Submitters expressed strong support for the bill and the proposal to introduce a per-head charge for the export of Australian dairy cattle. For example, the National Farmers Federation commented on the extensive consultation leading to the proposal, and recommended the bill be passed ‘without delay’.
While all submitters supported the imposition of the charge, a number also expressed views in relation to how the money would be allocated, and the importance of transparent reporting and administration.
The dairy cattle export industry
The dairy cattle export industry is valued at approximately $200 million per annum and, according to the Department of Agriculture, Water and Environment (the department), provides ‘an important alternate source of income for many Australian dairy farmers, which has positive flow on effects for rural and regional economies and communities’.
Australia dairy cattle is exported to China, Indonesia, Pakistan, Malaysia, Japan, and other countries.
According to Australian Dairy Farmers, around one third of dairy farmers chose to sell heifers to live export in 2018–19. A total of 92 456 Australian dairy heifers were exported during 2018–19, with a value of approximately $188 million. Australian Dairy Farmers noted that if the $6 per head levy proposed in the bill had been in place, this would have provided $554 736 in direct funding for the sector in 2018–19.
The vast majority of dairy cattle sold to export were from Victoria (approximately 90 000 heifers).
Highlighting the importance of research and development, the department submitted that:
The implementation of a $6 per head charge on exported dairy cattle will revitalise the R&D and marketing program for the industry. It will provide certainty in funding and allow the industry to plan into the future.
Directing the funds
Funds raised from the $6 per head charge would be spent on a combination of marketing, and research and development activities. The department submitted that the Australian Government matches research and development levy contributions ‘to a specific cap’, but does not match funding for marketing activities.
Australian Dairy Farmers reported that the Australian Livestock Exporters’ Council has proposed to direct $1 of the $6 per head to research and development funding, which would be matched by government funding, and the remaining $5 per head to marketing activities (which would be unmatched).
Australian Dairy Farmers and the Western Australian Farmers Federation’s Dairy Council submitted that ‘any funds raised [should] be spent in consultation with the dairy industry, in order to facilitate improvements in the dairy cattle export trade’.
The United Dairyfarmers of Victoria similarly called for funds to be spent in consultation with the dairy industry. However, it added that, due to the high percentage of dairy cattle exports originating from Victoria, ‘the major participating state bodies’ should participate in the allocation of funds from the levy, alongside the national dairy industry body.
The Australian Livestock Exporters’ Council submitted that:
The levy revenue will be invested by LiveCorp into the Dairy Cattle Export Program, delivering against strategic priorities to meet the needs of the dairy cattle export trade in areas of animal health and welfare, supply chain efficiency and regulatory performance, market access and stakeholder communications.
Australia Dairy Farmers proposed that the funds collected should be used to ensure animal welfare standards for exported heifers are able to meet the expectations of the Australian community, as well as those of farmers, to protect the industry going forward.
The department responded to questions around animal welfare, saying:
Animal welfare issues arise from time to time in the breeder trade. Typically these issues stem from the way in which animals adjust to new conditions and local managers/landholders adjust their farm management practices to suit larger imported cattle. Managing these issues is first and foremost the responsibility of farmers in the recipient country. Australia respects the sovereignty of trading partners and will not intervene without their permission.
Breeder cattle and the Export Assurance Supply Chain System (ESCAS)
Many categories of livestock that are exported from Australia are covered by the Export Assurance Supply Chain System (ESCAS). However, breeder cattle are excluded.
The ESCAS is an animal welfare, tracing and audit assurance system based on principles including that ‘the exporter has control of all supply chain arrangements for livestock transport, management and slaughter’.
The proposal to refer the bill to the committee suggested the inquiry should investigate including breeder cattle into the ESCAS.
In its submission, the department addressed this suggestion, submitting that expert inquiries have determined it is ‘unreasonable for exporters to be generally responsible for breeder livestock through to the point of death or to be responsible for the progeny of livestock exported from Australia’. This would require exporters to ‘follow’ livestock in foreign countries for timeframes as long as 10 years.
Administration and review
Submitters argued for transparent reporting on the use of the funds. For instance, Australian Dairy Farmers recommended information on the ‘progress and outcomes’ of the expenditure be ‘clearly articulated in LiveCorp’s annual report’.
In its original 2018 proposal for the establishment of the statutory charge, the Australian Livestock Exporters’ Council stated:
Payers of the Dairy Cattle Export Charge will be provided considerable ability to influence levy investment through; the LiveCorp company and membership structure; strategic and operational planning; operational approval and consultation processes and Annual General Meetings.
The Council also recommended that the statutory Dairy Cattle Export Charge ‘be reviewed within 7 years following its implementation’.
The bill would introduce a statutory export charge for dairy cattle, which are currently exempt from such charges under the Primary Industries (Customs) Charges Act 1999.
The committee is convinced of the need for the legislation, as the previous voluntary scheme faced problems with under-collection, leaving the industry without sufficient funds for research and development and marketing activities.
It is apparent that the Australian Livestock Exporters’ Council consulted widely with producers on their support for the imposition of a statutory charge, and that the legislation was developed with adequate consultation.
The committee is satisfied that a number of key industry stakeholders made submissions to this inquiry, and notes that all were in favour of the bill.
The committee is sympathetic to views expressed by submitters from the dairy industry who argue they should have a say in how the funds are spent. We specifically note the evidence provided by United Dairyfarmers of Victoria that a vast majority of exported heifers originate in that state.
The Australian Livestock Exporters’ Council needs to ensure that the major dairy farming industry bodies, including the Victorian body, have an ongoing say in how the funds are spent.
The committee notes the suggestion made by the Australian Livestock Exporters’ Council in 2018 that the charge be reviewed within seven years. The committee asks the department consider the merits of this proposal and plan accordingly.
The committee recommends the Senate pass the bill.