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Tuesday, 14 May 1985
Page: 1902

Senator ARCHER(4.46) —I want to speak on the dried vine fruits Bills, mainly because the dried vine fruits industry deserves support from this Government and from members of this Parliament. It was interesting to note that the Government was able to muster only one of its members to speak on this legislation when it was before the other place. I regret that the industry is not taken more seriously by the Government. I also regret that it is noticeable that not even one Government senator is on the speakers list for this debate today.

Senator Robertson —That has nothing to do with it, and you know it. We want to get home.

Senator ARCHER —Senator Robertson says that it is far more important to get home than it is to debate adequately legislation concerning the productive industries of Australia. Of course, this industry is given minimal consideration because it is predominantly centred in three electorates, not one of which is held by the Government. I find it very disturbing that the industry found it necessary to report that the Government did not even see fit to discuss this matter with it prior to the presentation of these Bills. I seek leave to incorporate in Hansard a copy of a letter from the Australian Dried Fruits Association in which these regrets are expressed and the effects of the legislation are laid down very clearly.

Leave granted.

The document read as follows-

ND061 April 19, 1985

The Hon. J. Kerin, Minister for Primary Industry

Dear Mr Kerin,

The ADFA is extremely disappointed with the measures announced as aid to the DVF Industry.

The ADFA also regrets that the Government has seen fit to introduce legislation on these matters prior to consultation with the Industry via the ADFA. It appears the Government has acted with indecent haste in framing and tabling this legislation without the usual, time-honoured negotiations with the ADFA. In the present case the Government appears to be riding rough-shod over the Industry, as a paper by your Department explaining the proposals is yet to be received but already the Amendment Bills are before the Parliament.

The proposed measures will not 'establish the DVF Industry on a more secure footing' as indicated in your announcement. On the contrary, the greater uncertainties brought to bear on DVF producers by the Government proposals will not only force out marginal growers but will cause stagnation of the whole Industry.

The Government has failed to provide any base on which the innovative and progressive growers can plan their investment decisions.

There are no production targets, no additional constraints on imports, and greater instability of incomes.

The ADFA believes the Government has failed to recognise that while aiming to reduce tonnage available to export markets, it is essential for Australian producers to maintain, and where possible, improve the competitiveness of Australian DVF on world markets.

There are national rewards to be gained from an efficient DVF Industry which can only be achieved where growers are given the security to commit their human and financial resources. The present plan does not provide this security.

The major consequences of present proposals are:

1. The rejection of a market entitlement scheme prevents the formulation of an Industry production target, and fails to provide the clear market signals needed by growers.

2. A greater instability in returns to growers in future years due to equalisation levy ceilings. These ceilings would force Australian prices for DVF to wildly fluctuate.

3. The low prices for any period on the Australian market would be the base for future prices. Returns to growers lost from the Australian market in any period would not be recovered but would be compounded forward.

4. The peaks demonstrated by the Government's equalisation levy formula would be unobtainable because of market pressures. For example the Government formula when applied to past seasons shows that a price increase of up to 37% should theoretically have been applied to the Australian market. However, the market would reject any price increase of this magnitude, and if forced upon buyers, would result in dramatic losses of sales and an increased export dependence for the Industry.

5. The periods of low Australian prices could be enforced on the Industry and lead to dramatically reduced returns to growers because of pressure from buyers and the availability of imported fruit.

6. There is no increased protection from imports. While an import duty of $200 per tonne was retained this is being rapidly eroded in real value by inflation.

7. The $5 million adjustment money was inadequate to grapple with the adjustment needs of the Industry. For example, even if the sum was fully expended on vine pull compensation, less than 5,000 tonnes of production was likely to be removed from the Industry.

8. There must be considerable doubt whether $5m funding for adjustment will be achieved. For the first time for a rural adjustment program, contributions would be required from the States. It is known that Victoria, the State with the greatest DVF adjustment need, may be reluctant to support the scheme upon the terms announced by the Commonwealth. Significantly there appears to have been little, if any, consultation with the States prior to the announcement, and no commitment of any State funds to date.

The one positive aspect of the proposals is the improved underwriting of returns. The new scheme will go much further in meeting the unachieved aims of the existing scheme to provide relief from sudden dramatic falls in returns to growers.

However, like the old scheme, the new underwriting provisions are planned to apply to sultanas only with the result that currant and raisin growers would be seriously disadvantaged. The revised equalisation arrangements and the resulting severe grower income fluctuations will hit currants and raisins yet there is no provision for underwriting.

I regret that there has been insufficient time allowed to make personal representations to you. A fuller assessment of the proposals is presently en-route to you with a copy also despatched to your Department.

Yours sincerely, H. M. TANKARD Chairman

Senator ARCHER —The Government's attitude on this and similar industries is impossible to understand. The effect of this legislation is not to aid efficiency and improve grower competitiveness; it is exactly the opposite. It cannot but help reduce the industry's capacity to improve technology even further in order to keep Australia's dried fruits industry on top of the world in terms of quality. Australia's dried fruits are, as we all know, absolutely second to none in the world when it comes to quality. What we should be doing is ensuring that they stay that way by making the industry profitable, keeping it profitable and keeping the product on top.

