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Tuesday, 25 February 2014
Page: 832


Mr ZAPPIA (Makin) (18:55): I rise to speak in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 and the amendment to this legislation moved by the member for Hunter. This bill will amend the Primary Industries (Excise) Levies Act 1999 to enable an increase in the maximum rates of the Australian Animal Health Council levies on dairy produce from 0.058 cents to 0.145 cents per kilogram of milk fat and from 0.1385 to 0.34625 cents per kilogram of protein. I have to say that I pity the people who have to work out the real dollar figures relating to those figures!

The bill will not increase the operative rate paid by industry members and does not impose a financial burden on the dairy farmers at this point in time. That is a matter for the industry itself, and it will be a matter that they will have to put to their members if they want to increase the actual levy being paid. But what it does do is to lift the cap which, in turn, enables the industry to lift the levy if it so desires. In doing so, that will enable Australian dairy farmers to meet their requirements as a signatory through the dairy industries to the Emergency Animal Disease Response Agreement and also to meet any obligations in the event of an emergency response, including costs that may be incurred as a result of that emergency response.

As other speakers have pointed out, dairy is an important industry to this country. It generates around $13 million a year in farming, manufacturing and exports. I understand that it is the third-largest rural industry in the country. I also understand that about 40 per cent of Australian milk is exported, and that in turn generates something in the order of just under $3 billion per annum. It represents about seven per cent of the world dairy trade; it is not insignificant. By any measure it is indeed an important industry sector for Australia because of its economic value and, just as importantly, because milk is an essential food commodity. I cannot imagine life in any country without milk and dairy products. It is in our national interest, therefore, to ensure that our dairy industry remains viable and continues to grow.

Central to that viability is the industry's ability to maintain its disease-free, safe and healthy product standard. Quite properly, other speakers have talked about the clean, green image of the dairy industry in Australia. It is an image, I must say, that applies to most of the food that is produced in this country. I agree with the member for Calare that it would have to be one of the biggest selling points of Australian produced food to the rest of the world. I am sure it is.

The Australian Animal Health Council levies are used to allow the dairy industry to meet its requirements as a signatory to the Emergency Animal Disease Response Agreement and to be able to respond to that in the event of an emergency. I made that point in my opening remarks. That is an important element of ensuring that we maintain and retain that clean, green image that we have spoken about.

Of course, it is also in the national interest from the point of view of health to ensure that Australian dairy products remain both nutritious and disease free. Australian dairy farmers are the backbone of the Australian dairy industry, and I make the point that most of the dairy industry in this country is the collective work of individual dairy farmers. Only a small amount of dairy farming is carried out by corporations in this country or by share farmers. Most of the farming is done by owners of those farms—in many cases second, third and fourth generation farmers.

We have seen in the last three decades a real decline in the number of dairy farmers in this country. The numbers have fallen from around 22,000 in 1980 to just over 6,000 today. In my home state of South Australia, where dairying was once a fairly important industry, we had something like 1,700-plus dairy farmers and are now down to about 268 dairy farmers. I know the local dairy farmers there have for some time been struggling to make ends meet. We saw at the turn of the century—I think in July 2000—the introduction of the dairy industry adjustment levy as a way of rationalising the industry. Along with that we saw the exodus of many dairy farmers from the industry. The adjustment levy ended in February 2009 because it had served its useful purpose. We did see a huge transition and adjustment throughout the industry.

We also saw dairy farmers being hit by falling milk prices, milk price wars, droughts, a deregulated Australian market and free trade agreements—all of which added additional pressures to our dairy farmers. Added to that was the high Australian dollar. A high Australian dollar never helps our exports. Around 40 per cent of our dairy products are exported so, undoubtedly, the high Australian dollar has had an effect on exports and in turn on the income of the farmers who rely on those exports.

Yet despite all of that the Australian dairy industry does have a strong future and the international players know it, as evidenced by the recent fight over Warrnambool Cheese & Butter that included Saputo, the Canadian company that ultimately took a controlling interest in Warrnambool Cheese & Butter. We saw how hard that was fought between Saputo and other industry players. We saw today reports in the media that Chinese entities, some of which are owned by the Chinese government, want to invest in plants in Australia to manufacture milk powder to be shipped directly to China. I understand those discussions are taking place now. That interest is real. They want to invest in several plants around the country. Furthermore, we see companies like Fonterra, Kirin and Lactalis showing no signs whatsoever of exiting Australia. That tells me that the people who best understand the industry see a future in the Australian dairy industry and are optimistic about that future.

We should, nevertheless, be prepared to respond to any emerging risks and threats. In particular I want to talk about the risks associated with climate change and changing weather patterns. I notice that the member for Hunter also referred to those risks. Changing weather patterns present two critical risks. The first is to the production of food and water that is required by the cows. According to some figures, it is estimated that you need up to about 1,000 litres of water to produce one litre of milk and that each cow requires around 1.6 tonnes of feed per year. If those figures are correct—and I assume that they are, or are at least somewhere near the mark—then clearly if the climate changes, as it has done in recent times, it will impact on our ability to provide water for the cows and water to produce the feed that is required by the cattle. It is a real risk that we need to address. We have already seen many parts of Australia in drought and right now we are seeing drought affecting dairy farmers in New South Wales. It is a matter that we simply cannot continue to ignore. By doing so, we are turning our back on the dairy farmers.

The second risk with climate change is associated with diseases because, as the climate changes, our ability to manage different, new and emerging diseases also has to change. We have to be ready for those kinds of changes because climatic changes do more than just affect rainfall patterns. Yet many government members in this place continue to deny the reality of climate change and in turn the threats that those changes pose to Australia's dairy industry. In doing so, members opposite are doing the dairy farmers, who happen to be mainly their constituents, no favours whatsoever.

Even if members opposite do not accept that the climate is changing, the drought that New South Wales farmers are experiencing right now is real, their struggles are real, the effects on their health are real and their pleas for government assistance are real. Yet what we have seen over recent weeks from the Abbott government, from the Prime Minister and from the Minister for Agriculture is procrastination. I heard the member for Hunter saying earlier that he has picked up that there might be an announcement tomorrow with respect to drought assistance for those farmers. I hope he is right because, quite frankly, every day assistance is delayed I am sure adds to their stress and to their woes.

One thing the government could do is reinstate the $40 million that has been withheld from the farm finance low interest loan scheme and lower the interest rate associated with that scheme. As I said, farmers need that assistance now, not when it is too late. What they do not need is talk and platitudes; what they need is real assistance.

The animal health and welfare body is a not-for-profit public company established by the federal and state governments with membership from a cross-section of livestock industry bodies. Dairy Australia is one of the five associate members of animal health and welfare. It has a stake in the operations of that organisation. The organisation plays a critical role in ensuring that we as a nation are always one step ahead of the risks and threats to that particular industry, and I believe it plays a critical role in that regard. Of course, it needs to be properly funded if it is going to do its work and do it properly. This bill enables the industry to raise its contribution to the work of animal health and welfare and, in turn, do the work that is necessary and in the interests of the dairy industry of Australia. I therefore support the broad principle of this bill, albeit I support the amendment moved by the shadow minister for agriculture.