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Address to the Australian Fodder Industry Association Annual Conference, Hamilton, Victoria

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Australian Department of Primary Industries & Energy

Senator The Hon Judith Troeth Parliamentary Secretary for Primary Industries and Energy Address to the Australian Fodder Industry Association Annual


Hamilton, Victoria, 6 August 1998

Introduction Ladies and gentlemen, it is a pleasure to join you today and address this year's Australian Fodder Industry Association (ALIA) Annual Conference.

I would like to congratulate ALIA for organising a comprehensive conference that covers a range of significant issues affecting your industry.

I would also like to acknowledge the sponsorship of this Conference by the Rural Industries Research and Development Corporation (RIRDC) and a number of commercial enterprises.

Challenges to agriculture and government action Sound economic management

This Government is committed to getting Australia's economic fundamentals right.

Australia's macroeconomic foundations are the strongest they have been for 25 years. We now have an inflation record which is second to none and the lowest interest rates since the 1970s.

As a mainstay of the national economy, we need to ensure Australian agriculture has a strong and vibrant future. The sector is a highly productive and competitive exporter, generating a quarter of the nation's export income.

Agriculture also provides the raw materials for the value-adding, food processing industry, the nation's largest manufacturing sector and a substantial employer in regional Australia.

The sector has, however, been facing unprecedented change bringing with it new challenges. But challenges can also provide opportunities, particularly through the globalisation of markets, international trade reform and the recent rapid growth in Asia's food markets. Of course, the recent economic crisis in Asia is one of the sector's newest and more serious challenges.

The Government's sound economic management has ensured Australia is well-placed to deal with the fallout from that crisis.

Producers taking responsibility for their industries

The Government is also working with industry to develop organisational structures which are directly accountable to, and controlled by, the producers themselves.

This involves industries assuming responsibility for their own affairs and provides the basis for enhanced competitiveness and greater responsiveness in the face of substantial change in world markets.

Some examples include recent substantial restructures in the meat and wheat industries.

Action Plan for Australian Agriculture

The Action Plan for Australian Agriculture, recently launched by Minister Anderson, is also a demonstration of how industry is taking responsibility for its future.

The plan provides a focus for industry and government to work towards a common vision for agriculture.

That vision is for: 08/10/1998

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"Australian agriculture to be based on profitable, competitive and sustainable family farm businesses, recognised as world leaders in production efficiency, product quality, innovation and the ability to supply and respond to market needs".

The Plan has been developed by industry for industry, and is only the first step in an ongoing process.

The Plan is flexible and will continue to be refined and developed over time.

The vision also includes an outlook for agriculture, detailed action plans and tracking measures for peak bodies and governments and an achievements and initiatives document.

The next step involves industry refining the specific actions in the Plan and vigorously pursuing their implementation

Many of these measures are already underway or in an advanced state of planning.

Minister Anderson will convene an annual meeting with key people involved in agriculture to discuss implementation of the Plan, what progress has been made towards achieving its objectives and identify the emerging issues that need to be addressed.

Agriculture - Advancing Australia initiative

The Agriculture - Advancing Australia initiative, launched last year by the Prime Minister and Minister Anderson, is a key element in the Federal Government's overall strategy for making farming more competitive, sustainable and profitable.

Many farm family businesses are well positioned to benefit from the exciting opportunities opening up in overseas markets because of the liberalisation of world trade.

However, others have been seriously affected financially by the exceptionally difficult market and climatic conditions over the past decade.

The 'Triple A' initiative, as it is known, helps rural people respond and benefit from changing circumstances. Major initiatives include:

A tax linked financial risk management tool - the Farm Management Deposit Scheme, and more funds for:

• continued research into the effects of climate and weather on agriculture; • education, training and skills development programs; • social and economic development in our rural communities; and • adequate welfare benefits and adjustment assistance for farm families.

The fodder industry should be part of, and benefit from, these important Government initiatives.

The Australian fodder industry

The fodder industry is an important rural industry.

I understand that it comprises around 20,000 producers in all States with the major production occurring here in Victoria and also in New South Wales.

The industry produces a wide range of products, including lucerne, cereal, pasture and other types of hay and cereal straw.

The Australian Bureau of Statistics estimates that the farm gate value of the industry is around $632 million. And that does not include increases in value from downstream activities.

In preparing for this Conference, it was interesting to follow the industry's development following establishment of AFIA as its peak body.

The fodder industry is now recognised as an important industry in its own right.

It is a vital component in Australia's food chain, serving Australia's dairy, feedlot and general meat industries as well as the horse and poultry industries.

It is no longer seen as an adjunct to the grazing and other animal-based industries. AFIA's achievements are impressive. The unification of the industry creates a solid base for future growth and development.

