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Wednesday, 10 September 2003
Page: 19773


Dr STONE (Parliamentary Secretary to the Minister for the Environment and Heritage) (9:43 AM) —I have said before in this parliament that, when primary producers do not receive a price for production of food and fibre sufficient to cover the full costs, including the environmental externalities, it becomes extremely difficult for them to reinvest back into water, soil, air and biodiversity protection. They know what they need to sustain their country but, as they often say, they cannot be green when they are in the red and they cannot pull up their socks if they have none.

The problem for primary producers selling to the domestic market is that the market power exercised by the duopoly dominating the supermarket sector enables those big companies to wring their significant growth in profits from the margins of their suppliers—the farmers. In domestic markets, the Australian government aims to protect farmers and small businesses from serious misuse of market power through sections of the Trade Practices Act, in particular sections 46 and 51AC. Recently, we introduced a grocery ombudsman to help mediate in disputes in vertical relationships between any part of a value chain.

We also aim to provide some protection through legislation where it can be proved that imported product has been dumped and so competes unfairly in this country. But this week sees our Minister for Trade tackle the oldest problem of all: the problem of corrupted subsidised international trade in agricultural production. For generations, Australian and New Zealand farmers have been among those least likely to be in receipt of government subsidies but those most in need of export trade activity, participation and profit. However, Australians and New Zealanders have to compete in export markets where the alternative imports or the domestic producers in those markets are massively subsidised or protected behind tariff or quota barriers.

Subsidising countries argue that their national food security or their regional cultural integrity is dependent on the survival of their farmers and, hence, on massive cross-subsidisation from their consumers back to the farm gate. In reality, the cost to the environment of inefficient agriculture is significant. Forests are unnecessarily cleared, catchments are dammed and biodiversity is reduced. Nor can it be argued that the consumer in these countries is better served by being denied access to reasonably priced Australian or New Zealand food—a clean and disease-free product from countries where agriculture is practiced in a highly ethical and efficient way. We saw dairy farmers take 30 per cent off their bottom line over just three months recently, when export prices crashed.

Australia and its 16 Cairns Group allies want export subsidies phased out and eliminated, domestic support payments reduced substantially and barriers to market access slashed. They will attempt to do this in the WTO, where for generations now there has been resistance to freer agricultural trade. I call upon the WTO to work harder on this. No-one benefits from what happens today. Our farms' futures depend on a fair go. (Time expired)