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Chapter Three - Agriculture, Fisheries and Forestry portfolio

Department of Agriculture, Fisheries and Forestry

3.1       The Committee heard evidence from the Department on Tuesday, 15 February 2005. The hearing was conducted in the following order:

    • Management Services and Corporate Governance
    • Food and Agriculture
    • Biosecurity Australia
    • Market Access
    • Product Integrity, Animal (including aquatic animal) and Plant Health
    • Australian Quarantine and Inspection Service (AQIS)
    • Australian Bureau of Agriculture and Resource Economics (ABARE)
    • Bureau of Rural Sciences (BRS)
    • Rural Policy and Innovation
    • Fisheries and Forestry
    • Natural Resource Management

3.2       The Committee began the hearing by welcoming the new Departmental Secretary, Ms Joanna Hewitt. The Department drew to the Committee's attention to the transfer of the Plant Breeders Rights Office from the Department to IP Australia.[115] In addition to this, the Committee was informed that on 1 December 2004 Biosecurity Australia was established as a prescribed agency under the Financial Management and Accountability Act 1997. This translates to the agency remaining within the Department's portfolio, but for financial purposes it is considered a separate entity.[116]

3.3       The Department advised that they have made some minor structural changes to better manage the emergence and re-emergence of various disease threats such as avian influenza, BSE and foot-and-mouth disease. Furthermore, the Department sees a need to focus more attention on animal welfare issues, as well as technical issues related to the international trading environment. As a consequence, the government's chief vet will spend less time on the administrative and financial management of Product Integrity, Animal (including aquatic animal) and Plant Health (PIAPH) and the Executive Manager of PIAPH will handle these matters. This will allow the chief vet to work more closely with the Department's executive management team and provide leadership and high-level input on the aforementioned issues.[117]

3.4       The Department also noted that the responsibility of each of the Department's Deputy Secretaries has been rearranged.[118]

Management Services and Corporate Governance

3.5       The Committee inquired about the compensation for the Hewitt defective administration claim for the attempted export of sultana grapes to the UK in 1984. This matter has been routinely brought before the Committee at estimates hearings.[119] The Department informed the Committee that on 30 April 2004[120] the Hewitts accepted the government's offer of $7.649 million to settle the matter.[121] The total administrative costs relating to the matter have amounted to $185, 486. The Department considers the matter settled and no further action will be given to the Hewitt claim.[122]

3.6       The departmental saving of $1.2 million on the Tasmanian wheat freight subsidy scheme was also discussed. The Committee was informed that the saving reflected in the PAES was due to the scheme being transferred to the Department of Transport and Regional Services.[123]

Food and Agriculture

3.7       The Committee engaged the Department in a lengthy discussion on the progress of the Sugar Industry Reform Package. The Department informed the Committee that the process was currently at the stage where the second tranche of sustainability grants were overdue, but have been delayed. The second sustainability grant payment was due in January 2005, contingent on the government being satisfied that industry had undertaken agreed industry reforms, including the development of regional plans. These plans for reforming the industry region by region are to be developed by a number of regional advisory groups (RAGs), which are overseen by an industry oversight group (IOG) responsible for advising the Minister on the progress of the plans.[124]

3.8       The Committee questioned the delays in the payment of the $73 million second tranche of sustainability grants. The Department referred to the Minister's statement of 2 February 2005, in which he stated that the regional advisory groups' regional plans did not demonstrate sufficient evidence of industry reform against the government's criteria; advice which came to the Minister through the IOG.[125] The Department elaborated to say that, according to the IOG, each of the plans needed "more work".[126]

3.9       The Committee expressed concern that the regional advisory groups had been given a very difficult standard to reach in view of their voluntary and part time status, and their inexperience in contemplating bureaucratic guidelines. The Committee was advised that the RAGs were assisted by a secretariat within the Department to facilitate communication with the IOG and assist in understanding the issues involved. The Department further indicated that the IOG had provided specific advice to the regional groups as to how their reform plans could be improved to be deemed satisfactory.[127]

3.10   The Committee asked for copies of the regional plans, a request the Department took on notice given that the plans are subject to ministerial discretion.[128]

