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Monday, 1 December 2003
Page: 23381

Ms LEY (7:49 PM) —The Agriculture, Fisheries and Forestry Legislation Amendment Bill (No. 1) 2002 enables largely technical amendments to four pieces of agriculture, fisheries and forestry legislation. It extends the Quarantine Act to include Christmas Island and amends that act to change the arrangements for the payment of fees; it amends the Imported Food Control Act to provide legislative support for compliance agreements between food importers and AQIS; and it amends the Pig Industry Act 2001 and the Wool Services Privatisation Act 2000 to enable the R&D bodies—Australian Pork Ltd and Australian Wool Innovation Ltd—to carry forward claims for R&D expenditure that are eligible for matching Commonwealth contributions from one financial year to the next.

I would like to take this opportunity to address some of the issues facing the wool and pig industries in Australia and to comment on their importance to my electorate of Farrer. Rural R&D bodies are financed partly by industry and partly by the taxpayer. Generally, the Commonwealth provides payments to these bodies that match the amount they raise in levies. This legislation allows claims for matching government expenditure to be rolled over from one financial year to the next so that all possible corresponding government funds can be accessed.

Australia's pork industry has undergone massive changes in the past decade. A globalised model of production has seen a reduction in the number of growers, from more than 10,000 to fewer than 2,500. Many of these farmers do contract growing for other farmers, thus minimising the riskiness of their business and ensuring a more certain cash flow. One of the main factors impacting on profitability in the industry is the price of grain. In an intensive industry such as the pork industry, high levels of grain are an essential, relentless and very large input.

During the drought, feed prices soared. Over 12 months, grain feed prices rose by more than 70 per cent. I think it is fair to say that the current system for providing exceptional circumstances relief has tended to favour broadacre farmers at the expense of more intensive industries, such as the pig meat industry. I am confident that Minister Truss's drought review task force will examine this issue and address it for the future. Certainly, producers of pork are just as severely affected by drought as are producers of milk, wool or beef, so I do encourage the pork industry to make a comprehensive submission to the drought review task force.

The story of Australian pork is a story of many successes. Since we have been forced to compete globally, Australia has become the biggest supplier of fresh pork to Singapore—roughly 30,000 tonnes a year. We also supply the Japanese market, which is the world's largest, with 800,000 tonnes—one per cent of its market only, however—each year. However, Australia does import 45,000 tonnes of pig meat a year and many of these cuts are up to $2 a kilogram cheaper than the Australian product. Clearly, other countries—certainly the US, in the context of any negotiated free trade agreement—would like to get access to our domestic pork market. I am sure the pork industry and rural members in this place will be giving the message that we must be extremely careful not to trade away that access.

I know that producers here feel somewhat exposed when they compare their situation with farms in Europe. Denmark is able to export without barriers or tariffs, whereas if we want to export to Europe we immediately have barriers in place. But I do not believe the answer is for us to erect barriers. Clearly, it is not, and there are many well-documented reasons for this. The necessary approach is the one we are taking through the World Trade Organisation. But it is important for us to realise our competitive advantage: our disease-free status and our quarantine barriers. These make us a low-risk supplier to the rest of the world and really give us something that no other country has. I know that the rest of the world will try very hard to unravel and discredit our quarantine restrictions. I would like to think that they are non negotiable because our status as a country free of exotic disease is precious and must be maintained.

Our pork producers currently pay a slaughter levy of about $2.40 on every pig they sell, which funds Australian Pork Ltd's marketing and promotion and funds television advertising campaigns with which many of us are familiar. Of course, this in turn lifts the consumer's general level of awareness about pork, which may benefit importers, not just domestic producers selling on the domestic market. Producers therefore believe that there should be an equivalent levy on product coming into this country. I understand that this has been suggested to importers and processors of imported meats and that they are willing to come on board with a voluntary levy. The government have let it be known that we are concerned about free riders in this area and that we are prepared to back this concern with the necessary government regulation.

There is definitely a way to go in increasing sales of fresh pork. Domestic consumption is eight kilos per person, compared with 37 kilos for beef. However, I congratulate Australian Pork Ltd on a consumer campaign that for the June 2003 quarter saw pork become the fastest growing share of meat on Australian plates, with sales 13.3 per cent higher than for the previous year. This is an important trend because pork consumption had not changed much in the previous 10 years. People tended to see it as old fashioned and difficult to cook.

I would like to see supermarkets improve their labelling and identification of imported pork products so that consumers can make informed choices about what they buy. Woolworths and Coles sell a great quantity of smallgoods and these would contain imported pork in varying degrees. However, they are not obliged to identify how much Canadian or Danish meat is in the smallgoods, they sell. I am not suggesting that we would categorise imported product as inferior or try to tarnish its image in any way, but consumers should have a choice. If I want to support my local pork industry, I should be able to find out if the ham or bacon I am buying is Australian or not. It is a question of the consumer being able to make up their own mind. I urge the major supermarket chains to make the changes necessary to label smallgoods accordingly. I remember a dispute arising over imported oranges from California and then seeing them clearly labelled in the fruit and vegetable section of my supermarket as imported navels. Shoppers were therefore able to make an informed choice about which oranges they bought.