I would like to commend past and present Committee members, in particular Chairman Colin Simpson, for their contribution to both AFIA and the industry itself.

Quality assurance

Although most of you are probably well aware of AFIA's achievements, I would like to single out a few that have made an important contribution to helping secure the industry's future: 08/10/1998

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• the commitment to adopt a quality assurance scheme; • the introduction of a fodder vendor declaration form last year; and • the introduction of a national standard methodology for fodder testing.

Quality is the theme for this year's Conference, 'Quality in the Fodder Industry'. That is a clear indication of the industry's responsible attitude towards its future development.

To meet the demands of domestic and overseas customers, Australian agriculture must continue to shift its focus from production to markets.

Quality assurance is a fundamental part of this shift, and offers tangible benefits for growers:

• it may provide productivity gains because of simple but effective management practices, reduced risks and lower production costs; and • in some cases, it may provide marketing advantages such as receiving premium prices for premium products, attracting new markets or, more importantly, helping to hold existing markets in the face of increasing


This last point is particularly important. It must be recognised that Quality Assurance will not always be about cost savings or capturing price premiums but sometimes about maintaining market share against fierce competition.

The Australian fodder industry has successfully developed many lucrative export markets, in particular, the Japanese hay market.

Maintaining reliable deliveries of a quality product that meets the customer's specifications is important if markets such as these are not to be put at risk.

I strongly support the introduction of quality assurance measures in our primary industries and I urge you all to continue to support AFIA in its efforts to implement them in the fodder industry.

There is a world-wide trend towards quality. This includes commodities with tighter contract specifications and a greater awareness by buyers and consumers of the importance of quality.

The fodder industry can and must meet this challenge.

Government action can complement industry initiatives. For example, on behalf of the Minister Anderson, I recently launched the National Strategy for Agricultural and Veterinary Chemicals in Australia. (A downloadable PDF file on the strategy can be accessed at the ARMCANZ website.)

The strategy aims at achieving best practice management of our agricultural and veterinary chemicals - something that is essential in delivering a quality product and ensuring the sustainable future of our primary industries.

The strategy was developed cooperatively between industry, Government and public interest groups, and involved extensive consultation.

It represents a new, broader phase of national cooperation in deciding how we use and manage our agricultural and veterinary chemicals.

Research and development

The Government has long recognised that research and development are vital if we are to have innovative, competitive and profitable rural industries. Industries that make an important contribution to the Australian economy.

You may be aware that John Anderson asked me earlier this year to take on day-to-day responsibility for research and development issues within the Primary Industries Portfolio.

I will also be providing advice to the Minister on strategic policy initiatives relating to research and development issues.

The Government believes the well-established research and development corporation model is the best way of delivering a wide range of benefits for both the industry and the wider community.

The Government recognises these dual benefits by matching industry's contribution to R&D dollar for dollar. The Government also recognises that the priority areas for research and development, such as ensuring sustainability of the natural resource base, are best pursued through a partnership.

RIRDC has funded a small program of research and development for the fodder industry. And while this has enabled the industry to determine the direction it wants to take and allowed AFIA to be established there is clearly room for more targeted R&D.

If the fodder industry is to maximise the benefits available through research and development the next logical step is for it to establish its own research and development scheme.

Indeed, this has already been recognised by industry. In early July, Colin Simpson met with me in Canberra and 08/10/1998

delivered a submission from APIA proposing to establish a Research, Development and Education Scheme to be funded by a levy on fodder production.

While it's true that R&D clearly benefits from funds generated by compulsory levies, levying farmers' incomes requires careful consideration. To this end, the Government has agreed to a set of'levy principles' which must be met before new levies can be applied.

I would like to commend APIA on preparing a comprehensive submission outlining the case for a fodder research and development scheme. The submission is both focussed and well researched.

However, as I have said, applying new levies is a serious matter and certain processes must be followed before legislation putting in place a levy can be introduced into Parliament.

Proposals to implement new levies must also be assessed against the Government's twelve levy principles.

And I should point out that one of those processes includes seeking the support of both the Treasurer and the Prime Minister

To some, this may seem time consuming, but sound process can often take time.

A research and development scheme will not only benefit your industry, it will also indirectly benefit the manufacturing sector which draws many of its raw materials from the fodder industry.

It will also provide flow on effects to the wider community through increased economic returns and improved products as well as better environmental and resource management outcomes.

I will be in touch with the industry after the evaluation of the submission is completed.

Conclusion As I said earlier, it's vital that our rural industries take the initiative and make their own plans for the future.

Indeed, it may be said that this Conference is part of that very process.

Conferences such as this are an important way of building on past achievements and for the Australian fodder industry to realise its full potential and to continue to make an important contribution to a vibrant and prosperous rural and regional Australia.

I wish all delegates a successful Conference and Annual General Meeting.

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