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Wednesday, 20 March 1957

Mr McMAHON (Lowe) (Minister for Primary Industry) . - I move -

That the bill be now read a second time.

The purpose of this bill is merely to clear up some doubts that have arisen in the administration of the cotton bounty, and to permit of the interim payment of bounty after the delivery of the seed cotton to the processor, and pending the final ascertainment of the price that can be paid.

Under the present act assistance is afforded to the Australian cotton-growing industry by means of bounty up to the 1958 harvest. The bounty is payable to the grower through the processor of the raw cotton, and is designed to enable the growers of seed cotton to be paid an average guaranteed price of 14d. per lb. for their product. The Cotton Marketing Board in Queensland is the only applicant for this bounty.

I should like to explain briefly that the processor receives deliveries of seed cotton from growers, gins it, and sells the resultant raw cotton to spinners. The processor then pays the sale proceeds less the cost of ginning and administration to growers, and this, together with the bounty, if any, gives an average price for the seed cotton of at least 14d. per lb.

Bounty was paid on the 1953 harvest amounting to £17,651. Payments rose to £25,243 on the 1954 harvest and then to £67,284 on the 1955 harvest. The expected payment on the harvest just completed is in the vicinity of £120,000. The present Cotton Bounty Act presupposes that all processing of the raw cotton and the accounting thereof will have been completed before payment of bounty. This means that there is a considerable time lapse between the delivery of the seed cotton and the final payment of the purchase price. The decline in raw cotton prices early in 1956 seriously reduced the price the board could pay the growers for the seed cotton. In order to assist the industry in the difficult situation the Government made available in January last, as an interim payment, £48,950 - which is approximately 40 per cent, of the anticipated bounty.

The need for the interim payment is expected to recur in respect of the 1957 harvest and, possibly, also of the following year's harvest. Amendments to the act, as proposed in the bill, will enable the Government to make the desired assistance available to the industry at the appropriate time. Naturally, every care will be taken to ensure that the interim payments never exceed the bounty entitlement. Provision is, however, made for the recovery of any excess and, in addition, an undertaking will be required from the Cotton Marketing Board that instalments of the purchase price to growers will be kept within the guaranteed 14d. whilst an interim payment of bounty remains operative.

The bill also amends the principal act in two other directions. In the first place, it brings into the bounty calculations unsold stocks of raw cotton on hand at the close of each bounty year. Secondly, the Cotton Marketing Board derives income from rents and, in some years, from the extraction of oil from peanuts. This income is considered extraneous to the cotton processing operations and, to the extent that such income is distributed to cotton-growers, this amending bill will enable the price paid on the deliveries of seed cotton to rise slightly above the guaranteed figure of 14d.

In order to achieve the object of the act it has been necessary over recent years to take into account stocks of raw cotton on hand at the end of the year, and to exclude the extraneous receipts from the bounty calculations. I have considered it advisable to introduce an amending bill to remove any doubts that may exist concerning these features and to give legal effect to departmental decisions. I commend the bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

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