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Monday, 22 March 2004
Page: 26847


Mr HUNT (8:18 PM) —I am delighted to rise and speak on the Dairy Produce Amendment Bill 2003 because I have within my electorate of Flinders a large number of incredibly capable, committed and passionate dairy farmers. Not long ago, I met with a representative from the office of the Minister for Agriculture, Fisheries and Forestry who came with me to Lang Lang, a rural town in my electorate. There we had dairy farmers from Lang Lang, Caldermeade, Yannathan, Kernot—all of these towns within my electorate of Flinders which are primarily dairying towns. There are people there who have given their lives to the service of the land and who have a passionate commitment to the land, to dairying and to the whole notion of providing a sense of backbone to rural and regional Australia.

The first thing I want to do in supporting the Dairy Produce Amendment Bill 2003 is to give my thanks and appreciation to those farmers who have given such service. Through organisations such as the Lang Lang Pastoral, Agricultural and Horticultural Association, they bring together a sense of community: they provide an economic base and a social base to the rural and regional communities of the Bass Coast shire. In looking at the role of the dairy community and the steps that this bill takes in order to help them, I also want to acknowledge that there are many dairy farmers, not just throughout Flinders but throughout Victoria and throughout Australia, who have done it incredibly hard through the drought, the adjustment program and the general climate of conditions that face rural Australia. We do extraordinarily well, but there are individual farmers, in particular in dairying, who do it hard. I have met many of these people at Lang Lang on numerous occasions, and they have talked of the hardships and challenges they face. They have genuine difficulties. In many cases, their concerns have led to family breakdown and tragedies on the land. So we must do everything we can to provide these farmers with a fair go and an equal opportunity. Where they are unable to make a living, we must help them make the transition into other opportunities. But we must never, ever leave or abandon these people who have done so much for the country.

I want to focus now on two elements of help for dairy producers. Firstly, before moving directly to the Dairy Produce Amendment Bill, I want to focus on the benefits which the government has just managed to secure for dairy producers under the United States-Australia free trade agreement. Under the free trade agreement, the Australian dairy industry will be able to send nearly three times as many current tariff quota products from year one, with ongoing quotas growing at an average yearly rate of five per cent. That is nearly three times as much from year one. This increase will be worth $55 million to Australian dairy farmers in the first year of the agreement. It is across the board for all dairy products, which are currently constrained by quotas, and will therefore provide significant new market opportunities for dairy processors and dairy producers. Upon signature of the free trade agreement, there will be real and immediate benefits for dairy producers in places such as Caldermeade, Lang Lang and throughout the area.

In addition, the biggest market access gains are in products where the Australian dairy industry is most competitive and sees great prospects for substantial growth. The deal includes access for dairy products previously excluded from the US market such as certain cheese, butter, milk, cream and ice cream products. Examples include 7½ million litres of milk, ice cream and cream, and 2,000 tonnes of European style cheeses. All of those are real benefits which should accrue in a short period to Australian farmers and, in particular, to dairy farmers from throughout the Western Port and Bass Coast areas.

That leads me to the particular elements in the Dairy Produce Amendment Bill 2003. The bill seeks to amend the Dairy Produce Act 1986 in response to changes in the status of the Australian Dairy Corporation and the way in which it is transitioning into Dairy Australia. The bill does three things. First, it enables the company to be fully indemnified out of the assets of the Dairy Structural Adjustment Program. That is an important structural step. Second, it enables Dairy Australia to enter into and perform financial arrangements other than borrowings. Third, it enables Dairy Australia to enter into and to perform contracts and other arrangements for managing risk associated with the administration of the Dairy Structural Adjustment Program. These may seem technical reforms, but in essence they are about assisting farmers in the transition and in their ongoing dairying activities. As part of that, the bill seeks to assist Dairy Australia in its ongoing management of the Dairy Structural Adjustment Program to ensure that there are prudent and genuinely practical financial management arrangements for the fund.

What does that mean in terms of benefits to farmers and to other stakeholders? First, the indemnification of the company means that normal practices will be in place so that directors bear no personal risk in their role of administering and managing the fund. Intrinsically, if a company is not indemnified and directors face personal risk, that will lead them to be overly cautious in their activities, which might not mean good and prudent administration and management of the fund. They have to be able to take genuine steps, as normal managers, and of course there are consequences if they fail to live up to their responsibilities. However, this is about professionalising the management and marketing of Dairy Australia.

In addition, the benefits include setting out the activities that the fund can engage in. That lessens the ambiguities as to how the fund is to be administered and managed. The activities it can and cannot engage in are clearly defined. That is important because the fund collects levies and dispenses assistance payments to farmers and that in itself is about the fund being properly managed and well established for the future of the industry.

I want to raise a few issues about the background and about the importance of the bill. With regard to the background, Australia has been through a process of structural adjustment in the dairy industry. For farmers in Flinders and for people in the Bass Coast region who rely on the dairy industry there have been many benefits. However, one of the complaints that many of them, including the manager of the Caldermeade dairy, made was that they sell their milk at a price, but receive it back if they purchase it on the open market as a finished product at a multiple. There is a need to take into account the challenge faced by producers and perhaps we should be encouraging more competition in the completed production side as opposed to the dairy side. That would be a very important step. We should do everything we can to encourage competition on the production side to give dairy producers the chance to shop around and to sell their milk at the best possible price; that is something that we owe our farmers.

In conclusion, the bill is important because it provides indemnity to the company to ensure that the directors act with a genuine force and commitment on behalf of the farmers and the dairy industry. Therefore, the company will be able to carry out genuine risk management activities; the industry will be able to move forward as a modern professionalised industry and, in turn, that is a step towards helping farmers, many of whom have done it hard. I make no apologies for putting forward on the floor of this House the concerns of my dairy farmers. Some of them have struggled. Some of them have done exceptionally well and, as a result of structural adjustment, the industry as a whole has performed better. However, there are dairy farmers who have done it hard.

Ultimately I thank my dairy farmers from Lang Lang, Caldermeade, Kernot, Almurta, Yannathan and so many different parts of the Bass Coast and the electorate of Flinders for their passion and commitment to the land, and for their work and contribution to the community. Beyond that, I commend the bill to the House because it is part of an ongoing process of ensuring that Australia is prepared to compete in the world, that we recognise the challenges that we face and, by making the structural adjustments that we have made and continue to make, we will be in a position to take advantage of agreements and outcomes such as the US free trade agreement. As I have said, from year one, the US free trade agreement will deliver a benefit of $55 million to Australian dairy farmers. I commend the bill and the agreement to the House and I thank the dairy farmers for their work and contribution to Flinders, to the Victorian economy and to Australia as a whole.