David Gillespie (Lyne, National Party) Share this | Hansard source

I rise to make a few comments about this very important bill, the Primary Industries (Customs) Charges Amendment (Dairy Cattle Export Charge) Bill 2020. It raises lots of questions about the dairy industry. As I have a lot of dairy farmers in my electorate of Lyne, and in the adjacent electorates, I have a deep appreciation of the challenges in the dairy industry. This bill is about the export charges for dairy cattle that are exported to Asia, in most instances, which is a reflection of a very sorry period in the Australian dairy industry on the east coast. There have been instances where fertile valleys on the east coast have literally had their fresh water dry up, such that water was trucked into farms. There are several rivers in the Lyne electorate that have had that problem. In the Gloucester Valley we had similar problems, with two of the three water sources pretty much drying up, such was the severity of the drought. Compounding this were pressures on the dairy farmers themselves, with unsustainable prices. We have been moving comprehensively to change the way milk is marketed and to introduce the dairy code of conduct—we made it mandatory, as a mandatory specified code under the Competition and Consumer Act. But I am hearing feedback that even though these mandatory codes were being put in, establishing the right to sell to multiple partners, to multiple clients, to retain ownership beyond the farm gate, there is still resistance from some entities, including a well-known cooperative on the North Coast of New South Wales.

Burying people in detail is not going to help anyone. Suffice to say that we hope the trading opportunities from the mandatory code of conduct will reduce the risk for both processors and farmers. At the moment, contracting is done, in most instances, over long-term contracts. Where processors have to take a punt on a price, people will contract with them. But, if they give too much, they might end up like Murray Goulburn and price themselves into a permanent loss situation. Being able to trade your milk and hedge your risk with multiple contracts to multiple buyers over varying times will allow both the producer and the processor to manage their risk.

I don't understand why all the processors aren't running as quickly as possible to embrace those changes. Also, the body of work is being done to set up the Australian milk pricing initiative that Minister Littleproud announced. There are areas where trading of milk happens in shorter contracts, but we want this to be accessed by all farmers, not just processors on a small scale. It will improve the profitability because it will allow both the farmer and the processor to manage risk. They can ride the highs and lock in a margin. It is a commodity that fluctuates in price; people can know to invest to expand or to shrink.

The tragedy that comes to light in our discussions on this bill is that, over the last three years, there's been an explosion in the export of our dairy herd. A lot of it went as live cattle to set up dairy herds in China, and a lot of it went to other Asian countries, because male dairy cows are a really good protein source. It just reflects the shrinking of our industry.

The member for New England, who spoke previously, mentioned the criticality of water. In Victoria, down in the Murray, the price of water got so high that farmers were not able to turn a dollar. They were losing money hand over fist. That's where a lot of these export cattle have come from, as well as in my area. We need further reform in this sector. Other industries have mandatory codes of conduct for how product is purchased and traded between primary producers, retailers and processors. That would be a great initiative to have in the dairy industry—a mandatory code of conduct in the food and grocery code.

The other thing is that competition reform remains a policy of the National Party, of which I'm a proud member. We think that competition reform and having a divestment power for all retail, not just in the dairy industry but in all retail and goods, would be a really good thing for this nation. This bill makes amendments so that the Livestock Exporters' Council voluntary code is made mandatory. It makes the research and development in live cattle export much more viable. That's the genesis of this. No-one likes levies, but, if we want this industry to get the best value for its product, a bit of research and marketing will help.

I would like to remind everyone that, for the dairy industry, the rain has come. Things are more profitable, but we need reform so that, for the long term, we have a much more viable industry that can manage risk. The methane issue is real. The biodigester was a project that I promoted up and down the corridors of this building. It is a great project. The potential to capture methane, turn it into fertiliser, clear water and get rid of the smell is a win for everyone. Many more dairy farmers could partake in that. Also, clever farming and cropping can capture methane, as long as you have modern farming techniques. It's not all bad. Methane is a problem for some, but I think a zero emissions target is unrealistic. I commend this bill to the House.

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