The impact of WSD on industries
Over the course of the inquiry, the committee received significant
evidence detailing the impact of WSD on various fisheries and aquaculture
businesses. WSD not only directly impacted prawn farmers, but wild catch and
commercial seafood and bait operations, and seafood importers and retailers.
This chapter considers the general concerns raised during the inquiry
about the financial and operational impact of WSD on prawn farmers. The impact
on the wild catch sector is also considered, along with the impact on importers.
The chapter outlines the financial assistance offered to affected industries,
and the ongoing discussions around the development of an aquatic Emergency
Animal Disease Response Agreement (EADRA).
The committee heard of the far‑reaching consequences of the WSD
outbreak, from a number of submitters and witnesses. The evidence showed that a
number of stakeholders hold serious concerns for the impacts of WSSV on various
It was suggested to the committee that the WSD incursion into Australia
was a 'highly predictable event'. A WSD incursion had been forecast for a
number of years by industry stakeholders, who have made repeated submissions to
government to express their concerns about raw prawn importation.
The Australian Recreational Fishing Foundation voiced concern about the
potential for white spot to spread to other crustacean species, such as crabs
and lobsters. The Foundation argued that the disease poses a significant threat
to the recreational fishing community and associated businesses, especially if
marine waterways were quarantined.
The NTSC raised similar concerns. The NTSC noted that the Northern
Territory mud crab industry was 'extremely concerned' over biosecurity risks,
given the susceptibility of mud crabs to WSSV and the fact that most seafood
product from the Northern Territory was live, fresh or frozen.
Dr Richard Smullen of the Ridley Corporation advised the committee of
the far‑reaching implications of the WSD outbreak. Dr Smullen stated
The Logan white spot infection has not only hit the prawn
farmers in the locality; it has severely impacted other farmers throughout
Australia and has reverberated through the supply chain, affecting freight companies,
consumable and hardware equipment supply companies, seafood wholesalers,
retailers and their communities, as well as Ridley as a feed company.
The Australian Council of Prawn Fisheries (ACPF) argued that the WSD
outbreak had caused substantial financial losses in a number of industry
sectors, and had undermined consumer confidence and the 'clean green'
reputation of Australian prawns. The ACPF also stated that the outbreak 'called
into question [the] Government's ability to keep Australian fisheries, farms
and the aquatic environment free from exotic foreign disease through the
current biosecurity regime'.
Impact on prawn farmers
The 2016 outbreak of WSD directly impacted seven prawn farms along the
Logan River in Queensland. The outbreak resulted in these farms losing all
stock, including hatchery and breeding stock, and suffering significant
The committee heard evidence from prawn farmers about the cost of
responding to the WSD outbreak, and the costs involved in changing farm
infrastructure to implement more stringent biosecurity controls.
A summary report into the economic impact of the WSD outbreak noted the
outbreak created 'complex social and economic impact on farmers, fishers, their
communities and supply chain partners'. This complexity would determine the
final financial impact of the outbreak. Further, the outbreak occurred at a
time when farmers were nearing the seasonal productivity peak for 2016‑17.
The report on the economic impact of the outbreak, by Ridge Partners,
was completed shortly after the outbreak. Final data on the economic impact is
still being compiled. The Ridge Partners report determined the following
financial impacts as a result of the outbreak:
2016-17 crop market value lost: $23.5 million;
biosecurity infrastructure upgrades to Logan River farms: $12.6
decommissioning farms for 18 months and establishing a care and
maintenance program: $11.9 million.
Overall, the report determined an estimated total loss of $49.5 million
to prawn farms, in addition to the potential permanent loss of 122 jobs.
Mr Daniel Rossmann of DS Farms advised the committee that the estimated
total cost of new disease vector controls on his prawn farm's 17 ponds and
inlet channels, would be in excess of $1 million. Mr Rossmann stated that
the farm ponds would require plastic lining, crab fencing and bird netting, in
addition to water treatment requiring ozone equipment and filtration systems. Mr
Rossmann advised that these steps were required to farm prawns once more. He
warned that even with those measures, a further WSD outbreak could end the
Mr Rossman further submitted that, following detection of white spot on
his Logan River prawn farm, he received advice that only those ponds testing
positive for white spot would be chlorinated, allowing uninfected ponds to be
harvested. However, those ponds ready for harvesting were also chlorinated,
resulting in a reduction of production from an expected 200 tonnes to 2 tonnes.