As a previous speaker in this debate has mentioned, Australians eat more dried fruit than do people in any other country. I hope that this trend continues and that we increase consumption, because the quality and value of this product are absolutely tremendous. We need to remember that about 50 per cent of the major crop is sold to processor users and that the importance of a regular stable market just cannot be overemphasised. One needs little imagination to see the extent of the problems that would arise if it became too difficult for those users to keep abreast of wildly fluctuating markets. The industry, as we all know, has done much to keep both supply and price stable in the interests of long term production and consumption. For some philosophical reasons, the Government has determined that that is undesirable and has decided that full market fluctuations should be let loose, even if it totally disrupts the production of these products and leads to an ultimate loss of market.

Perhaps in summarising the debate the Minister will give some rationale for this decision or the Government's assurance that this may not be so. It is not that the profit of the growers is excessive-far from it. It is not the case that prices have risen to unreasonable levels because, in fact, they have only kept roughly in line with the consumer price index. It is not that they are insignificant in the field of employment, as 4,000 people are directly employed in the industry and a total of 17,000 people in all live off it. What has happened is that due to high subsidy and overproduction elsewhere in the world, the use and sale of grapes have moved certain markets. The three areas mainly involved are southern Europe, California and the River Murray area.

Changing varieties of grapes and changes in the use of specific varieties obviously bring changes to the industry. Mostly these changes are relatively short term and there is a shakedown. Probably one of those periods is with us right now. If the Government believes that ironing out the industry after a couple of difficult years will solve the problems, I think I can assure it that it is wrong again. There will always be bad years and good years and usually, regrettably, this seems to depend on someone else's disaster somewhere else in the world, but it happens often enough and the climate in Australia is dependable enough that we are able to have good fruit in years when others do not.

What do we know about the dried fruits industry? We should know a good deal because I understand there have probably been more inquiries and more reports on this industry than on any other in Australia. When I talk to people in the industry or people who depend on the industry, I gather that not one of those inquiries has shown up anything which the industry and those involved in it or interested in it have not already known. Basically, of course, there are two parts of the industry. There are those growers on farms established for war service land settlement and in many cases still growing varieties with poor market appeal, produced under less than ideal conditions and giving fairly poor crops. They do, however, provide homes for many people, often war veterans and/or migrants, and they provide some income to those people. There is no known present alternative profitable use for those farms and, as of now, the people who work them cannot even retire on the farms because of the nature of the assets test. The other group is very modern and well equipped, using the best technology in the world and getting production again probably better than anywhere else in the world. But, regrettably, this legislation treats them all the same. There can surely be no valid reason for the exclusion of domestic sales from the formula for equalised returns, nor for the exclusion of currants and raisins. I still request the Government to consider including those items, even at this stage. The industry injects almost $200m into the economy of the Sunraysia area alone and, without reasonable stabilisation, the future of that area looks very shaky.

Other speakers have mentioned fluctuation. I would make the point that in 1980 the sultana price was $1,260 a tonne; in 1984 it was $650 a tonne; in 1985 it is $900 to $950 a tonne. Anybody can see the need for an effective scheme of stabilisation. Men like Mr Henry Tankard, the Chairman of the Australian Dried Fruits Association, are world leaders and top men among primary producers of any type in Australia. They justifiably raise the matter of lack of consultation. They recognise the problems of a vine pull scheme which may reduce the actual quantity of grapes only by a very small amount. Apparently no proposal has been put to the States as to their contribution to and supervision of the vine pull and there is nothing in the arrangements to place any constraint on new plantings going on possibly at the same time.

I and the industry fully recognise the nature of the industry and the problems that have been part of it since the first soldier settlers went to the areas in about 1920. The best thing this Government could be doing right now would be to remove some of the uncertainties to enable those with a future to settle down and continue to lead the world. But this legislation cannot and will not do that. It will only add to the uncertainties and will bring stagnation to the whole industry. If these Bills are passed, it will require another batch next year to try to tidy up some of the mess that will be left behind. We see a government approach where there are no production targets and no extra constraints on imports.

I feel free to ask just what is the intention of these Bills. Where does the Government intend to stop in its selling of Australian jobs and investments to subsidised overseas nations? The European Economic Community in particular must be delighted to feel that Australia, like no other country in the world, is prepared to abandon its productive, efficient primary sector and to give it to the EEC on a plate. Perhaps it is some philosophy that I know nothing about. Perhaps it is just a theory developed by some academic who has no idea of life in the real world-someone whose job is secure, whose income is indexed and who determines what happens to those whose life is at stake and those who provide jobs for others and not only support communities in regional areas but provide valuable export dollars for Australia's declining international position. What we need now-more than has ever been provided in the past-is an effort to assist these sorts of industries and to build up our incomes in the years ahead.