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Wednesday, 24 August 1994
Page: 270


Senator O'CHEE (6.50 p.m.) —I move:

  That the Senate take note of the report.

The report of the Department of Foreign Affairs and Trade entitled Subsistence to supermarket: food and agricultural transformation in South-East Asia is interesting. It is a substantive work in terms of volume and has quite a lot of detail. Obviously, it has not been possible for me to read the 370-odd pages in the time that the document has been available to us. I focus, however, on some comments made in the document in relation to Vietnam. Whilst the document is generally fairly accurate, from what I can see, particularly in relation to its comment on Singapore and Brunei, I think it is appropriate to look at the comments that have been made about Vietnam, especially in view of the current interest in this country about liberalisation in Vietnam and some of the hype that has been going around.

  On page 179 there is a prediction that the government will be unlikely to increase the scope of sugar production. I think the exact phrase is that the scope of further expansion of sugar cane production would appear limited and mainly focused on domestic demand. This comment is inaccurate. It is true that in previous years production of sugar has never exceeded 475,000 tonnes of raw sugar equivalent; last year it was about 420,000 tonnes.

  But it is also very clear that the government has set as one of its priorities an increase in the production of raw sugar to one million tonnes per annum by the year 2000. It is not correct to say that there is limited scope for expansion of the sugar industry. In fact, the government is setting aside areas and is expected in the next year or two to open up an entirely new area for the production of sugar cane. The problems which have existed to date have been problems in relation to the processing of cane.

  It is entirely possible that they could get substantially greater volumes of cane in Vietnam than are currently being grown at the moment. Remember that in Vietnam every single tonne of cane is cut by hand; most cane is grown on farms that do not exceed 1 1/2 hectares; and the cane is cut by the people who grow it. There is no effort at the moment to put mechanisation into the harvesting of cane and the varieties of cane that are grown are old and inefficient and the yields that are being achieved are very low.

  As a consequence, there is substantial scope for improving the tonnage of cane which is cut, particularly with substantial investment from Taiwan. I know there is a proposal for the Taiwanese to build a sugar mill as well as plant between what I understand to be several hundred thousand tonnes of cane. There is very good scope for improvement in the tonnage of cane that will come off, and that will be driven very heavily by foreign investment. So I think it is a little dubious for us to assume that there will not be some growth in cane production.

  I also note that the document overlooks one of the areas of growth for the Vietnamese agricultural industry, which is palm oil production, again driven on the back of investment from principally Malaysia this time. That is in reaction to a slow but noticeable increase in the cost of farm labour in Malaysia. Of course, palm oil production being reasonably labour intensive, the Malaysians have sought to move outside Malaysia and there has been very heavy investment in Vietnam.

  I conclude my comments tonight by focusing on the comments about cattle production. It is true that cattle numbers have doubled to around 3.3 million head over the last decade. But that does not equate to good quality cattle or beef production. The average weight of an animal going to market, I understand from the national veterinary company, is only 200 on to 250 kilos live weight. The reason why the animals are so small at the age of three years is that they have been worked in the field pulling a plough for two or three years before finally being knocked on the head. As a consequence, they are animals of low carcass quality.

  If we add to that the fact that there is rampant foot and mouth disease and tuberculosis, that there are no disease control mechanisms to prevent animals moving from infected areas to non-infected areas and that the farmers do not have the money to invest in looking after those animals, I think it is fair to say that the Vietnamese cattle industry does not offer a substantial threat to Australia.

  There will be a big increase in the demand for meat coming into that area as a result of increasing standards of living. I think that is an area that we should, as a primary producer nation, be seeing as a big growth area for this country. At this point, unless somebody objects, I seek leave to continue my remarks later.

  Leave granted; debate adjourned.