Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I seek leave to incorporate an adjournment speech by Senator Watson on Meat and Livestock Australia.

Leave granted.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

I rise tonight on behalf of farmers who have raised their strong concerns to me regarding the efficiency and accountability of Meat and Livestock Australia.

According to their web site ‘Meat and Livestock Australia or MLA is a producer-owned company that works in partnership with industry and government to achieve a profitable and sustainable red meat and livestock industry.’

The MLA web site goes on to say that ‘we work with industry and government to protect and increase our access to markets, providing the market intelligence and analysis that supports Australia’s position in trade negotiations’.

Primarily funded by a $5.00 transaction fee for every head of cattle sold and 2% of the total sales price for mutton and Iambs MLA enjoys a total budget of $96 million dollars annually including an increase of $16 million in the last 12 months.

In return MLA are to provide Research and Development and marketing services to the Australian red meat industry.

Yet sale yard prices have dropped and the producers’ share of the consumer dollar continues to be eroded. As an example, United States beef producers receive 47% of the consumer dollar; while Australian producers receive between 22% and 28%. For their higher return United States producers only pay $1 per head levy a full $4 less than their Aussie counterparts.

Considering that the cost of fertiliser and other key components required for sustainable production continue to spike in some cases triple producers input costs, it is little wonder farmers are seeking answers to their questions on MLA efficiencies and accountability.

Australian meat producer’s levies have funded the Meat Standards Australia eating quality assurance program and the National Livestock Identification Scheme both of which are seen by farmers as bureaucratic failures when you consider markets obtained through the BSE scare are being fast eroded due to the return of the United States who I might add have no costly trace back system in place yet are able to re-enter lucrative markets throughout Asia.

The return of the United States into Australia’s third largest beef export market, South Korea is having an unsettling impact on the Australian market in the short-term and as a result Australian cattle numbers are falling due to a basic lack of profit. With the United States threatening to take South Korea to the World Trade Organisation, Australian cattle producers can only wonder how long the current protests of South Korean consumers can hold out against the might of the United States.

Despite encouragement from all levels of the cattle industry for the current Labor Government to ensure any free trade agreement is similar to the one South Korea has signed with the USA; producers wait with fingers crossed that the promised feasibility study on a possible Free Trade Agreement will be released soon.

USA have their Free Trade Agreement; Australia is only up to the feasibility study stage.

Let’s for a moment compare the global price for beef and the following alarming statistics will be revealed. When converted to Australian dollar dressed weight—UK producers receive $5.29, Ireland producers receive $5.42, Italian producers $5.93, Brazil producers $3.04, whilst Australian producers receive $2.83. What happened to the quality standards and trace back systems being MLA’s answer to improved market access and therefore more profits.

Currently large tracts of land in the Northern Territory is up for sale as pastoralists seek to exit the cattle industry before market conditions in their industry deteriorate any further. It has also been reported that with carbon credits likely to come from plantations, big areas of the Territory may be given over to wide-scale forestry. Wasn’t food production in northern Australia the 2020 Summit’s answer to maintain food production through climate change?

Let me now move to the sheep meat industry. New Zealand is the world’s fourth largest producer of Iamb and mutton. Despite Australia being ahead as the third largest, New Zealand is the world leader in sheep meat exports and is therefore Australia’s largest competitor in world Iamb and mutton markets.

Our Prime Minister Kevin Rudd recently visited China full to the brim with good intentions of restarting the currently frozen discussion between Australia and China on a Free Trade Agreement. He has returned empty handed.

Meanwhile his New Zealand counterpart took home the completed article—a Free Trade Agreement with China that is expected to hurt Australian lamb producers. Despite being unable to speak fluent Mandarin, Prime Minister Clark was able to negotiate a good deal for her farmers including 35% of New Zealand exports to China will be tariff-free by October this year, falling to zero by 2016.

After being beaten over the line by our New Zealand neighbours, Australian producers will now need to concentrate on specific markets in China to compete.

In fact Australian farmer’s ability to tap into the growing demand for food in the markets such as China and India is essential.

I will now return to my initial question of the efficiency and accountability of Meat and Livestock Australia. Farmers are contributing the $96 million budget to as previously stated protect and increase Australia’s access to markets.

With prices falling, access to key markets in decline, free trade agreements on hold and expensive quality assurance and trace back systems are failing to meet their expectations I believe it time future MLA funding be linked to outcomes and performance. After all, farmer levies are paying the bill.