3.11   The Committee questioned the Department in relation to a recent evaluation of the Dairy Structural Adjustment Program. The evaluation was conducted by the South Australian Centre for Economics in the second half of 2003 and is available on the Department's website. The Department stated that:

the evaluation of the dairy package, DSAP and SDA, indicated that the package has been well implemented by the Dairy Adjustment Authority: that there was an almost 100 per cent uptake of the package by eligible entities, that it was progressing well and that generally the package had been used for adjustment assistance throughout the industry—to assist the industry to adjust to deregulation.[129]

The evaluation showed that farmers in Victoria and Tasmanian used the adjustment payments to improve productivity while this was less predominant in New South Wales and Queensland.[130] The Department explained the cause behind this could be that different strategies of adjustment are required in different regions.[131]

3.12             The Committee then discussed the eradication of citrus canker. They were informed that $5.5 million has been allocated to the emergency response program for citrus canker over the next three financial years. Within the program, national consultation and management arrangements have been undertaken through a committee on emergency plant pests. The national plan is managed by the Queensland government, however costs are shared between the Commonwealth and the States, with the Commonwealth paying 50 per cent and the States on a pro rata citrus production basis. The budget is endorsed through the Primary Industries Ministerial Council.[132] The Department stated that the funding deals only with the technical eradication of citrus canker, and does not include funding to affected growers.

3.13             Two assistance packages are on offer to growers affected by the citrus canker disease. The first is a Queensland government package which provides farmers within the plant quarantine area around Emerald with interest-free loans for up to two years.[133]

3.14             There is also a separate $1.5 million Commonwealth package - administered by Centrelink - which has two major components; income support and interest rate subsidies. The Department indicated that the Commonwealth assistance equates to up to $100, 000 for each affected farmer. Subsidies may be applied for against existing or new debt incurred from financial deductions related to the citrus canker disease, and the package is available to growers outside the quarantine area in Queensland who can show a reduction in the vicinity of 30 per cent due to citrus canker. Whilst the guidelines are still being finalised, a number has been made available publicly for inquiries about assistance available. The Department commented that it expects the majority of the funding to go towards interest rate subsidies.[134]

Biosecurity Australia

3.15   The Committee engaged the Department at length about the importation of fresh meat from within a country in which foot and mouth disease (FMD) is present, and a suspected outbreak had occurred. In describing the chronology of events relating to this incident, the Department informed the Committee that:

    • The imported meat was accepted under the policy of accepting red meat from zones declared by the World Organisation for Animal Health (OIE) as being foot and mouth free;
    • The consignment in question arrived in November 2004 and was comprised of half a tonne of Brazilian frozen beef trimmings. Of the 20 cartons, 13 were held in a cold store in Melbourne, five were distributed to individual smallgoods manufacturers and two to a processing plant in Wagga Wagga;
    • On 24 December 2004, Biosecurity Australia became aware of the report of an unconfirmed FMD case on a property in Brazil (on the border with Paraguay) within one of their FMD-free zones;
    • Import permits were immediately suspended, the 18 cartons that had not been opened were quarantined and precautionary measures applied to the two cartons opened and tested in Wagga Wagga and buried at the Wagga Wagga municipal tip. The policy allowing the imports was suspended pending a review;
    • On 7 January 2005 the Brazilian government advised Australian officials that the suspected outbreak was a false alarm;
    • The policy under which the imports arrived remains suspended and departmental officers will travel to Brazil to assess the effectiveness of FMD-free zones and the safety measures in place.[135]

3.16   The Committee expressed concern over a number of aspects of this incident. Particularly, the Committee questioned why Australia accepted the OIE defined zones when many other countries do not accept the risk associated with importing from countries not entirely FMD-free. The Department reiterated that the policy was under review, but that zoning provided advantages to Australian exporters unaffected by endemic diseases present in other regions.[136] The Committee notes that while zoning may be a fair proposition for minor diseases, FMD constitutes a catastrophic risk to Australia's beef industry and it is entirely reasonable for discretion to be applied.

