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Friday, 6 December 1935

Senator BRENNAN (Victoria) (Assistant Minister) . - I move-

That the bill be now read a second time.

I desire to illustrate to honorable senators, by means of a few figures, the importance of dairying, which is one of the most extensive and widespread of Australia's primary industries. It is conducted in every State, and in most of them is one of the principal industries. Only in South Australia and Western Australia is it confined within comparatively narrow limits. Throughout Australia, dairying occupies the attention of 150,000 farmers. At the commencement of the present century, Australia possessed about 1,000,000 dairy cows, and produced approximately 47,000 tons of butter and 5,000 tons of cheese, whilst the butter exported totalled 17,000 tons annually. To-day there are about 3,500,000 dairy cows in Australia, butter production has reached 200,000 tons, and cheese production 17,000 tons, whilst the export of butter now exceeds 100,000 tons annually. Much of this progress has been made during very recent years. Five years ago butter production totalled 130,000 tons, and exports 48,000 tons annually. Thus in five years the export of butter has more than doubled.

The encouragement of dairying has been an active part of the policy of Australian governments for many years, and the expansion of the industry during the present century has involved a large expenditure of loan money. Well over £200,000,000 is invested in the industry, and the welfare of dairying is therefore important, not only to the dairy farmers themselves, but also to Australia, which depends upon the industry for the production of a considerable percentage of its wealth. The industry has experienced extremes of prices since the war. In 1920, for example, the price of butter was at times as high as 2s. 6d. per lb., but in the next year it had dropped- to ls. 6d. per lb., and it remained at about that level for seven or eight years. The effect of the high prices had been to stimulate land values, and the fall in prices brought embarrassment to very many dairyfarmers throughout Australia. The position then was such as to impress upon the industry the necessity for organization of marketing. The objectives aimed at were the improvement of quality, the assurance of continuity of supply, and the reduction of Costs of marketing. With these objects in view, the BrucePage Government brought into being the Dairy Produce Export Control Act in 1924. Under that act, the present Dairy Produce Control Board was established, and it has functioned continuously since that time. The board has done much to advance the interests of the dairying industry, and has effected substantial economies in marketing costs. It has given continuous attention to the improvement of marketing technique, both in Australia and in the United Kingdom, which has always been the principal market for Australian dairy products.

Prior to the establishment of the Control Board, the Australian Dairy Council was established, and associated with it were State Advisory Dairy Boards. Unlike the Control Board, the Australian Dairy Council has no statutory authority, but advises the Commonwealth and State governments on problems connected with the production and manufacture of butter and cheese, and, in addition, encourges production, through its State boards, by giving attention to such matters as pasture improvement, and investigation, of disease. The funds of both the Control Board and the Australian Dairy Council are derived from export levies on butter and cheese imposed by the Commonwealth as an inspection fee. Since the Dairy Produce Export Control Act has been in operation, representations have been made to the Government from time to time by the producing interests that the board should include direct representatives of the producers. At the same time privately-owned butter and cheese factories pointed out that, as their factories were not controlled by boards of directors, they were excluded from the right of exercising a vote ii» connexion with the election of any members to the board. Furthermore* during the past year or two there has been a widespread feeling amongst dairyfarmers that the industry is overorganized. In addition to the organizations to which I have- already referred, there is at present in each State a Dairy Products Board established under State legislation; a Dairy Produce Advisory Committee specially set up to advise the Government on export problems; a. private company known as the Commonwealth Dairy Produce Equalization Committee Limited; and various State and local producers' organizations.

It appears that, amongst the activities of all these bodies, there is no specific concentration on the improvement of the quality of our dairy produce; yet this is of paramount importance. The fixation of a high internal price, the narrowmargins between choicest and lower grades, and the equalization of returns, may result in a decline of quality unless: positive steps are taken to prevent it by effecting an improvement. This. Government has for some time believed, that the ability which is availablein the industry could be concentrated, on current problems in a more efficient and economical manner. The State Dairy Products Boards function under Statelegislation, whilst the Equalization Committee is a special body formed for a. specific purpose, which is not a direct concern of the Government. It was considered by the Government, however, that it might be possible to combine the otherorganizations into a national body, whose functions would relate to production and marketing. Such a body, it was thought, could act as the one authority to which, all matters affecting the industry could: be referred by the Government, and be in a position to keep under constantexamination the domestic marketing: system, as well as to determine contentious issues in relation to marketing; and distribution in the United KingdomWith these objects in view, a conference of representatives of various sections of the industry, including producers' organizations, was convened, and it was held, in Sydney on the 13th April last. That, conference recommended that the Control

