Senate debates

Wednesday, 15 May 2013

Matters of Public Interest


1:34 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

I rise today to share with the chamber and with the community the parlous situation in which agriculture and horticulture find themselves in this country. I refer to horticulture, to livestock production and to broadacre farming. It is interesting to follow on from Senator Thorp and her discussion about manufacturing, because the largest manufacturing sector in this country is food manufacturing. Indeed, the state of Tasmania is very prominent when it comes to the food manufacturing sector.

It was only three weeks ago that I had occasion to be with the Hon. Sharman Stone in Shepparton in the electorate of Murray when SPC announced that it would be unable to take a full quota of fruit from many of the growers who have supported it for three generations, with some growers to have their trees removed completely and utterly because there will be no contract at all and the others to have contracts at quota levels which will not make them viable. As I say, second and third and even fourth generations of the same families have been involved in the canning industry. It is a tragedy to see this happening. Yes, it is the high value of the Australian dollar, and there is an allegation of dumping going on—cheap competition from markets overseas—but once again this industry, proudly a small business enterprise industry, is on its knees. Certainly, action has to be taken. I know there is engagement with the minister for agriculture, and I hope there is also engagement with the trade minister and others, and with the Victorian state government, to deal in some equitable way with the problems that are occurring not only in the Goulburn Valley but also, I understand, along the Murray River and in other areas.

I turn to the parlous situation confronting livestock industries right across this country, particularly in North Queensland, the Northern Territory, the Kimberley and Pilbara regions of Western Australia, and of course down into our pastoral and even our agricultural areas. It is terrible to be a prophet of doom, but when in June 2011 the trade in live cattle to Indonesia was summarily banned, with no advance notice at all, I made two predictions. The first was that this would eventually hurt the meat processing industry, as indeed it was hurting the live cattle and subsequently the live sheep industries. That has come to pass. At the time, the meat processors thought this was a good deal: 'We have greater access to stock. Therefore, prices will come down and we will not be hurt.' Well they are hurting badly. The second was that we needed only a poor wet season across the north of Australia and we would have an animal welfare disaster of a scale and a type we had never seen in this country. Regrettably that is exactly what has been happening and that is why at this moment 300,000 cattle in Queensland are facing either being humanely destroyed or starving to death. It was a wholly preventable incident and that is where the tragedy comes from—it was a wholly preventable incident.

Let me put some statistics on the map for people who do not understand the industry. You will often hear, 'Live exports have taken such a significant proportion of cattle away from the market.' Ninety-two per cent of all Australian cattle are processed in Australia. Only eight per cent were processed through live exports to other specific niche markets. For those who think that the live export industry in some way was starving meat processing and causing abattoirs to close, they are completely and utterly fallacious comments. Two-thirds of Australian produced beef is sent overseas. We are the second biggest exporter of beef in the world—not the second biggest producer but the second biggest exporter.

It has been suggested that we go back to seasonal abattoirs and that we can process all of these animals on shore. As a young veterinarian I remember seasonal abattoirs in towns like Broome, Derby, Wyndham and Tennant Creek, all of which have closed. Why? Not because of the live export trade. They were long closed by the 1970s and the 1980s. The first shipment of live animals that went from Darwin to Indonesia was in 1991, unfortunately coinciding with the Dili massacre in East Timor. This dishonest and untruthful statement about abattoirs closing because of the live export trade is absolutely wrong.

We export our beef to a range of markets—Japan, the US, South Korea, South-East Asia and the Middle East. Whilst this is an aside to my comments this afternoon, Australia is being badly hurt because we do not have a free trade agreement with South Korea. America does, so they have a great advantage over us in selling into that market. We do not have a free trade agreement with China, which New Zealand has, so in China we are significantly disadvantaged. These issues have to be corrected and changed and they will only be corrected once we get a coalition government here in Canberra.

Recently the comment was made by animal activists—and I thought, 'What a put-down'—that a business model relying on one market, which can change at a whim, provides no surety or future security for producers. As a young lady from Animals Australia said:

It is disappointing to continue to hear that the five-week suspension to Indonesia in 2011 is still being blamed for issues facing the industry in 2013.

You bet they are disappointed! That same organisation and the other activists can largely thank themselves for the animal welfare disaster occurring across the north and the west of this country at the moment. In the cattle herds across the north the cows are heavily in calf and will soon drop their 2013 calves. Their previous calves have now been weaned and are still on the rangelands. Of course the calves from the preceding years should already have gone overseas but they are out there competing. That is why—added to poor seasonal conditions—we do not have sufficient feed.

