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Wednesday, 3 June 1970

Mr DUTHIE (Wilmot) (2:32 AM) - We are now making rapid progress in our consideration of this Bill. I strongly support the remarks of the honourable member for Dawson (Dr Patterson) who led for the Opposition and most of the remarks of other members who have dairy farms in their electorate and who are concerned not only about the future of those farms but of the industry as a whole, of which those farms are a vital part, lt is not necessary to traverse all the facets of this legislation that have been mentioned by other speakers. The Minister for Primary Industry (Mr Anthony) gave a detailed speech in introducing the legislation and it was of great interest to those of us who have watched the progress of this scheme since it was first mooted back in 1 966. The least we can say about the Minister is that he has shown great persistency.

On 1st April 1969 he made a statement in which he replied to the Premier of New South Wales who, along with other State Premiers, suggested that the Commonwealth should make money available to the States as a grant and not as a half grant and a half interest bearing loan as the Commonwealth has insisted and which the Stales involved have now agreed upon. The Minister, forthright as he often is, said that the suggestion was over the odds. He said that the $ 12.5m loan to the States would bear interest at long term bond rates and would be repayable over 25 years. Then he said;

If I cannot get a collective decision from the Stales then I will negotiate with individual States.

That was the first revolutionary statement he made during the 3 years of long, drawn out negotiations that he had with the Slates. We can sympathise with him in battling against the several States concerned with marginal dairy farms. We imagined from the beginning that this would be a collective scheme and that unless all States came into it it would not operate. When the Minister made that statement just over 12 months ago he indicated that the scheme was not going to be a collective scheme only; it would be a scheme dealing with each State annually as it came into the scheme. Western Australia is the initial State in the scheme. I agree that the Minister had to take this firm attitude. In our federal system it is difficult to get the States to agree on anything except that they should get more money from the Commonwealth. Since that time Tasmania, after a long period of indemon by both the Labor Government and the present Liberal Government, has decided at last to come into the scheme.

On 26th May, Mr Beattie, the Minister for Agriculture in Tasmania, said that Tasmania would negotiate with the Federal Government for a scheme similar to that agreed to by Western Australia. He said that Tasmania would have preferred to act as the agent of the Commonwealth in such a scheme, but this has not been agreed upon. He mentioned 3 aspects of the scheme which concerned the States: First was the possibility that participation might involve the States in financial loss. This suggestion has now been answered by the Minister for Primary Industry who has said that in all reasonable cases the Commonwealth would stand any losses suffered by the States. The second aspect was the requirement that property be given to applicants for land who were prepared to undertake diversification. The third aspect was to restrict the participation in the scheme to dairy farmers who derived more than half their income from milk or cream used in manufacture. Then he went on to say that the Commonwealth has now agreed to amend the proposal to cover losses and diversification. So the objections of the Tasmanian Liberal Government seem largely to have been overcome.

Low income producers within the fluid milk section of the industry will be eligible to participate in the scheme and will be subject to exactly the same test of eligibility as farmers in the manufacturing sector. This was the final decision which helped to bring Tasmania into the scheme. There is no discrimination between the low income earner in the fluid milk sector and the low income earner in the manufacturing sector. 1 do not expect that there will be very many small fluid milk producers who will find themselves in need of assistance or wanting to leave the industry as at present they are in a very strong position throughout Australia.

The Minister for Primary Industry pointed out in his second reading speech that the Bureau of Agricultural Economics survey showed that the average Australian net income in the manufacturing sector was $2,001 and that in the whole milk sector it was just on $3,000. So the economic strength of the whole milk sector is far and above that of the boys who are battling along in the manufacturing sector selling butterfat for cheese and the like. I should like to refer also to one or two other points in the scheme. Any scheme which greatly increased production would at this stage cause more harm to the industry in the long term than the financial disability of a minimal number of dairymen. This is my main worry about the scheme. It could bring about increased production for the simple reason that when a small farmer who is not producing the required amount of butterfat wants to leave the industry voluntarily and submits his case to the State authority the farm is bought by the authority and sold to a neighbouring dairy farmer. There is nothing to stop the neighbour increasing production on the farm he has bought. He could continue to produce milk on the property and increase the cow population on that farm. The economic and efficient farmer could increase production on the farm which formerly belonged to the uneconomic farmer.

It is stipulated, of course, that if a beef farmer or a sheep farmer buys one of these marginal dairy farms he must go on producing beef and sheep on it; he cannot turn it into a dairy farm. This is a good provision and in this sense production would not be increased overall with that restriction. On the other hand, a dairy farmer buying a dairy farm alongside his could increase the overall production of butter which at the present time is so overproduced in the world that we have 350,000 tons of it in store in the European Economic Community countries. It is ironical and disastrous that the EEC countries are at the moment disposing of large quantities of this surplus butter to our new Asian markets, some of them built up through hard work by Australia. They are selling butter to these new Asian markets at 18c per lb; dumping it in effect. They are carrying it all the way from Europe and dumping it. lt is our butter probably that was sent to Europe and now they are bringing it back to Asia and selling it for the ridiculous figure of 18c per lb.

Another point about the 34c per lb guaranteed by the Australian Government is that this is a minimum price and is guaranteed for 215.000 tons a year of which Tasmania's share is 14,500 tons. The quota system has been suggested and approved by several dairy organisations already, including one or two in Tasmania. A recent suggestion has been made to try to limit production or control production within this overproduced industry. There are a few other things which have to be done before this industry can be kept at a stable production level. I feel that registration of dairy farmers should become a policy of State governments, because they control it within the States, so that all farms producing milk for butter and cheese are registered as such. Nobody other than those who are registered as dairymen would be allowed to enter the industry. We. register everything else. Every other producer and every other person in the country is registered within his field of operations. But farmers are not and anybody can come in at any time and suddenly decide to grow wheat or barley or any other of the cereal crops. He may even become a dairyman. There is nothing in the world to stop him. The position in the banana industry and the hop industry is much the same.

There are quite a lot of problems in the dairy industry but this is not the time or place to discuss them because this is essentially a scheme to bring some sort of stability into the unstable section of the dairy industry. There is a final point that I want to make. A lot of responsibility is thrown on the States in this scheme and I feel-

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