hear the member for Corangamite speak about open-range piggeries in his electorate. That involves sustainable agriculture and moving towards a lot less need to intervene in some of these areas of prime productive piggeries. I look forward to the time when we will look at some of these new concepts in the pig industry. Although some changes need to be made, it is important to ensure that the details that are yet to be finalised come before us, so that we can see what is going to take place, before this bill is put in place.