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Wednesday, 7 March 2001
Page: 25248

Mr ST CLAIR (12:20 PM) —I rise today to speak in support of the Pig Industry Bill 2000 and its changes and to commend the comments and discussion that the member for Page raised during his speech. We on this side of the House know the importance of agriculture in Australia and certainly have a clear understanding of where its future is. One of the issues that I came across prior to being elected to this place in October 1998 was the difficulties the pork industry was going through at that time, as the member for Page mentioned. In the lead-up to the election, it was very much part of my electorate activity to meet with pig industry representatives and understand the problems they were facing at that particular time. As we know, the industry was in the middle of a major restructuring process, with an increase in the importation of processed pork products, particularly from Canada.

Now almost 2½ years on, the pig industry has never been in a stronger position, with production and exports up and imports down. I support the Pig Industry Bill 2000, which has two main components. Firstly, it provides for the Australian Pork Corporation and the Pig Research and Development Corporation to be wound up and for an industry owned company to undertake the marketing, promotion and research and development functions. Secondly, the new industry company will be responsible for the strategic planning and the industry policy development functions which were previously the responsibility of the Pork Council of Australia, the industry's grower representative body.

The industry has come a long way since late 1998 when the then Minister for Agriculture, Fisheries and Forestry, my colleague Mark Vaile, the member for Lyne, introduced a $24 million pork package to assist this industry. This package, which was agreed to by the government and the industry, was for pork producers to continue to adapt to change, seize new market opportunities as they emerge and become more internationally competitive in order to maintain their current strong position. That was to get them to look outwards instead of being inward looking, as the industry had been focusing only on Australia. As we are all aware, the world market is huge. Until a week or so ago, I was not aware that pork is the meat consumed in the greatest volume around the world—it is the most popularly consumed meat. That goes to show what potential markets there are out there for our pork industry. We have an opportunity to take those markets by storm.

I was interested to hear the comments by the member for Page on foot-and-mouth. Recently, I was at Bunge Meat Industries in Corowa. They have a huge processing plant, with 22,000 sows on site and another 30,000 within the district. The general manager was talking about the absolute importance of having a pristine country for agriculture, as we do, second only to Antarctica, and the importance of keeping that clean green image here in Australia. I congratulate the Minister for Agriculture, Fisheries and Forestry, Warren Truss, on the fact that this government moved so quickly to bring in measures to protect Australia from the dangers of foot-and-mouth disease, particularly as its spread through Northern Hemisphere countries now appears to be airborne. That is a real concern and is something we have to be aware of. I have had some comments from people in my electorate when coming back to Australia from overseas who, fortunately, understand the delays that can happen coming through customs with the searches and increased measures being undertaken. They understand the absolute importance of these measures and that they are in place to protect our industries.

Mr Causley —We probably need more education.

Mr ST CLAIR —I think you are right. This is something that all of us can talk about in our electorates. The government's pork industry restructuring strategy includes, as I mentioned, a $24 million integrated package of grant programs to assist individual enterprises and groups achieve a strong market focus, improve their international competitiveness in the world food market or exit the industry. Between 1998 and 2001, the government's package has assisted pork producers with the development of business plans through the Pork Biz training program, which will have provided tailored business skills training and on-farm consultations to around 400 pork producers in almost 25 regions by mid-2001. The strategy provided $3.4 million assistance for 74 of the most severely affected pork producers from the 1998 market slump to exit the industry and stimulated approximately $170 million of investment in pigmeat processing infrastructure—we have seen the great results of that in Australia. It has encouraged formal networks and stronger business alliances between producers, processors, retailers and food service operators via the National Networks Alliance Program. It partly funded the formation of the Confederation of Australian Pork Exporters, which has helped to develop markets such as Japan and Singapore. Most recently the package funded the Singapore Market Alliance Program, announced in July 2000, to continue to strengthen the pork industry's presence in that market through ensuring product integrity and quality assurance, and it funded a number of other projects in risk management, market development—both domestic and overseas—production and training. That all just goes to show the amount of support and assistance that this government has provided to an industry that is now starting to reap the benefits for Australia.

This package has helped the industry move forward to the current situation where imports have recorded high levels but the industry exports more and at an increasing rate. Imports have been at record high levels during 1999-2000, totalling around 35,000 tonnes for the 12 months ending January 2001 and up 32 per cent on the previous 12 months. Rapid growth of Danish imports started in 1999 and ended in May 2000 and since then they have steadied at 19,000 tonnes annually, while Canadian imports seem to have peaked at around 17,000 tonnes annually. Denmark and Canada have been the main sources of imports, especially since the 1997 change in quarantine protocols permitting the importation of cooked Canadian pigmeat and uncooked, frozen, boneless pigmeat from Denmark, subject to cooking on arrival. Uncooked pork from Canada has been imported since 1990 and Danish pigmeat started arriving in March 1999.