It has been put to the wider community that in the Middle East markets there has been an increase in the sale of sheep meat—into countries like Bahrain, Qatar and Kuwait. What a fantastic thing that is because for a long time, for up to 40 years, the two trades have been complementary. The reliability of our live export trade to those markets has also led to increases in chilled meat sales, although they aspire to different markets. The increase in sales of sheep meat in recent times into Qatar is largely because that country, now a high-socioeconomic country, is building more hotels and restaurants and taking more of our chilled meat product, and how proud we are about that. But the second market, the low-socioeconomic market, the market which is comprised of the majority of people in countries like the United Arab Emirates, Bahrain and particularly Saudi Arabia, are markets which the meat trade will never supply simply because they are low-socioeconomic and do not have refrigeration systems. They will buy out of wet markets.

Do we want to see an increase in meat sales? Of course we do. This country has tremendous capacity to provide both. As I have said so often and will go on saying: of the 109 countries around the world that export live animals only one country has ever invested time, money, resources and expertise into increasing animal management, animal husbandry, animal nutrition, transport and welfare, and that is Australia. Should we ever be denied the opportunity to continue live export trading into those markets two things will happen—animal welfare standards in those countries will deteriorate back to levels which we do not want to see and, secondly, as has happened in Saudi Arabia and as is happening now in Indonesia, we will also lose our meat markets.

Since 2011 the number of live cattle exported into Indonesia has halved. If the economic theorists are right, they would say that that would obviously lead to a doubling, at least, of meat sales. Well, what has happened? Our meat sales into Indonesia have also halved. We were supplying protein to 69 million low-socioeconomic Indonesians prior to the time the live trade export was summarily banned. No longer is there a supplier of that protein going to those people. The cost of meat is so high in Indonesia that it is, again, only those from high-socioeconomic backgrounds who are able to enjoy it. Australia's reliability as a supplier of protein has been shot. Over the last few years we have had representatives from the UAE and other countries saying, 'We want to come and buy your farming land. We want to run animals so that we can guarantee a supply to our own markets.' We have always said to them, 'No. We are a developed country. Allow us to grow these animals. Allow us to send you the product and you can consume it.' But, no, that circumstance has now changed completely.

I think it was in the year 2009 that the RSPCA commissioned the company ACIL Tasman to do what would be best described as a summary desktop study of the impact on the Western Australian sheep industry if the live export trade were phased out. Remarkably, the live export trade has been the one reason why we have supported prices in sheep in Western Australia for up to 40 years, because there has been competition between meat processing and the live trade. ACIL Tasman—how they achieved it I do not know—came to the conclusion that there would be no change in the prices if the live trade export ceased to be a competitor. Let me tell you some statistics of the last six to eight months. As recently as a few minutes ago one of my colleagues sold a line of rams for $44 that, last year, he would have got $120 for. He lost money on a line of ewes by sending them to the market recently where he sold them for $15 a head, and this time last year he would have got $60 a head for them. I could, of course, go on at greater length, but I simply leave the message on this topic that if animal welfare standards are to be preserved in this country and in our target markets Australia had better stay in the game.

In the last few moments available to me I want to reflect on the broadacre farming circumstance in my home state of Western Australia. I was asked to speak at a crisis meeting of 1,000 farmers in the Eastern Wheatbelt town of Mereddin two weeks ago. That was a town where I commenced my career as a veterinarian. It is a district that my family has been involved in for many, many years and it was so distressing to see that circumstance. But there are some lessons. Australian farmers would probably be amongst the few who do not insure themselves against loss of income. We all know that in any non-farm enterprise any prudent business person would always insure themselves against loss of income. It is the case that the more indebted a business is the more the bank would require that you have a form of loss of income insurance to protect the bank's investment, let alone the farmer or the businessman themselves. Indeed if you look at agriculture around the world—North and South America, Europe, the Eastern Bloc countries, South Africa—the concept of what I would call 'risk mitigated' or even 'multiperil' crop insurance is quite common. It has not been so in this country.

Whilst in the industry we appreciate some of the gestures being made now by the federal government and state governments to assist broadacre farmers, it really comes down to their capacity to know that they are going to be able to farm next year and their capacity to take out some form of insurance that will protect them against drought, against frost and against other events that cause loss of crop yields. There are a couple of new products in the market now from a Canadian company and from a Swiss company. So we have some competition and different products. I will leave this topic with the observation and the plea that if we are to actually do something for broadacre farming in this country, if we are to preserve the long-term integrity of food production, I would urge government as well as the industry to examine this type of option to ensure their future.