Evidence was received by the committee from prawn farmers regarding the
timeframes involved in recommencing farming and trade. Mr Stephen Parker,
Managing Director, Prawn Park, advised that:
are standing down for this year , and I think that that is a good idea,
because we are going to give nature and the environment a chance to sort some
of this out themselves. Therefore, just on the calendar side of things, by this
time next year let's assume and hope—I am a fairly bullish person—that the
northern farms have a great crop and everything works out well this year. They
then will have a second go by next year. We will have two winters behind us
here. Lower water temperatures, hopefully, might help. And then, in August
2018, those of us who have the money to put the infrastructure together to
change the way we farm—obviously water treatment and biosecurity are the things
we believe are necessary to do, to upgrade the farms to a certain extent—can go
in again and hopefully, again being bullish, get through. Then by February or
March of 2019 we would have our next crop.
you have three possible seasons and crops in this industry between now and
then. That would coincide with the two-year Biosecurity Queensland timing
regarding February and March of the last positives that have been found, and
assuming there are none found in between. Then: perfect—it is okay. I
personally believe that if anything happens to the detriment of that, or one of
the farms up north [Queensland] goes, then the industry is finished; it is
gone, all over. That is where we stand. That is the reality of it. That is the commercial
These timeframes were supported by evidence from QDAF. Its officers
stated that to meet OIE requirements for proof of freedom from the disease, it
would be two years before Australia could be declared free from WSD. Dr Jim
Thompson, Chief Biosecurity Officer, QDAF, explained that:
For Australia to prove freedom
from white spot, we are saying that from the last detection we need two years
of testing to say that we cannot find it. That does not mean farms cannot get
back into production. The risk we run is if farms go back into production and
white spot re-occurs—and it may be that all bets are off at that point, but
those decisions have to be made.
In reports about the WSD outbreak, it was noted that better biosecurity
outcomes would occur if the prawn farms infected with white spot remained
fallow until the 2018 season. This would allow more time for eradication of the
disease and for modifications to farms to achieve better biosecurity outcomes.
However, as noted in Chapter 1, remaining fallow would only be possible with
government financial assistance.
Impact on commercial operators
The committee heard evidence from commercial seafood operators in the
Logan River and Moreton Bay areas who were directly impacted by the WSD
outbreak, and by the movement control orders that were put in place after the
The Ridge Partners report examined the economic impact of the movement
control order between Caloundra and the NSW border on commercial wild catch
fisheries. The fisheries industries within the movement control order include,
among other things, bloodworms, yabbies and mud crabs. Ridge Partners estimated
the cost to the gross value of production as $20.5 million.
The National Seafood Industry Alliance (NSIA) stated that the detection
of white spot in November 2016 had resulted in 'an immediate loss of
livelihoods of several commercial fishers operating in the Logan River'.
Mr Eric Perez of QSIA advised that the commercial fishing industry was
'seriously impacted' by the WSD outbreak, with a loss of bait and live
crustacean markets in Queensland and other jurisdictions. Mr Perez argued on
behalf of the industry that during the response efforts to WSD it felt
'abandoned in the process', and that it was 'not getting help from any level of
As with the prawn farmers, it was argued by QSIA that when the outbreak
occurred, fishers were nearing the peak of the 2016-17 season and looking to
achieve optimum demand and prices for their product. Mr Perez noted that as of
June 2017, 291 businesses had been impacted by the WSD outbreak and the
movement control orders put in place. Mr Perez stated that:
They are businesses across the
crustacean fishery—so, crab, bugs, prawns and bloodworm, as well as
beachworm—that have been impacted by this. And it is the change to our markets
that we are not getting compensated for. There is a change to how we have to do
Ms Nicole Dymock of East Coast Live Bait Wholesalers advised that WSD
had 'effectively destroyed' the bloodworm businesses in the Moreton Bay area.
Local bloodworm diggers were out of work or on heavily reduced incomes, with
movement control orders preventing the sale of bloodworms to more lucrative
areas outside the control area. The bloodworm diggers were suffering
significant financial hardship and stress. Ms Dymock supported measures to stop
the spread of WSD, but argued for a level playing field for affected
Mr Ian Hamilton, an independent seafood retailer from south‑east
Queensland, argued that there had been a significant, negative impact on
consumer confidence in the wild catch sector because of white spot. Mr Hamilton
stated that some consumers had ceased buying prawns that were both farmed and
wild‑caught, due to a lack of confidence in the product. With the
presence of the disease and the restricted areas in which locally‑caught
product could be sold, Mr Hamilton advised that the wild catch sector had to
accept prices that were the lowest he had seen in 37 years in the retail
Mr Lionel Riesenweber, a crabber on the Logan River, advised the
committee that due to WSD, he was unable to access the Logan River at the most
profitable time of the year, from the start of December 2016 to 15 March 2017.
While product could be sold within the movement control area, Mr Riesenweber
advised that the product was receiving below‑average prices because it
was coming from the Logan River region.
