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Thursday, 15 March 1973
Page: 623


Mr KERIN (Macarthur) - I wish to raise a grievance held by many people in my electorate. Firstly, however, I should like to comment that we are all getting a little sick and tired of this 'did, did not' childish sort of debate that goes on in this House in regard to who is abusing the forms of the House and who is not. The figures reveal that, during the last Parliament, the gag was applied 223 times. I think we all realise both in government and in Opposition that time is one of the most important resources in politics and until all parties work out in committees how the House is to be run, this sort of debate is just time wasting.

I wish to raise a matter of yet another rural industry that was long neglected by the previous Government. I refer to the broiler chicken growing industry which is very strongly represented in my electorate. In many ways, the broiler growing industry is a bit of a Cinderella industry but I think it is one that is starting to grow up and it is now looking to governments for a little more protection, sympathy and understanding. The sort of problems that broiler growers face and have faced for a long time are nearly identical to the problems faced by people such as service station lessees and licensed owner truck drivers. In different ways groups of people in these industries now are more often seeking government action to give them some sort of backing.

Most people in the broiler growing industry, including the processors, do not desire heavyhanded government legislation, but they certainly want some government understanding of their position. There is a wide range of measures that the national Government has in mind, such as in the fields of restrictive trade practices, monopolies and uniform company law, that may eventually enable broiler growers to better their lot. Growers in all States have been pressing for legislation to protect their position but so far the reaction of individual State Ministers for Agriculture has been to point out the difficulties of making legislation work, given section 92 of the Constitution. The Victorian Farmers' Union's broiler and turkey section has been fighting for 5 years to have enacted a Bill which was introduced in 1968, subsequently redrafted but taken no further. The New South Wales Broiler Growers Association has been fighting for legislation and constantly negotiating with processors for at least 8 years.

Broiler growing is an integrated primary industry. It commenced in this way and has grown in that form. The grower provides shedding, labour and management. His only security in his enterprise is a so-called contract which is constantly renegotiated on either a general basis, with all growers supplying one processor, or a specific basis. The contract as such is little more than a gentlemen's agreement. Such agreements are fine while ever one is agreeing with gentlemen - and there are some men in the industry who are gentlemen. The system of integration applying to the broiler industry was perfected in the depressed areas of northern Alabama and Georgia in the United States. Although most growers enter the industry with the idea that they are to some extent their own master they soon realise that they are in exactly the same position as trade unionists, inasmuch as all they can do is bargain with those from whom their money comes.

Many of the integrators who run the industry, in conjunction with the growers, in the way that the integrated system works, always try to act with the growers' interests at heart. However, the industry has now grown to the stage where there is an element of competition between the integrators. Professional management has been introduced and growers find themselves in a situation where, they are in a constant bargaining and negotiating position. It is the integration system of primary production that now seems to be causing the trouble. There are often doubts as to whether the growers will receive any money at all because if a grower gets stuck with a bad batch of chickens be may well work for 3 months for a loss. For example, in Victoria recently a man growing 82,000 chickens over a 3 month period lost $3,400. The grower takes any loss caused by the vagaries of the weather himself. If there is a heatwave and he loses chickens that is his responsibility.

The growers contract to grow a batch of chickens supplied by the integrator. The grower provides heat and water for the chickens while the integrator owns the chickens and provides feed to be paid for at the conclusion of the batch and medication, which is charged for either at the time of delivery or again at the conclusion of the batch. The integrator decides which feed and medication is to be used and he also decides when he will pick up the chickens. When the chickens are picked up the grower has no control as to the procedures adopted for the weighing of his chickens. Although I would not infer that integrators deliberately set out to rob growers, the situation arises whereby if there is any doubt or human error the grower has no right of appeal. However, it should be clearly remembered that the growers enter into contracts with their eyes wide open. Even now there is a long list of people who would be quite happy to grow chickens for integrators. My concern is that there should be some sort of rationality and some sort of government concern for the industry as a whole. The integrators are well organised. The broiler growers themselves are well organised. The growers allege that there is a large degree of monopoly and overseas take over in the industry. I do not actually agree with this but I would point out that some of the integrators are part of the same complex of firms and activities that are affecting all aspects of the bread, flour and stock feed industries at present. There is certainly the menace of monopoly.

For the first time moves are now afoot for growers in all States to push for some form of State legislation to protect them from some of the more blatant forms of ungentlemanly actions being carried out Over the last 2 years in both Victoria and New South Wales, particularly New South Wales, negotiations between integrators and growers have been carried out with some degree of Government supervision. However growers have always found that when an issue of a difficult nature cropped up they were rarely as well placed in the argument as were the integrators with the Government. I have long been of the opinion that the New South Wales Minister of Agriculture is a very sympathetic and able man who somehow gets beaten at other levels of the coalition Government of that State. The main form of contract in New South Wales has been a pooled average return contract whereby all growers for a batch period are assured of roughly equal justice. Some integrators now possess large farms of their own and it is alleged that they can use these as bargaining instruments. However the main way the present contracts are being broken to the disadvantage of growers is through the ability of integrators to pull some members out of the pool or give special consideration to new entrants or favoured growers.

The Minister in New South Wales has been mainly advised of various claims via the Poultry Advisory Board. To extend the knowledge of this body, the New South Wales Broiler Growers Association and the Poultry Industry Association, which is the integrators lobby, have made submissions for a joint committee of integrators and growers with Government observers. From this committee we now have a further committee set up to examine the parameters of the costs in the industry. But total agreement can never be reached, and growers now see that they are back to square one. They negotiated over a long period. They reached a fair amount of agreement over 2 years, but they are still unhappy. This is causing a lot of dissent which is leading to a breakdown in relations painfully established by responsible people in the industry over a long period. Victoria, which has long been favoured by better prices than New South Wales, has recently had returns to growers significantly cut. The New South Wales Broiler Growers Association has always been prepared to negotiate fairly and prepare very detailed figures for quasi-adjudication by Government committees or the Minister. But, as I said, ultimate agreement is always hard to reach. It is alleged that the reaction of the integrators now is to start construction of their own farms, but I doubt that this will provide a cheaper chicken for the public in the long run. Growers maintain that present tax laws make it possible for integrators to expand their activities. Although growers themselves can exploit tax concessions they can do this only while they are expanding, and this again depends on the whim of the integrator.

At the start of my speech I stated that I did not think that growers really wanted a lot of legislation. They have been forced into this situation by the effects of integration on the industry. It does not go without saying that integrators want no legislation - some perhaps in their own interests. I would be the first to admit that there have been some growers who in previous years have abused the system, but this time has long since gone. The leaders of the industry are responsible people who only want some backing by the Government when it comes to the resolution of an issue where they have every fact on their side. Some growers have been told that legislation is a long way off and that integrators will be able to get around it in any case, and this may well be. If the States can agree on the need to act finally in the matter, a uniform contract may be able to be reached. I also hope that if the States can agree and if the Federal Government again can provide some sympathy and understanding, some form of independent arbitration can be set up via the States. Unless these things are done, more inflexible legislation ultimately will have to be introduced.







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