Board should be reconstitutedby placing three producers' representatives on the board, and eliminating the representative of f.o.b. sellers. The board's recommendations were referred to the Australian Agricultural Council for consideration at its meeting held at the end of May. The Agricultural Council recommended that the Control Board should be re-constituted by a reduction of the number of factory representatives, the elimination of the representative of the f.o.b. sellers, and the addition of six producers' representatives. The Agricultural Council also expressed the view that, with the inclusion of producers' representatives on the Control Board, the need for the Australian Dairy Council no longer existed, and it recommended that that body should be disbanded, and that the export levies be consolidated into one. The Agricultural Council also recommended that, out of the funds derived by the export levies, an annual sum should be allocated for research and investigation into pastures, diseases of dairy cattle, and the quality of butter. The funds thus set aside would be expended in the directions recommended by the Council for Scientific and Industrial Research and the State departments of agriculture.

The Control Board, as constituted by the original Dairy Produce Export Control Act, consisted of thirteen members, as follows: -

One representative of the Commonwealth Government appointed by the Governor-General.

One representative of f.o.b. sellers appointed by the GovernorGeneral.

Nine representatives elected by the boards of directors of cooperative butter and cheese factories, - two each for the States of New South Wales, Victoria and Queensland, and one each for the States of South Australia, Western Australia and Tasmania.

Two representatives elected by the boards of directors of proprietary butter and cheese factories throughout the Commonwealth.

The proposed alteration of the constitution of the board has been the subject of considerable discussion since the Agricultural Council meeting was held. As a result of further consultation between the members of the Agricultural Council, it has been decided that the wishes of the industry may be met by adding four producers' representatives to the existing board, such representatives to be elected by the producers themselves. This decision is due to the desire of the Commonwealth Government, acting with the approval of the State governments, to reconcile the divergent views expressed by different sections of the industry. The Government is convinced of the wisdom of producer representation and a considerable measure of producer control. It also recognizes the difficulties of ensuring equitable representation amongst the States because of the different stages of development of the industry in the various States, and the preponderance of production in the eastern States. New South Wales, Victoria and Queensland are responsible for 90 per cent, of Australia's total production. If representation were determined on a production basis, South Australia, Western Australia and Tasmania would have very meagre representation. The representatives will be as follows : - Commonwealth, 1 ; New South Wales, Victoria and Queensland, 12 (70 per cent.); South Australia, Western Australia, and Tasmania, 4 (23 per cent.).

It is proposed to afford an additional assurance of reasonable producer control by providing in the regulations that, in the election of representatives of cooperative factories, the factory directorates shall nominate the candidates, and the suppliers of milk and cream to the co-operative factories in the States concerned shall exercise the franchise. Thus, thirteen of the seventeen members of the board will be elected by the producers. It is felt that this procedure will have the general support of this Parliament.

With regard to the proposal to consolidate the various export levies, action will be taken to repeal the regulation under which export levies are now being collected by the Government for use by the Australian Dairy Council. That body will thus no longer function as it has done in the past. The Australian Dairy Produce Board will carry out the advisory functions formerly performed by the

Australian Dairy Council. The State governments may, of course, if they so desire, retain the State advisory dairy boards which have, in the past, operated in association with the Dairy Council.

In commending the bill to the Senate, I may point out that the Australian dairying industry is, at present, faced with real and serious problems, and the responsibility rests upon the Commonwealth Government, and the new Australian Dairy Produce Board, to work strenuously for the improvement of external marketing conditions and the establishment of a reputation for high quality dairy produce. The bill represents a very definite step towards ensuring the continued improvement of the quality of dairy products. Much of the butter exported from Australia is of the highest quality. Admittedly there is still room for improvement. The reconstituted board may confidently be expected to concentrate its attention on this important problem. It is believed that the re-organization of the industry on the lines proposed in the bill will be of material benefit, not only to the dairy-farmer but also to Australia as a whole.

I have detailed information explaining the various clauses which, if required, I shall supply in committee.

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