Getting back to pork, bacon is a good example. If it is purchased prewrapped in the cold section of the supermarket, we can read the label and find out where it comes from. But, if we purchase it at the deli section unwrapped, we have no idea. In fact, I often ask the attendant at the deli counter what is the country of origin of the bacon they are selling, only to be confronted by a blank look; it might be all Australian, it might be partly Australian or it might be all imported. The rising exchange rate is certainly tough on all of our commodity producers, and pork would be no exception. Producers receive between about $2 and $2.60 per kilo of pork sold. Supermarkets sell it—on my last observation—for between $8 and $18 a kilo. It remains a mystery to me in this case—as in other instances where our supermarkets are selling fresh produce—how that level of value adding takes place: the producer gets between $2 and $2.60 and it costs an average of $10 to $14 on the supermarket shelves.

I commend the industry for its determination and resolve in the face of these difficulties, particularly after the drought. I know Australian Pork Ltd is having its annual general meeting in Canberra tomorrow and the next day, and I wish all the delegates well as they work on behalf of the entire pork industry—an important, worthwhile and highly regarded industry for Australia. It is well represented in my electorate of Farrer by QAF, Australia's leading producer and exporter of quality pork, having 20 per cent of the nation's sales. QAF have eight farming sites, producing nearly one million pigs per year, with the Corowa site, in the Farrer electorate, producing almost half of the market pigs. Total sales revenue for 2002 amounted to a quarter of a million dollars. Forty per cent of production is sold as fresh pork into the retail sector, 30 per cent goes to manufacturers for further processing and 30 per cent is exported. QAF account for 30 per cent of all pork exports from Australia and are a prominent member of the Confederation of Australian Pork Exporters. Ten per cent of their sales goes directly to supermarkets. I visited one of their sites. They have a commendable environmental management plan, which they revise annually. This plan details their current environmental practices, defines the potential risks and outlines methods of assessing and improving long-term environmental sustainability.

This brings me to Australian Wool Innovation, the rural R&D body for the wool industry. I mentioned the hard time that the rising dollar is giving the pork industry. It is no less the case for the wool industry, and the price of wool has dropped by almost a third over the last six months. The stores are chock-a-block as sale prices are not reaching the reserve and people are choosing to hang onto their clip or part of their clip. But there is much news in innovation in the wool industry. For example, a non-woven wool product is soon to be released commercially, which will help thousands of people protect their homes from bushfires. In my electorate, Macquarie Textiles has teamed up with AWI in a venture to produce a non-woven wool fabric that is used in high-fashion garments.

With low returns for wool and with the western part of New South Wales slipping back into drought, I really feel for the farmers of the western division that I represent. I have spoken many times in this place about their courage and commitment to the land and the life they love. That is why I was so angry with the recent contamination of the shipload of live sheep due to be exported from Portland. The point needs to be made that, without a live sheep industry, we deal a real kick in the guts to the wool industry in Australia. That point may not be readily appreciated. Wool producers get their returns from wool sales and also from sales of older sheep. Boat wethers may make as much as $40 to $60 a head and give the farmer the opportunity to restock with younger sheep, thus keeping the enterprise going. Where there is no live sheep industry, farmers are forced to sell to domestic processors for much less than this—maybe $10 a head, maybe only $5 a head.

Imagine the effect this has on the bottom line. Imagine the hardship in today's environment: recovering—or not recovering—from a drought, wool prices depressed and no genuine market for older sheep. The actions of these animal liberationists on the wharf at Portland were an absolute disgrace. I wonder how sections of the community have become so disconnected from the land that sustains us all and the primary production industries, such as the wool industry, that mean so much to this country's past, present and future that they could carry out such a monstrous act.

I would like to end on a positive note and mention some more innovations in the wool industry of interest to people in this place. I am sure machine washable suits would fit into that category. For just three months there has been a premium quality machine washable suit on the market. That will save on everybody's dry cleaning bills. I mentioned the important partnership taking place between AWI and Macquarie Textiles, which has realised the development of Australia's only commercial non-woven wool plant in Albury. It has provoked widespread interest from companies wanting to test the new fabric for a variety of uses, ranging from surf wear to protective clothing. A Drizabone vest using non-woven wool has sold so well that a second run of the product has now been ordered.

AWI recently opened an office in Beijing, which will build further presence in a market which is very important to Australia, because China takes 40 per cent of our wool exports and they are worth $1.3 billion. Current research activities involving the Chinese wool textile industry will be strengthened and expanded, with AWI creating new relationships and building on existing ones with the Chinese government and industry representatives. I commend this bill to the House, and I look forward to good times ahead for our wool and pork producers.

The DEPUTY SPEAKER (Mr Lindsay)—The debate is adjourned and the resumption of the debate will be made an order of the day for a later hour.