3.17   Another concern was the absence of an import risk analysis to precede the decision to accept Brazilian beef from FMD-free zones, particularly given Australia's own lack of understanding of that country's internal controls. The Department stated that import permits could be issued on the basis of the available OIE evidence. They stressed that the original decision had been on the basis of OIE's auditing of Brazil's controls and that the initial raising of the alert demonstrated the efficacy of these controls.[137]

3.18   A discussion then ensued as to the burden of the cost of auditing the controls of countries exporting beef to Australia if OIE certification was deemed not to be an appropriate measure. The Department indicated that this would be a "hugely expensive" undertaking.[138]

3.19   The Committee also questioned how beef imported using one permit can be distributed as widely as this one was, rendering containment of an infected shipment difficult. The Department indicated that there was no restriction on the use or movement of the product once it had been imported.[139] The Committee is concerned that the meat entered the country legally but was disposed of at a commercial tip, prior to the notification of the suspected outbreak of foot and mouth disease. Given that the meat was disposed of prior to notification, had the outbreak been confirmed the outcome could have been catastrophic.

3.20   The Department also indicated to the Committee that Brazil is the only country with FMD from which we have received meat from an FMD free zone.[140]

3.21   The Committee went on to raise concerns about AQIS' consultation with Biosecurity Australia when assessing import permit applications. The Department explained to the Committee that middle level AQIS officers would, in the course of determining an import permit application, confirm with their Biosecurity Australia counterparts that any approval would be consistent with Biosecurity's policy on FMD-free zone imports.[141] The Committee is concerned that an application to import meat from a country with FMD would be handled at this level of the bureaucracy, without consultation with senior Biosecurity Australia officials.

Market Access

3.22   The Committee then moved to the issue of live animal export MOU's with a number of Middle Eastern countries. The Department advised that in December 2004 an MOU had been signed with the UAE, while an agreement with Kuwait, Saudi Arabia and Eritrea was imminent. Negotiations are continuing with Jordan, Syria, Qatar, Bahrain and Oman. When questioned on why agreements were not being sought with countries in regions other than the Middle East, the Department indicated that from a resources standpoint the region that had previously posed difficulties was being focussed on first.[142]

Product Integrity, Animal and Plant Health

3.23   The Committee inquired about $20 million to assists farmers with the implementation of the National Livestock Identification Scheme (NLIS). The Department indicated that the details of the expenditure had not been finalised but anticipated that it would help producers, livestock agents and saleyards with the uptake of the relevant technology.[143]

3.24   With regard to the Australian Animal Welfare Strategy, the Committee was informed that the implementation plan had not been completed due to a delay in receiving the necessary funding. Departmental officers indicated that the development of Australian live export standards was a greater priority with the funding available.[144]

3.25   The Committee then queried the Department on assistance to wool and sheepmeat producers following PETA's instigation of their anti-mulesing campaign. The Department stated that the government continued to provide matched funding to Australian Wool Innovation, who were investigating alternatives to mulesing. The Department stated that industry groups had been leading the response to PETA's campaign, and that industry had reported no significant impact on their markets.[145]

3.26   The Department further informed the Committee that they had received legal advice indicating that AWI were within their rights to use grower levy funds to fund legal action against PETA.[146]

3.27   The Committee sought information on the $505,000 proposed expenditure over the next two years for the future management plan for Ovine Johne's Disease (OJD). The Department explained that they also expected the states and industry to contribute funding to the plan. Under the new program the movement of sheep will be based on vendor declarations of risk, termed assurance based trading. This will comprise a national effort to move to risk based trading and away from state enforced regulatory zones. This will be complemented with the availability of vaccine and the use of such farming practices as pasture spelling and the running of weaners on spelled pasture.[147]

3.28   The Department indicated that the system was not an effort to eradicate OJD, rather to minimise the risk of contracting or spreading the disease. The Department further advised that no decision had yet been made as to whether the program's funding would continue beyond 2005-06, or whether there would be a successor program.[148]

3.29   The Committee also engaged the Department on the accountability and budgetary practices of the Australian Pesticides and Veterinary Medicines Authority (APVMA). The Department indicated that the APVMA's budget was set by their board of directors and the organisation was accountable to the parliament through the tabling of its annual report, approved by the parliamentary secretary. Officers explained that APVMA was struggling to match revenue to expenditure because it had been required to take on a broader range of functions and the drought had impacted on chemical sales, from which APVMA derives its revenue.[149]

