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Tuesday, 10 September 1996
Page: 3920

(Question No. 483)

Mr Price asked the Minister for Primary Industries and Energy, upon notice, on 26 June 1996:

(1) How many chicken growers are there in Australia.

(2) How many persons are employed in the chicken meat industry.

(3) Is he able to say how many persons are dependent for their employment upon the employment of the persons referred to in part (2).

(4) To what extent are lower consumer prices the benefit of competition in the chicken meat industry.

(5) What was the retail price for chicken meat in (a) 1991, (b) 1992, (c) 1993, (d) 1994 and (e) 1995.

(6) Has his Department estimated the potential losses in (a) employment and (b) market share to the domestic industry if the importation of cooked chicken meat were allowed; if so, what are the estimates.

Mr Anderson —The answer to the honourable member's question is as follows:

(1) According to the Australian Bureau of Statistics (ABS) publication `Characteristics of Australian Farms 1993-94' which contains the most independent statistics on chicken growers, there were 732 poultry meat farms in Australia. A State by State breakdown of these numbers is as follows: NSW, 329; QLD, 102; VIC, 151; SA, 72; WA, 65; and TAS, 13.

(2) Estimates of the number of persons employed in the Australian poultry industry are not currently available. However, a report undertaken in 1991 by JT Larkin & Associates entitled `The Australian poultry industry: Economic Structure and the Impact of World Poultry Trade Developments' estimated the number of people directly employed in 1988/89 was 16,000. Of these, it was estimated that 11,000 people were on-farm and 5,000 people were employed in the processing sector. A further 29,000 people were estimated to be indirectly employed in the industry.

(3) Due to the unavailability of statistics, I am not able to provide an estimate of the numbers of persons dependent for their employment upon the employment of the persons referred to in part (2).

(4) The degree to which cost savings in the production and processing of chicken meat are passed on to consumers in the form of lower prices is dependent upon the level of competition in the industry. Although the structure of the Australian poultry meat industry is highly concentrated, with two large companies supplying around 80 per cent of the domestic market, it is likely (for reasons listed below) that the industry can be characterised as being closer to perfect competition than to a monopoly.

The Australian Bureau of Agricultural and Resource Economics (ABARE) advises that the chicken meat industry is assumed to be characterised by a high degree of contestability because:

(i) chicken meat is marketed through highly competitive supermarkets, fast food chains and the food service sector;

(ii) there are few barriers to entry, and, in addition to the two large suppliers, there are two medium sized hatcheries which supply chicks; and

(iii) current State regulations (setting minimum contract prices to broiler growers) and trade practices legislation restrict predatory pricing.

(5) According to ABS data, the retail price for chicken meat in:

(a) 1991, was $3.09 per kilo;

(b) 1992, was $2.94 per kilo;

(c) 1993, was $2.89 per kilo;

(d) 1994, was $2.72 per kilo;

(e) 1995, was $2.92 per kilo.

(6) (a) & (b) An assessment of the impact on employment and market share if cooked chicken meat imports were allowed is very difficult as, due to quarantine restrictions, there is no historical data on which to base such assessments. Therefore, it is uncertain precisely what the effects might be, though cooked chicken meat imports are anticipated to comprise some 2-5% of domestic chicken meat consumption. To try and resolve this and to ensure that industry has an input into assessing the impact of cooked chicken meat imports, I have set up a Working Group, comprised of representatives from the industry and the Department of Primary Industries and Energy, which will be reporting to me shortly.