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Monday, 14 September 2009
Page: 9551


Mr CHESTER (7:46 PM) —I would like to commend the member for Murray for putting this important motion before the chamber and I associate myself with the comments she made, particularly in relation to the need for government assistance for the dairy industry at such a critical time in its history. The member for Murray and the member for Lyons understand the importance of the dairy industry to their communities and the great difficulties that farming families are facing, particularly with reduced prices and the ongoing drought. It does beggar belief that, in that environment, Melbourne Labor ministers at state level would be stealing water from the Goulburn River. But then again they are about to steal another 10 billion litres from the Thomson River in the electorate of Gippsland, and that is an issue for another day.

The dairy industry is as critical to the seat of Gippsland as the car industry is to a city like Geelong and yet we have seen a remarkable double standard in the government’s treatment of the two industries at this time of economic crisis. It is a crisis which I stress is beyond the control of individual dairy farmers. I note with a great deal of interest that the Senate is about to undertake an inquiry into a range of issues which are relevant to the motion which is before the chamber. That inquiry will investigate the economic impact on the dairy industry of the reductions in prices that are paid to producers by the milk processors. There are a whole range of important issues that the Senate inquiry will consider, particularly in the context of the ongoing drought conditions in parts of Australia and the fact that the cost of production for many of our dairy farmers is higher than the prices that are currently on offer at the milk factories.

The dairy industry in Gippsland is concentrated in the Macalister irrigation district, which is the largest irrigation area south of the Great Dividing Range in Victoria. As I have told the chamber previously, our dairy farmers are among the most productive and efficient in the world. They are world-class producers of a world-class product. The dairy industry is quite big business for the people of Gippsland, with the Wellington shire having more than 400 dairy farms, the majority of which are located in the MID. The region has its own major collection and processing facility at Maffra, with the Murray Goulburn co-op, which produces a range of products mainly for the export markets.

My community has been particularly hard hit by the drop in prices and I have sought assistance from both the state and federal agriculture ministers for the development of an industry assistance package. I have argued in my correspondence to the ministers that the dairy industry has a strong long-term future in the region but there is a need to assist my community as it deals with the current difficulties. I am particularly concerned about our younger farmers who may be carrying significant levels of debt. I believe we need to give them confidence in their futures on the land. I have taken up the point in the member for Murray’s motion that the government could provide assistance to ensure our dairy farmers are not forced to sell their herds or their water, destroying the prospects for recovery when export markets inevitably recover.

As I said, I am optimistic about the longer term future but we need to take action now to help our farmers get over the hump before them so that they are in a position to continue to produce quality Australian dairy products in the future. There needs to be a survival plan developed to assist our farmers through what I believe will be a difficult 12-month period. Both state and federal governments need to demonstrate their support for a viable dairy industry right across Australia and be prepared to offer assistance during this period.

As a nation we have bailed out the car industry, as I referred to earlier. We have also handed out billions of dollars in $900 cheques to prop up the retail sector. I think it is reasonable to develop an assistance package for the dairy industry in these exceptional circumstances. It would be a modest package in comparison to those cash splashes that we have seen by the government. I have received a reply from my representations to the federal Minister for Agriculture, Fisheries and Forestry, and I am afraid there is no good news for my local farmers in his response. There is no intention of taking decisive action.

While the minister’s response was certainly sympathetic, reflected an understanding of my concerns for the dairy industry, there is no sign that he is actually prepared to take action. He indicated, on a visit to Shepparton, he is aware of the challenges facing the dairy industry in terms of the ongoing drought, the sharp fall in global dairy commodity prices and the decisions by the European Union and the United States to introduce export subsidies. But that is about where it ends from the minister’s perspective. His response is certainly sympathetic and it reflected that understanding of the concerns. However, I urge him to be more than sympathetic, I urge him to be a champion of the industry that he is commissioned to represent in this place.

Many farmers have suggested options to me, including a range of measures such as temporary income support to underwrite low prices or triggering exceptional circumstances interest rate subsidies and increased assistance to develop international markets. The minister says that he is dealing with that final point and there has been some improvement in the situation with India, along with funding for Dairy Australia to host dairy events in Dubai and Saudi Arabia. I doubt though that we are doing enough and the end result will be more dairy farmers forced off the land.

Referring again to the situation in Gippsland, I would like to comment briefly on the government’s stimulus spending. Apart from the current prices, which hopefully will pass, the biggest issue for dairy farms in my electorate is the issue of water security. It staggers me that this government has been prepared to hand out $900 cheques but has not even looked at a critical issue, such as investing in improved infrastructure delivering increased water security in Gippsland. The dairy industry in Gippsland is faced with ageing infrastructure and an inefficient system. The MID 2030 Strategy was released two years ago and can improve the supply system. This would be a win for the industry and a win for the environment. I urge the minister to be a champion for that cause as well.