Australian Quarantine and Inspection Service

3.30   The Committee inquired about the staff impact on the termination of the increased quarantine intervention and Nairn programs. The Department’s response was:

I think we answered those questions at the last hearings. We indicated that the amount of money that is involved in those lapsing programs accounts for something like 1,200 AQIS staff, but we then went on to explain that, while that was a direct translation, should those funds lapse, it would be up to the department to look at what its priorities were.[150]

The Department explained that all programs have a time period that will come to an end and decisions on program durability are examined on a regular basis. [151]

3.31   The Committee asked about the recall of wood and cane hampers, imported from China before Christmas in 2004, which were suspected of containing larvae from wood-boring beetles. Approximately 114,000 baskets were distributed through two chain stores amongst all the states. At the time of the hearing, 1,500 – 2,000 baskets have been returned through a voluntary recall of the product. However, consumers have also been instructed to dispose of the item by freezing it for 15 days or incineration. Consumers have been notified through two recalls, the first on 31 January, the second in early February. In addition to this signs have been placed in the two major retail outlets and there have been some 157 items in the media. The Department explained to the Committee that the larvae can not do any damage; it is the adult wood-boring beetles that are the risk. There is a strong possibility that many of the hampers will not be in an environment conducive for the larvae to mature. [152]

3.32   The Committee asked for its regular update on the export of Australian honey to New Zealand. The Department noted the recent receipt of the import risk analysis from New Zealand. Bisosecurity Australia and AQIS will assess the New Zealand IRA to see if export to New Zealand is viable. This is expected to be completed in the next couple of months.[153]

Australian Bureau of Agriculture and Resource Economics

3.33   The Committee requested the Department’s general outlook for world market trends for major rural commodities. The Department outlined that world economic growth was approximately 4.6 per cent in the 2004 calendar year. A figure above 4 per cent translates to a larger demand and a rise in commodity prices. Entering into 2005 there is uncertainty surrounding the United States direction and there has been talk of the impact of a triple deficit situation in the US. As a consequence there would be an expected easing of world economic growth, and hence commodity prices in Australia would ease also. The US would likely resume beef exports into Australia’s key North Asian markets which would ease the price of beef in the 2005-06 financial year. Reasonably flat prices are expected for the cereal and grain sector. Sugar prices have been slightly higher and this is expected to continue. Due to the trend in fashions, the demand for wool has decreased. Consequently, wool prices are expected to remain flat or even decline slightly. Dairy is doing well, particularly cheese, and an increase in the farm gate price for milk is expected. Small increases in the price of cotton are expected for this financial year while a moderate easing on the price of pork is expected for the 2005-06 financial year. A key to the country's export earnings, the Australian dollar, is expected to trade at 75c against the US dollar in 2004-05, up 4 cents on the previous financial year.[154]

3.34   The Committee was particularly interested in the effects of the ongoing drought on major rural commodities. The Department informed the Committee that as the continent of Australia is so large there is always likely to be a drought somewhere. Summer crop production forecasts indicate there will be 3.9 million tonnes, up 3.5 million tonnes from last year. The winter crops however, are expected to drop dramatically from the record 40.3 million tonnes in 2003-04 to 31.5 million tonnes in 2004-05.[155]

3.35   The Committee asked about the ABARE reports used in the Biofuels Capital Grants scheme. The Department informed the Committee that the reports would not be updated unless the contracting department, the Department of Industry, Tourism and Resources, requested. The Committee questioned the Department about the demand for alternative fuels when the price of crude oil is increasing. The Department stated that:

If those fuels can be produced competitively to compete with oil, then we would expect to see more of those fuels in the mix... as oil prices rise then it would appear to me prima facie that the industry actually becomes more competitive rather than less.[156]

Bureau of Rural Sciences

3.36   The Committee inquired about the $6 million funding over four years for the Centre of Excellence for Biosecurity Risk Analysis and Research. [157] BRS officers informed the Committee that they were tasked with development work for the centre just a week before the hearing. The plans to establish the centre include design, consulting with relevant stakeholders and identifying potential proponents to manage the centre. At this stage neither a physical location for the centre has been decided on, nor how much it will cost to get the centre up and running. However, $116,000 has been allocated in 2004-05 for the administration of the project by BRS. The Department's goal is to have the development plan for the centre completed by the commencement of the new financial year, and will therefore report further on the matter at the coming budget estimates.[158]

