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Wednesday, 7 March 2001
Page: 25257

Mr NEVILLE (1:09 PM) —I am delighted to speak in support of the Pig Industry Bill 2000. I have a longstanding interest in the pork industry. It is an industry that has emerged from considerable challenge over the last three years with a far greater self-reliance and an increased focus on export. Although I do not have anything like the 100 producers I used to have in my electorate prior to the last redistribution, both inside and outside politics I have a great deal of affection for pork growers, especially in their recent difficulties. The resourcefulness of the Monto producers, particularly those in Monto Pork Enterprises, is exemplary and shows how a small group of farmers can improve their own circumstances. They did this by a loose cooperative in buying fodder and chemicals and by putting in place world's best practice in the transportation of their pigs. As a result, they did quite a deal for themselves as part of an overall restructure in the industry. They are about five or six years ahead of the rest of an industry trying to improve itself.

I made a number of speeches in the parliament in 1998 on the plight of the Australian pork producers and the need for government assistance to help them. At the time I called for a number of measures: the effectiveness and focus of our peak industry bodies and industry agencies, access to grain and stockfeed, adequacy of abattoirs and processing works for domestic and export production, impediments to export, a focused marketing and promotional body, and the effectiveness and implementation of new labelling regulations. Therefore, today it is good to be speaking positively in support of a bill that is designed to set a framework to help the industry remain highly relevant in the coming years and to respond to a globalised and highly competitive marketing environment.

The Pig Industry Bill 2000 will allow for the creation of a single peak industry body to provide strategic policy development, marketing and research and development services. The new company, Australian Pork Ltd, will replace the Australian Pork Corporation and the Pig Research and Development Corporation. The bill provides for the transfer of relevant assets, liabilities and staff of those two organisations to the new company, Australian Pork Ltd. Under the new arrangements, Australian Pork Ltd will be the industry owned company that will take over the responsibilities of the Pork Council of Australia in its task of strategic planning and industry policy development.

Through the bill, the Minister for Agriculture, Fisheries and Forestry will be allowed to declare Australian Pork Ltd the industry services body and will allow it to enter into a contract detailing the way in which the industry will administer and manage industry levies collected by the Commonwealth. A more coordinated and commercial approach to the development of the industry and the delivery of services will be a major outcome of the changes, with the industry levy payers given a chance to have more influence over the industry body.

At the time of my speech in 1998, one of the points that I made was that there were layers of bureaucracy within the industry dating back to a time when there were up to 30,000 or 40,000 pork producers in the industry. In 1998, there were a little over 3,000 producers, so there had been a dramatic change. One-tenth or one-twelfth of the number of growers was producing the same amount of pork and it seemed to me at the time that the structures and the levies were not responding adequately to the needs of the growers. As many may be aware, Australia's pork production is relatively small on the international market, with five million pigs produced in Australia annually. Nevertheless, the quality of Australian pork is very high. We rank with Denmark and Canada as having amongst the best pork in the world. In fact, Australian pork is favoured in many parts of Asia—which is very good for us. If we look at the industry over the last 40 years, we will see that the number of producers has dropped dramatically. There were 49,000 in 1960, 39,000 in 1970, only 19,000 in 1980, 7,000 in 1990 and 3,300 producers at the time I gave those speeches in 1998. Today, the figure is probably somewhere in the vicinity of 2,500 to 2,600 growers.

Of course, there have been reasons for this. It is not to say that the industry has gone into a tail spin crisis or anything like that or that the Australian pork industry has thrown away its birthright over the years. It is none of that stuff at all. There has been partial restructuring within the industry itself but there has also been an evolution in the way pork is produced. We do not have the multifaceted mixed farms that were quite a feature of the past where you might have had some beef cattle and some grain, you might have had some pigs and you might have had a dairy farm and they all integrated together. You might even have cut up your own silage and things like that. They were all part of the dynamic of a mixed farm.

In those days I can remember going out to my uncle's farm and I can remember how the waste products from the dairy used to go to the pigs. I can also remember that pork producers of the day had big 44-gallon drums on the back of utilities and they would go around collecting the swill from restaurants and the like. Of course, in these days of foot-and-mouth disease we understand that those sorts of practices could not have continued. In fact, it is probably a good thing that they did not continue when we have heard the minister—who will be talking to us shortly—warn us twice over the last week in parliament of the gravity of this latest foot-and-mouth outbreak and how careful we have to be about the products we let into Australia. It is dangerous feeding swill to pigs and Australia is certainly very fortunate that it took those moves against that some time ago.

The other thing is that now it is a more professional industry and you find a lot of pork producers are either co-located with or are in adjoining regions to major grain-growing areas so that they are close to their source of fodder. However, the number of pork producers has declined, the average herd size has grown and productivity has doubled to 363,000 tonnes in the year 2000. The large increase in imports in recent years has pressured the industry into becoming more internationally competitive and to develop a position in the export market.

