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Serious government concern on dairy production



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V

MINISTER- FOR

MENT 4, AUSTRALIA t PRIMARY INDUSTRY

oZ

SERIOUS G0 TE 41111T CONCERN 011 AIRY PRODUCTION

The Commonwealth Government is seriously concerned about

increasing production in the dairy industry,,

The Minister for Primary Industry, Mr. Anthony, made

this clear in the I-Louse of ?epresenta.tives by repeating an earlier

call for a reduction in butter output.

He said it appeared that, if present trends continued, the Commonwealth underwriting of 34 cents per pound commercial butter would involve provision of i20 million in 1970/11 in

addition to the existing bounty commitment.

"This is a terribly serious situation for the dairy

industry, the Government and the taxpayer," he said.

Nr. 1^nthony said the dairy industry must do some very serious thinking, and come forward with plans to seal off production at its present level, or put some deterrent in the way of higher

production.

He said most of the increased production was occurring in Victoria, where 64 per cent of the nation's butter and 85 per cent

of butter exports were produced, and where production was growing

every year,

Mr. Anthony was replying to s, question by l r.. Robinson.

(c.3?., 1- .S. ?. ), who asked for an indication of the Government's

underwriting proposals in the light of the developing production

situation.

In his reply, hr. Anthony said `[It would not be possible

for me to make an announcement at this stage as to what the

underwriting would bee

"For the past 11 years the Commonwealth has announced annually that the would be an underwriting of 34 cents per pound. This decision is generally made about July,

PRESS

STATE

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"I think I would be right in saying that the Government

is very concerned at the present trend in the dairying industry,

"I have expressed in this House before my concern at the

increasing production that is taking nlsceo

"If there is to be a national policy it should be not

towards holding production but, if anything, reducing it,

"At the moment i.t appears that this year's production

will be approximately 220,000 tons.

"This means more butter going on to the overseas market

and reducing the return to producers.

"The situation has been made more acute by the fact that,

for the first time, it looks as if we will have a surplus of butter in. _t.his _.caur try..._ We may have.._5, 000 t.on..s.-t.ha 1--we- cannot even get rid of.

"The Commonwealth Equalisation Committee, which gives a

forecast of the next year so it can determine what the interim

payment will be, has told us we must start thinking in terms of 230,000 tons in 1970/71. If this happens it means that, at the

end of the year 1970/71, we will have a surplus of 20,000 tons of butter,

"This is a crazy situation and I do not think a Government

can be expected to continue--to guarantee an underwriting of 34

cents when one calculates what the Government's commitment would

be under these-circumstances.

"My department informs me that, in addition to the bounty that is ..givcn_.now,. if '34 cents is to be maintsc-in-e fur.-the year 1970/71 an additional 'aa20 million will be required.

"This is a terribly serious situation for the dairy

industry, for the Government and for the taxpayer.

3

"T have spoken already to some dairy industry leaders.,

I have said that they will have to do some very serious thinking

on this question to try to bring forward plans at least to seal

off production where it is or put some deterrent on people

continuing to produce more,

"Unfortunately, most of this increased production is taking place in Victoria where, today, approximately 64% of Australia's butter production and about 85% of the butter that is being exported overseas is produced.

"Every year, production is increasing there. Victoria is

practically the only State where we have seen this increase taking

place, although production in Tasmania is increasing by a small amount annuailyo

"If the industry expects the Government to maintain the

underwriting at 34 cents; it certainly will have to put up some suggestions and some proposals to the Government as to how some disincentive might be introduced against people who will increase production.

"''While people might

should stop in and formulate

production, may I again add,

wheat industry, that the Corn]

over production.

say that the Commonwealth Government

some method of holding or controlling

as I have mentioned regarding the

nonwealth Government has no control

"This is one of the sovereign rights of the States and, therefore, i-t is a matter that concerns not only this Government but also the State Governments."

In reply to a subsequent question by Ir. Buchanan (Lib, Vie,), fire knthony said the problem was made even more frightening by the nightmare of Britain's possible entry into the Common I4arket4

"I hope to be in constant touch with all the dairy industry organisations," he said,

-4-

"1 have told them that if there is any hell) my department

can give them it will be there, ready and waiting.

"And whenever I can be of help in uniting and co-ordinating

the industry I will certainly do my best."

Canberra, 14th April, 1970.