Rural Policy and Innovation

3.37   The Committee asked for an explanation for the reduction in appropriations of $111.13 million for drought related exceptional circumstances in 2004-05, a reduction in appropriations of $3.2 million for drought related interest relief and a $500,000 reduction for drought related interim support.[159] The explanation provided by the Department was that the appropriations are a reflection of farmers' actual take-up of drought assistant measures against the original budget estimates figures. [160]

3.38  The Committee then sought information as to why the Farm Help program had again been underspent. The Department indicated that they had anticipated an increased demand for the program as farmers moved from Exceptional Circumstances assistance to Farm Help, however this had not occurred. Officers suggested that the main reason for this was that there had been further extensions to EC areas. [161]

Fisheries and Forestry

3.39   The Department informed the Committee that the ABARE report on defining economic efficiency in the fishing industry was now complete and is with Australian Fisheries Management Authority (AFMA) before it will be finalised. The Department also stated that it contains recommendations on how the AFMA can better structure an approach to measure economic efficiency in the fishery industry. [162]

3.40   The Committee received an update on the National Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing. The plan for illegal, unreported and unregulated fishing (IUU) was developed by the Department in consultation with the states and industry. It provides a comprehensive analysis of Australia's problems with IUU fishing domestically and in the near high seas and is expected to direct fisheries agencies to help mitigate the problem. The plan is complete and currently being processed by the ministerial council before it is approved for release. The Department stated that the plan is considered a soft law document and enforcement will be on a voluntary basis. [163]

3.41   The Commonwealth fisheries review document was discussed. At the last estimates hearing the Committee was informed 34 of the 53 recommendations had been implemented.[164] Since then, a further three recommendations have been implemented. An additional two will be dealt with in the amendments to the Fisheries Management Act 1991 that will go through parliament in the autumn sitting. The recommendations that have been completed are as follows:

    • Outcome 18, National Fisheries Compliance Strategy;
    • Outcome 23, the recreational component of resource sharing; and
    • Outcome 49, the first Australian Fisheries and Seafood Forum.[165]

3.42   The Committee inquired about a variety of illegal fishing matters in the North of Australia. The Department outlined a major project over the course of last year was improving existing detention and apprehension arrangements. They reported that 107 Indonesian fishing vessels have been apprehended in Australian waters in the current financial year up to 20 January 2005. Of these vessels, there were 94 legislative forfeitures. The Committee discussed the Minister's announcement on 31 January 2005 of a new detention facility at Berrimah Jail (Darwin, NT) for illegal fishers. The facility was already established but is being modified to make it suitable for accommodating up to 250 detainees. The Committee was told that this project is funded in the Department of Immigration, Multicultural and Indigenous Affairs (DIMIA) budget. [166]

3.43   Currently, illegal fishers are detained and processed on their boats. However, they are transferred to alternate accommodation such as another boat, part of the Berrimah Jail or a watch-house on Thursday Island if their boat has sunk. Hygiene packs are now being provided for detained illegal fisherman and funding is being allocated for screening fisherman for tuberculosis on arrival. The Department advised that the average period of detention is around three weeks before repatriation. Further, a transit detention facility will be established and operated by AFMA on Horn Island.[167]

3.44   The Committee was informed that rapid progress on detention policy and facilities have been made in the last six months, allowing the Department to focus more attention on longer term policy and deterrence issues where progress had been less rapid.[168] The Department will continue to examine policy issues associated with Australia's bilateral marine relationship, capacity building, fisheries management and dealings with Indonesian fishing authorities in the long term. Possible deterrence measures include improving opportunities for alternative livelihoods in the communities where illegal fishing is stemming from, improving the Indonesian government's capacity to regulate fishing and ensuring consistent law enforcement efforts in Australia.[169]

