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Monday, 11 November 1991
Page: 2828


Senator ARCHER (4.31 p.m.) —I move:

  That the Senate take note of the document.

In doing so, I would like to take the opportunity to comment on the dairy industry and the Industry Commission report, particularly at a time when so much is being said about international competitiveness, streamlining, cost cutting and so on. I would like to say a few words to the credit of the dairy industry at this time because it has had 20 most traumatic years and in that time it has delivered so much—probably more than any other primary industry in Australia.

  For instance, in 1971 there were 43,293 farms and by 1990 this had fallen to 14,728—a drop of two-thirds. In 1971, there were 2,833,000 cows which by 1990 had reduced to 1,631,000 cows—a drop of about half. In 1971, the average production per cow was 2,609 litres, which by 1990 had increased by virtually 50 per cent to 3,804 litres. This was done through good management, good breeding and good feeding, and that is all to do with the excellence of the industry.

  Along with New Zealand, Australia is one of the two outstanding economically successful dairying countries in the world. The cost of production was cited as one of the indicators, and Australia and New Zealand produce milk at about 10c or 11c per litre. In the United States and the EC it is about 33c to 35c per litre and in Japan it is 60c per litre. In other words, the cost of production in the EC and the United States is almost three times the cost in Australia, and in Japan the cost is about five or six times the cost in Australia.

  At present, the Australian dairying industry operates under a very satisfactory scheme of management. It ensures the future of a very sound business; it operates in very diverse parts of Australia in every State; it is a high employer of labour; it works on an improving export situation; it is the highest value-adding primary industry in Australia; it provides very low priced products to Australian consumers, and every drop of Australian produced milk is processed in Australia. With the value-adding I mentioned, the value of the milk as produced is $1.7 billion. To that is added approximately $3 billion in value-adding to make a total of $4.7 billion. The export quota of that amounts to some $700m per year. That is a very good industry to have and we should make more of it.

  I have not yet studied thoroughly the Industry Commission report due to a lack of time, but I find some of the figures very hard to reconcile. I will need to do some more work before I can agree with all of the figures I have inspected so far. I am surprised that there is no mention in anything that I have seen of the economic or sociological aspects of what Australia's general position would be if the recommendations were accepted. The comments seem to assume that the cost of milk or manufactured products is high or internationally uncompetitive, when clearly it is not so. The cost of dairy products to Australians—whether it is milk or products in a manufactured form—is amongst the lowest in the world. The dairy industry still has real growth potential; we can still earn export dollars and head off a lot of imports. The major importance of the industry in fringe rural areas needs to be taken into account and, most of all, Australia's productivity needs to be maintained.