With this in mind, the new company will seek to ensure that the industry is able to cope with changes to the market and to deal with future challenges. By combining the three companies, it will mean that one company will have the power and the responsibility for setting strategic policy rather than it being split between service delivery agencies and peak industry councils. It will take away the confusion about the roles and responsibilities of the three interrelated bodies, resulting in a more effective administrative structure.

It is something that the industry wants. The producers have expressed almost unanimous support for the three industry bodies to be merged into a non-profit company controlled by the producers. The modernised proposal was formed by the industry and was presented to the government after extensive consultation and high-level support. Producers have maintained that they are happy with the new arrangements, which will see the industry company accountable directly to its members and, through its constitution and funding contract, also to the government.

The industry is pleased with the bill because for the first time levy payers will be able to have a direct input into the management and application of their levies. That is something that was not obvious when I spoke at some length on these issues back in 1998. It also means that there will be less government involvement in the industry, which will be more responsible for its own activities. In the end, you could say that the industry will be responsible for planning and managing its own future.

Pork producers will not lose out on any funding before the bill, with the Commonwealth continuing to match funds worth $3.6 million in 1999-2000 for the pork industry's expenditure in research and development activities. Also, 0.5 per cent of gross value of production will be in the form of a levy, such as applies in many other rural industries. This bill is another example of the government's continuing commitment to provide the pig industry with opportunities in the export market. It follows $24 million of funding by the government which went into an integrated package of business assistance programs for the Australian pork industry.

I was a bit disappointed that my Tasmanian colleague who spoke just before me in this debate said that the government was slow-footed and had not got around to some of these things. I do not think the evidence points to that at all. Considering that the crisis in the industry is barely 2½ years old, I think the government has responded very positively. That $24 million program was originally $19 million. If members have a look at some of the things that have occurred between 1998 and 2001, they will see that we have assisted pork producers with the development of business planning through the PorkBiz training program. We provided $3.4 million of assistance to 74 of the most severely affected pork producers from the 1998 slump that we have been talking about. We stimulated approximately $170 million worth of investment in pig meat processing infrastructure, something that was radically required at that time.

When foot and mouth hit one of the Asian countries—I think it was Korea—I can remember that a group of producers from my then electorate, who are now within the minister's electorate, together with another group at Gunnedah put their heads together and tried to fill the gap in this niche that occurred in the Asian market. Although they could find the pigs, they could not find one export accredited abattoir in Australia that would process the pork. In the end they had an offer from the Cannon Hill abattoir in Brisbane, but that was conditional on the pork itself being stored on the other side of Brisbane in some remote coldrooms. Obviously that was not going to be an efficient way to be highly competitive. In stimulating this $170 million worth of infrastructure, we have also been able to assist the industry quite dramatically.

We have also encouraged formal networks and stronger business alliances between producers, retailers and food service operators via the National Networks Alliance Program, and that worked very effectively. I can remember some of the supermarkets at the time pledging to take only Australian pork. The government also partly funded the formation of the Confederation of Australian Pork Exporters. It most recently funded the Singapore Market Alliance Program, which is a very interesting program. From memory, that program represents about 63 per cent of the Australian export market. I think the overall exports have increased—and the minister can correct me if I am wrong—by about 200 per cent, to $155 million, over the last two years. So it is a very valuable part of our market. Singapore does represent 63 per cent of our export market volume and exports to that market have increased by 58 per cent. That is just a measure of how well the industry is going. In the 12 months to December 2000 our Japanese market expanded by 18 per cent. So they are all good figures. I go back to my original comment: a lot of these things that stimulated those activities came out of this $24 million program.

When we look broadly at this bill we see that it picks up on those things we talked about in the 1980s—the many layers of bureaucracy, the lack of focus in the way levies were directed, the structures of the industry, the focus on research and development, and the focus on export. Now we can look at strategic plans and business grants to assist the industry with new skills, new business practices, better marketing information and improved infrastructure. We should also recognise that 12,000 people across Australia are involved in the industry in one form or another—from production on farms right through to pig meat processing and the small goods industry. Although the industry is small by international standards, it is a significant part of domestic primary production and an improving area of export opportunity.

I particularly commend the minister and the government on the bill and on the fact that the industry has so readily embraced it. I congratulate the industry for turning around an otherwise desperate situation in the mid-1980s. It is a demonstration to all primary industries how getting the structures right, getting the focus right, going after exports and being competitive can turn an industry around from a struggling group that was getting about $1.40 a kilo for its pork in the mid-1980s to one that now controls quite good prices in the $2 to $3 range, with very high quality pork very popular in the Asian market. Once again, I congratulate the minister and the industry and I commend the bill to the House.