3.45   The Committee was provided with an update from the previous budget estimates on the AusAID program working with Indonesian fisheries.[170] Phase one of the program has been completed, whereby senior Indonesian officials spent time with government officials for several weeks (with the AFMA and Coastwatch), learning how Australia manages fisheries. Phase two, where additional people will visit Australia from Indonesia to observe Australia's compliance programs, is yet to be completed. Delays have occurred, however, due to the affects of the Tsunami on the Indonesian fisheries department.[171]

3.46   The Department reported that it plans to introduce an identification system to identify repeat illegal fishing offenders and additional land based facilities such as police facilities and existing DIMIA detention centres will be examined. Additionally, boat disposal sites will be erected at each port; Broome, Darwin, Gove and in the Torres Strait on Horn Island.[172]

3.47   The Department also outlined that the planned changes to the management of illegal fishing problem will involve cooperation between the Department and DIMIA. They explained that the Department will continue to regulate the fisheries aspect of the issue, while DIMIA will take control of the process once illegal boats and their crews have been apprehended.[173] The legislation to give effect to these changes, the Border Protection Amendment Legislation Bill (Deterrence of Illegal Foreign Fishing) Bill 2005, is presently before the parliament and the subject of a bill inquiry being undertaken by the Committee.

3.48   The Committee then proceeded to discuss issues related to illegal fishing in the Southern Ocean. The Department informed the Committee that prior to the Oceaniac Viking's deployment in late November 2004, the Aurora Australis had been used for protecting southern fisheries in combination with a French patrol naval ship to cover some of the gaps. Funding has been allocated for the operation of the Oceanic Viking for two financial years.[174] The Committee was told that the budget for the operation for all the vessels was $47.8 million for the current financial year and $41.4 million for the coming year. [175]

3.49   The Committee inquired about recent proceedings of the 1998 Threat Abatement Plan for the Incidental Catch of Seabirds and whether the target of 0.05 birds per 1,000 hooks had been reached and the review completed. The Department responded that:

The review did take place but my understanding is that it is still continuing in some respects because of comments from the industry about the applicability of some of the research that was being undertaken to determine some seabird by-catch mitigation measures. It was focused on the sink rate of long lines in that fishery and whether increased sink rates might decrease bird catches. That TAP process is still running in terms of looking at two issues: the further modification of the gear that they use and night setting of lines rather than day setting. There have also been some recent decisions by the AFMA board to move the measurement line north and to require the use of Tory poles and night setting. Those are additional management measures as an interim.[176]

The review is being undertaken by the Threat Abatement Plan (TAP) Team, chaired by the Australian Antarctic Division. The Department expects the review to be further advanced by budget estimates hearings, however much of the progress is dependent on the TAP team.[177]

3.50   During the election campaign the government made commitments to identify boundaries adding over 170,000 hectares to Tasmanian forestry industry's current reserve system, and to advise on the social and economic impacts of protecting Tasmanian forests. At this stage, negotiations are still underway with the Tasmanian government to ensure that there would be no jobs lost due to reservation measures. Whilst possible boundaries have been discussed with Tasmanian officials the proposal is confidential in this initial stage.[178] When negotiations are finalised the Department will undertake a final assessment which will become part of their advice to the two governments on the proposed package.[179]

3.51   Of particular interest to the Committee was whether compensation will provided for timber harvesters under the RFA if allocated harvest areas are set aside for reservation. At this stage the Department could not provide an answer as negotiations are still underway.[180]

Natural Resource Management

3.52   Discussions began with the $20 million allocation, listed in the Portfolio Additional Estimates Statements over four years, to a new program for defeating the weed menace. The Department stated that the intention of the program was to supplement the work done by the Natural Heritage Trust on addressing weed problems. Furthermore:

You can spend a lot of money addressing the symptoms of weeds and spraying them, but you really want to put in place a strategic approach which gets to the causes of the problems or contains those that can be contained. The roll-out of this program will be very much informed by the work that is going on the revision of the National Weed Strategy.[181]

The Committee heard that it will have a major regional component to address the on ground weed problem, as well as a national component to communicate the need for weed infestations management and to obtain a consistent declaration of weeds from state to state. Matching expenditure for the program will be sought from the states.[182]

Senator the Hon. Bill Heffernan
Chair

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