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Wednesday, 17 April 1985
Page: 1126

Senator WATSON(12.01) —The Commonwealth's involvement with rural research is really through two avenues-the Commonwealth Scientific and Industrial Research Organisation and the rural industry research funds. Over the years a number of reports have questioned the Organisation and the funding of rural research schemes in terms of accountability and the relevance of research which they fund regarding the technical, social and economic needs of particular industries. There were some problems with the Australian Meat Research Committee. It was unable to enter into contracts or manage its own funds. There were problems with the initiation or modification of projects which required ministerial authorisation. The incorporation will enable the Australian Meat and Live-stock Research and Development Corporation to be more flexible. It will enable creative responses to future opportunities. The Corporation will be responsible for its own assessment of the industry. I think that is important.

The other feature that I endorse is that the members of the Corporation will be chosen on the basis of their professional qualifications and experience. They need also to have a close involvement with the industry. I think that is very important. We have to acknowledge that despite Australia's considerable competence in producing beef, particularly grass fed beef, external practices have often been very damaging to our exports. Time and again I have used the example of the common agricultural policy of the European Economic Community. Through its various subsidies to farmers it has encouraged the vast overproduction of not only beef but a wide range of agricultural goods. This surplus has been dumped on world markets at artificially reduced prices, and undercutting such countries as Australia, thereby weakening our position in our traditional markets. This has been most unfortunate. The other aspect that I think requires attention is that 80 per cent of the entire CAP budget goes to 20 per cent of the farmers in Europe. These sorts of practices have a tremendously damaging impact on our export industries, no matter how efficient we are, no matter how we refine our own operations and increase our productivity. If these international practices are allowed to persist we have major problems. We have to acknowledge the very dramatic fall in beef exports in the previous year.

I therefore come to the conclusion that our meat and livestock industry, like so many of our primary and secondary industries, is under threat on two fronts. The first, which I have mentioned, is the dumping of subsidised beef and sheep meat products by the EEC. As a result, 80 per cent of our overseas trade is now concentrated in the very competitive, very low wage cost areas of the Pacific basin. Even these markets, as I have mentioned, are under threat because of dumping by the EEC-and also, I have to acknowledge, better marketing strategies by some of our competitors. Secondly, we have to acknowledge that the consumption of red meat in Australia has fallen. This is due chiefly to a well orchestrated education program by different organisations, ranging from the National Heart Foundation to Weight Watchers International, whose aims include the reduction of the consumption of cholesterol and animal fats. In fact, domestic consumption of red meat fell by 6 per cent in 1983-84. Total red meat production fell by almost two million tonnes carcass weight in the last financial year. This meant a drop of 14 per cent, with beef and mutton production showing substantial losses.

We know that there are problems with markets and with falling consumption. The Corporation and the meat and livestock industry have tried to come to terms with some of these problems, but in many respects they have failed, because the product is no longer acceptable to such a wide range of consumers as in the past. Therefore, we have to acknowledge that demands by the consumer have changed. We have to acknowledge that fat as such is out; more meat on the bone is in. New Zealand woke up to this change in consumer demand years ago and instituted profitable research to develop a product that would meet these needs, especially in the important Japanese market. Although we have been initiating and supporting research projects for years we have not always transferred that research into improved products, particularly in the eyes of the consumers, improved customer demand or improved access to the Asian market, particularly Japan. We are now waking up to move into these essential areas. In essence, the meat and livestock industry must improve both the effectiveness and efficiency of meat and livestock research and development or it will continue to go down the drain like, for example, the dairy industry. It has been shown that research funds have not always been used in the best interests of the industry. There must be more co-operation and liaison between all bodies involved in the industry.

The act of replacing the Australian Meat Research Committee with an incorporated body to be called the Australian Meat and Live-stock Research and Development Corporation will be completely meaningless if the new Corporation does not address these problems in a meaningful way that will benefit the industry in the future. Thus our side endorses the establishment of the Corporation and commends the Government for raising the maximum level of its matching contribution for rural research over the next five years. With industry co-operation our meat products could become much more competitive in the future. However, there is still some concern over the accountability of the new Corporation by both the producers and the exporters, from whom it will receive financial support, mainly by way of levies. At this stage I acknowledge the importance of Tasmania in this industry. Tasmania has a number of producers of grass fed cattle who produce as many animals as producers in any other State in Australia. I refer with a great deal of pleasure to the pioneering work done by Mr Bert Farquhar and his skill and expertise in engineering, particularly in the use of irrigation. This shows that sometimes large producers come from a small State. In addition to the Bert Farquhars of Tasmania, there are many other efficient meat producers in Tasmania who need the support of the community and of governments if they are to survive in an increasingly competitive world.

In conclusion, if the new Corporation can be more accountable and more efficient, if it can raise productivity and reduce charges, it will be a worthwhile organisation. Against that background we have to acknowledge what is happening in the farming community. If farm costs and charges are allowed to escalate as they have in the immediate past there will be a long term problem for this industry. Ultimately, every cost, be it a labour cost or an imported cost, is caught up at the farm gate. Therefore, it is not surprising that the National Farmers Federation has placed cost containment as a major feature of its public relations campaign. There is initial short term benefit to these industries from the devaluation of the Australian dollar, but if the Government does not acknowledge those benefits as short term and take other appropriate action to maintain other costs within the economy these benefits will be short lived and to the long term detriment of our rural industry.