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Dairy industry: arrangements for 1970-71



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P E

S MINISTER FOR

S AT EM E N I UT < ^ PRIMARY I NDUSTRY

DAIR Y . INDUSTRY ARRANGEMENTS FOR

The Commonwealth Government will provide

about $46g million for the Australian dairy industry

in 1970-71.

This was announced today by the Minister

for Primary Industry, Mr. Anthony.

He said the $46T-million would include

the existing $27 million bounty on butter and cheese,

plus an additional grant of $19k million to be paid

as bounty on butter and cheese and skim milk powder,

casein and other non-fat products.

This would allow returns to producers in

1970 -7 1 to be maintained at 34 cents per pound commercial butter equivalent if production was held to 220,000 tons

of butter and 70,000 tons of cheese.

Mr. Anthony said the method of ensuring that

this level of return was maintained would be changed from

the previous underwriting arrangement for butter and

cheese.

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He said the Government had considered

the underwriting arrangements for butter and cheese

for 1970-71 in the light of proposals submitted by

the Australian Dairy Industry Council (A.D.I.C.).

These involved Commonwealth and State

action aimed at meeting the problems caused by.

increasing production in the dairy industry.,

Mr. Anthony said "With a view to

avoiding unwanted surpluses the Council's proposals

provided for action to limit 1970-71 butter and

cheese production on a voluntary basis to 220,000

tons and 70,000 tons respectively, conditional on

the Government agreeing to underwriting producers'

returns for butter and cheese at the 34 cents per lb.

equivalent for 1970-71.

"The Government has accepted the need for

initial pay rates at reasonable Ieve?s.

"However, as the Government's commitments

on underwriting have related to total production, the

arrangements which have continued since 1958 are con-sidered no longer appropriate in the present situation.

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"In lieu of the underwriting arrangements

for butter and cheese the Government has decided that

a grant of $15.882 million will be made to the

industry for distribution as bounty on the 1970 -71

p roduction of butter and cheese under the Dairying Industry Act, additional to the present bounty of

$27 million.

"The total bounty will now be -2.882

million.

"The grant represents the amount the

Government has estimated will be required to maintain

producer returns at the 3-- cents per pound commercial

butter equivalent if production is held in 1970-71 to

220,000 tons for butter and 70,000 tons for cheese.'t

Mr. Anthony said a further A.D.1..C.

proposal was that devaluation compensation should be

continued on dairy products other than butter and cheese.

The Government had agreed that a grant of $3.379

million be made to the industry for distribution as

bounty on 1970-71 exports of skim milk powder, casein

and other non-fat products..

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It did not consider the question of

condensery products as the A.D.I.C. proposals were

related to production restraints for butter and cheese.

The grant of $3.379 million was related

to the quantity exported in 1969-70 and took account

of price increases which had occurred since devaluation.

Mr. Anthony said: 14As the Government is

concerned that the industry should not get into a

surplus situation like the wheat industry, the

arrangements for 1970-71 have been designed to place

the fullest responsibility on the industry to restrict

production by requiring it to make its own arrangements

to maintain producers, returns at the 34 cents level.

"If the industry does not control pro-duction within the limits set by the Australian Dairy

Industry Council, producers' returns will fall below

dairy products covered by the arrangements.

devaluation compensation being paid in 1970-71 for the

"The grant arrangements will rule out any

the 3- cents level.

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It did not consider the question of

condensery products as the A.D.I.C. proposals were

related to production restraints for butter and cheese.

The grant of $3.379 million was related to the quantity exported in 1969--70 and took account

of price increases which had occurred since devaluation.

Mr . Anthony said: As the Government is concerned that the industry should not get into a

surplus situation like the wheat industry, the

arrangements for 1970-71 have been designed to place the T"ullest resp onsibility on the industry to restrict production by requiring it to make its own arrangements

to maintain producers' returns at the 34 cents level.

"If the industry does not control pro-duction within the limits set by the Australian Dairy

Industry Council, producers returns will fall below

dairy products covered by the arrangements.

devaluation compensation being paid in 1970-71 for the

"The grant arrangements will rule out any

the 3- cents level.

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'The grant arrangements are an interim

measure and relate only to the year 1970-71. They are

designed to meet the urgency of the present situation

and the industry will now have to start looking at

long-term proposals to control production, especially

in view of Britain's probable entry into the E.E.C.UI

To supplement their production restraint

proposals the I..D.I.C. also had requested that a

restriction be placed on the import of cheese into

Australia unti]. Australian milk production levels had

been adjusted to meet domestic and overseas market

requirements for dairy products, Mr. Anthony said.

Cheese imports in 1968-69 represented 13%

( 5, )--00 tons) of total consumption and were continuing to increase.

It was estimated that they would reach

6,500 tons in 1969-70.

"Many of the countries from which imports

are being made restrict the entry of Australian dairy

products," Mr. Anthony said.

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"At the present time Australia remains the

only open market for cheese in a situation of world

surplus and heavy subsidisation.

"The case for import controls becomes even

stronger when production controls are being exercised

by the industry.

TiThe Government has decided that the matter should be examined by a special Inter-departmental

Committee and that I should make a recommendation to

the Government.'

Mr. Anthony said the A.D I,C. proposals also

included

an immediate stop to the development of new farms

for dairy production

. the immediate licensing of all dairy farms, with a

provision that no new licences be issued except by

agreement of the Australian Agricultural Council.

"These are matters which fall within the

jurisdiction of the States and the responsibility for

early action rests with them," he said.

Canberra, 23rd June, 1970.