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Thursday, 26 September 2002
Page: 4992


Senator O'BRIEN (12:53 PM) —The Dairy Industry Legislation Amendment Bill 2002 amends the Dairy Produce Act 1986 to give the Australian Dairy Corporation a key role in the planning and facilitation of reform to the delivery of statutory services to the Australian dairy industry. Additionally, the bill provides dairy farmers in receipt of assistance under the Dairy Structural Adjustment Program or the Supplementary Dairy Assistance scheme with access to Farm Help re-establishment grants—access that has been denied since the end of the Dairy Exit Program on 30 June this year.

Senators will be aware of major changes in the Australian dairy industry over the past few years. Full domestic deregulation in July 2000 saw state dairy authorities disappear and forced significant change on the industry. Deregulation was supported by a majority of dairy farmers but it has nevertheless caused much pain, particularly at the farm level, in quota states such as New South Wales, Queensland and Western Australia. This pain has been ameliorated to some extent by the Dairy Structural Adjustment Program. Nonetheless, dairy farmers have had their fair share of battles in recent times.

Deregulation forced change at farm and company level. Now the industry itself seeks change in the way that dairy industry services—particularly promotion, research and development—are delivered. For over 12 months, the dairy industry has been working on a proposal for a new industry structure. Following extensive consultation, the industry has determined that it is desirable to merge the service activities of the Australian Dairy Corporation and the Dairy Research and Development Corporation into a single industry services body, preferably in the form of a Corporations Law company. The industry has identified the following benefits in its plan: firstly, greater accountability to stakeholders through industry ownership and control; secondly, better coordination of research with trade, promotion and marketing activities; and, thirdly, more efficient service delivery. A dairy industry newsletter, dated September 2001, says of this new levy-funded company:

The increased flexibility will allow the company to easily adapt its roles and structure to changing industry requirements and the commercial and social environment.

The dairy industry's desire for a new industry services structure is the very basis of the bill before the Senate. The bill does not provide for the implementation of the structure but rather gives the Australian Dairy Corporation the capacity to begin the task of investigating options for reform. By providing the Australian Dairy Corporation with this capacity, the bill allows the process of reform to begin in earnest.

It is out of character for the Minister for Agriculture, Fisheries and Forestry to respond to industry requests for assistance and leadership in anything approaching a timely fashion. We all know that the minister, Mr Warren Truss, has had a few other things on his mind over the past few months. It takes no small amount of talent—and, I am sure, energy—to simultaneously bungle exceptional circumstances reform, administration of the US beef quota and assistance to the sugar industry, but Mr Truss has given it his absolute best shot. Fortunately, the minister has not bungled the dairy industry—at least, not yet. The industry wants a new structure in place by July 2003. Upon passage of this bill, I urge the minister and his department to give the ADC, and the industry, all the assistance it needs to develop a properly considered reform model. There are many complexities involved in transferring functions and funding from statutory bodies to Corporations Law companies, and providing the ADC with the capacity to facilitate investigation of this matter is a prudent action. But the government must not use this action to delay active assistance to the industry to investigate and formulate a final reform model.

The dairy industry is one of Australia's most important rural industries. That is why it is so important for the government to pay serious attention to its responsibilities to assist this industry to prosper. The industry comprises 12,000 dairy farms across all six states. It is a sign of the impact of deregulation that the number of farms declined by almost 1,000 in the period 2000-01. The Australian dairy industry is a major generator of economic wealth, a significant exporter and a key employer—particularly in the primary production, manufacturing and distribution areas. Most dairy jobs are found in regional Australia.

During the winter recess I had the pleasure of visiting King Island, in my electorate. I met with some of the managers and employees of the King Island Dairy company. I do not think it will upset too many other dairy companies in Tasmania if I say that King Island Dairy has a justifiable reputation for producing some of Australia's finest dairy products. King Island Dairy's specialty cheese products are truly world class. That is no surprise to anyone who visits the island and experiences its superb natural conditions and environment. But we all know a good environment is, of itself, not sufficient to produce quality primary produce. The farmers and processors at King Island Dairy share one key characteristic with other members of the Australian dairy industry: a commitment to securing and building the industry for the future. That is why the industry presented a plan to the government, and that is why it is so important that the government—in particular, Minister Truss—gives the industry the assistance it needs to finalise its reform plan. The opposition will support this legislation because it represents an important step towards the realisation of a better industry framework.

The second aspect of this bill is the provision of access to exit assistance under the Farm Help re-establishment grant scheme. Access is provided to holders of Dairy Structural Adjustment Program and Supplementary Dairy Assistance scheme entitlements on the same basis as that provided under the Dairy Exit Program. This is a sensible move and the opposition supports it. However, we need to ask why it is that the government failed to introduce this measure before the cessation of the Dairy Exit Program on 30 June this year. I fear it is yet another sign of Mr Truss's unwillingness or inability to give his portfolio the attention it deserves. The opposition agrees to the passage of this legislation and will monitor very closely the support the Minister for Agriculture, Fisheries and Forestry provides for the industry once the Australian Dairy Corporation commences its reform work. Dairy farmers, processors and distributors deserve assistance from a minister and a government that have a track record of taking Australia's primary industries for granted. Labor will ensure that the future of the dairy industry remains firmly positioned in the mind of Mr Truss as the reform process proceeds.