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Wednesday, 17 April 1985
Page: 1164

Senator WATSON(5.23) —The Australian Dairy Corporation annual report for 1983-84 reveals the serious problems facing the dairy industry in Australia today. Unfortunately, successive governments have encouraged dairymen to rationalise, to invest heavily in new technology and in breeding programs, and to become more efficient. Rationalisation has taken place. Hundreds, perhaps thousands, of inefficient farmers have now left the industry over the past few years. Our dairy industry, particularly in Tasmania and Victoria, is now one of the most efficient and cost-effective in the world. Yet this very efficiency could spell its downfall, particularly if the Kerin plan is implemented and many of our young farmers, who are heavily committed to debts, are forced out of the industry. A lot of these high debt farmers will suffer most.

The report states that milk production has increased by 7.2 per cent in 1983-84. This increase, in turn, has led to further stockpiles of butter, skim milk and cheese-stockpiles which, one must acknowledge, we are finding it increasingly difficult to quit either on the domestic market, which according to the report is relatively static, or on the already oversupplied export market. Unfortunately, worldwide overproduction of dairy products often coming from overseas industries which are heavily protected has led to indiscriminate dumping, particularly by the European Economic Community. It has meant that unit returns from export markets have declined sharply, even though the volume of sales has increased significantly.

The report admits that because of these problems, which are essentially beyond our control at present, the dairy industry is indeed facing a crisis. In fact, the Corporation has predicted that 1984-85 will see a continuation of depressed marketing conditions and further declining returns with consequent undue hardship upon the industry, particularly the dairy farming community. Over 57,000 people are directly employed in Australia on dairy farms and in factories producing milk and dairy products. The future of half these people will be in doubt if the so-called Kerin plan is approved by the Senate in the next few weeks. The plight of this industry is demonstrated by actions which are uncharacteristic of people in the primary industries. For example, in the last few months we have witnessed many dairy farmers virtually at war with one another. There have been blockades of processing plants and discounting of manufactured products in an effort to reduce the huge stockpile of cheeses. There is disagreement and manoeuvring by different State authorities, highlighting lack of co-operation or a uniform plan of attack. Dairy farmers, already living below the poverty line, are agonising over decisions as to whether they should walk off their properties. There are unprecedented low prices on export markets, and milk bombs and abuse have been hurled at the Minister for Primary Industry (Mr Kerin) by angry and distraught farmers. Finally, the hastily constructed Australian Dairy Industry Conference plan, agreed to by all the States, has been thrown out, even before a reasonable hearing, in favour of the potentially damaging Kerin plan. Given such unprecedented events, I can but reiterate the closing remarks of the chairman of the Australian Dairy Corporation, Mr Malcolm Vawser, at page 8 of he report:

The dairy industry must be retained as a major contributor to the nation's economy, and accordingly it is to be hoped that any new arrangements can be concluded equitably--

I think that is the emphasis-

and with the widest possible support.

The problem with the Kerin plan is that it will dramatically affect in a sudden way the lives of a whole host of very efficient dairy farmers, particularly in my State of Tasmania, and also in Victoria.