Despite large volumes of imports over the past year, the Australian farmed pork industry continues to build its export capacity, with exports for 12 months to December 2000 reaching 39,000 tonnes. Farmed pig meat exports are up 38 per cent over the last 12 months, up almost 200 per cent on two years ago, and are valued at $155 million. This compares with pork imports for the same period of $138 million. So we have certainly seen a dramatic turnaround in this industry that, as I said before, is playing a major role in Australia's part in the pork industry overseas. Pig meat exports have plateaued over recent months as Singapore, our main export market since April 1999, continues to take over 2,000 tonnes of pork a month. Exports to Japan have also remained strong. The Australian pork industry has increased its exports to Singapore in the 12 months to December 2000 by 58 per cent, to almost 25,000 tonnes annually. This is valued at $91 million and constitutes 63 per cent of the export market by volume for farmed pork. The value of exports to Japan in the 12 months to December 2000 was $43 million and constituted 18 per cent of the export market by volume for Australian farmed pork. The domestic market has recovered significantly in the past 18 months from the lows experienced in 1998. Our activities in the Japanese and Singapore markets have had a substantial influence on underpinning our local market. Average Australian pork and bacon prices at 26 February 2001 were at a healthy $2.63 per kilogram for pork and around $2.35 per kilogram for bacon.

The new arrangements that this bill is introducing will allow a more coordinated and commercial approach to the development of industry policy and the delivery of services. Importantly, the bill will ensure for the first time that industry levy payers have direct influence and involvement in their industry body, ensuring that their levies are applied to best effect. The progressive opening of the domestic market to pork imports in recent years has put pressure on the industry to become more internationally competitive and to develop niche markets. Certainly as an industry it has taken up the challenge to be able to produce what markets require and market it accordingly. The restructure proposal is an industry initiative and comes to the government following extensive consultation and with an unprecedented high level of industry support. The industry now sees that if it is to succeed in the face of stiff international competition its industry structure must be as competitive as its producers to enable it to meet evolving market challenges.

The industry has already established and incorporated its new industry services company, a company limited by guarantee and operating under Corporations Law. The company is known as Australian Pork Ltd. Under this bill the company will be required, through contractual arrangements, to adhere to government conditions associated with the receipt of the Commonwealth's matching contribution for research and development and the provision of statutory levies for research and development, marketing and promotion and strategic policy development. The minister may give a written direction to the industry services body under certain circumstances with which the body must then comply. The assets of the Australian Pork Council and the Pig Research and Development Corporation will be transferred to either the industry services body or the Commonwealth. The Commonwealth can then make payments from the consolidated revenue fund to meet expenses or liabilities incurred whilst participating in the abolition of the APC and the PRDC, and in implementing the new pork industry structure. Any of the industry's net assets held by the Commonwealth after all expenses and liabilities have been met and the transition is complete will be passed on to the industry services body. The minister may transfer assets and liabilities from the APC and the PRDC to the new industry services body, and these will be exempt from stamp duty on transfer. The accrued entitlements of employees of the APC and the PRDC will be recognised at the time of transfer should they take up a position of employment with the new industry services body. The APC and the PRDC will be allowed to participate in the implementation of the new arrangements and their own demise.

The Pig Industry Bill 2000 really paves the way for the pork industry to go into the future with a more commercially driven and internationally focused regime—and that is what we are after. It will now have the capacity to respond quickly, effectively and efficiently to emerging industry challenges. Ultimately this will mean that consumers' high expectations of quality Australian pork will be consistently satisfied. I take this opportunity to congratulate the pork industry on how it has responded to recent challenges within both domestic and global industries. In recent years the industry has gone through some very difficult times. The turnaround in the industry has been spectacular. I hope that this dynamic change that the industry has gone through will continue to strengthen into the future. The industry leadership has shown remarkable courage and determination to set the industry's path for the future in a manner which will give the industry the opportunity to achieve its full potential. I pay tribute to the work of the industry in reaching a stage where it is now putting in place for the future a modern and progressive structure to underpin its own future. The fact that industry's own unity has brought this proposal to government is just another example of a maturing industry looking to secure its future in the world market. The bill and the framework that hangs from it create a turning point for the management of pork industry affairs and for the potential for industry growth and development. It will establish a solid foundation for the industry to continue to challenge and secure world opportunities in the pork market. I commend the bill to the House.