Following the lifting of the import suspension in July 2017, the Moreton
Bay seafood industry argued for a 'level playing field' with importers. Local operators
were unable to sell their products outside of movement control areas, despite
the import of overseas product recommencing from early July. Retailers argued
that if the testing processes at the border were adequate for importers, they
should also be adequate for the movement of local product.
Dr Ben Diggles argued that the movement control orders put in place by
some jurisdictions after the WSD outbreak, particularly Western Australia and
South Australia, 'highlighted a remarkable inconsistency in what is considered
an Appropriate Level of Protection (ALOP) by state governments in Australia,
compared to federal governments current [pre‑import suspension] position
on imported prawn products'. Dr Diggles stated:
Having stricter controls requiring cooking of Australian
prawns moved domestically from WSSV positive regions, yet still allowing
uncooked imported prawns entry at the border from WSSV positive regions is an
extraordinary situation that highlights exactly where the real risks lie.
Impact on seafood importers and retailers
The Seafood Importers Association of Australasia (SIAA) argued that the
debate around the efficacy of border biosecurity controls after the outbreak
was 'extremely producer-centric' and unbalanced. The SIAA stated that prawn
aquaculture amounted to approximately 30 farms, whereas there were 40 000
foodservice businesses depending on imported prawns, with importers supplying
75 per cent or more of the seafood consumed in Australia.
SIAA submitted that the import suspension resulted in the loss of
several thousand tonnes of seafood product that would otherwise have been sold
in Australia. The six-month suspension was estimated by SIAA to cost
$383 million to Australian businesses, with consequent price rises for
SIAA highlighted the long, successful record of seafood importation into
Australia with its members providing a sufficient and constant supply of
seafood to Australia. It noted, moreover, the difficult conditions under which
its members operated, being in 'foreign countries, in foreign cultures and
under foreign laws'. SIAA questioned:
why the major biosecurity firewalls should not be more
focussed on the farms, or in the immediate vicinity of farms, rather than
applying conditions that add considerable costs to, restrict, and frequently
disrupt, these tens of thousands of Australian businesses, mostly located
thousands of kilometres from the nearest prawn farm.
It should be understood that Australian importers,
wholesalers and foodservice outlets have all been victims of this biosecurity
event, with many individual enterprises suffering financial losses measured in
tens of thousands of dollars. Many people in these sectors have lost their jobs
as a result. Although some importers have been implicated in breaches of
biosecurity regulations, the vast majority of these businesses were not at
fault. It should also be noted that when biosecurity costs are imposed on
importers, those costs are being imposed on the Australian community.
GSDA emphasised the need to support importers with a good record of
compliance with biosecurity measures. GSDA stated that:
Responsible importers who have continually shown to be
importing seafood with a good record of compliance from certified overseas
processors should qualify for recognition of their standing through lower
levels of inspection. Department resources could then be more heavily weighted
to importers who do not have this track record to ensure that less experienced
importers are complying with required standards.
In a submission to the inquiry, the Restaurant and
Catering Industry Association (RCA) called for a balance between biosecurity
needs and the interests of the tourism and hospitality industry. RCA raised
concerns about the import suspension of January 2017, as it had resulted in
'chronic shortages of supply and unsustainable price increases'. Regarding the
suspension, RCA also stated the need for 'greater advice, coordination and
communication with importers regarding the timing and results of quarantine and
The RCA detailed the economic impact of the import suspension on the
tourism and hospitality sector, based on increased costs and reduced sales. The
RCA stated that it:
remains deeply concerned about the significant economic
effects on café and restaurant businesses which are already experiencing over
100% increases in the price of prawns which, if absorbed as expected, will
result in a decrease in the average restaurant's net profit of 25.1%.
Assistance to farmers
Both the Queensland and federal governments have provided funding for
WSD response measures, and financial compensation for the affected farmers.
Queensland Government funding
QDAF advised that the WSD outbreak in the Logan River area led to the
'largest aquatic disease response in Queensland'. Between 1 December 2016 and
14 April 2017, approximately 160 QDAF staff were deployed to work on the
WSD response, with the Queensland Government providing $17.6 million in 2016‑17
for the operational response.
The funding in 2016‑17 was provided to:
treat infected properties to eradicate WSSV from prawn production
undertake bird mitigation to minimise the spread of the disease;
undertake WSSV surveillance in the wild environment along the
east coast of Queensland, to inform decisions around the likelihood of
complete a comprehensive communication strategy to inform about
the response and actions people should take to comply with regulations.
A further $9 million over the 2017‑18 and 2018‑19 financial
years has been made available to conduct proof of freedom surveillance and
other activities aimed at recommencing production on farms.
On 21 July 2017, the Queensland Minister for Agriculture and Fisheries, the
Hon Bill Byrne MP, announced the availability of $20 million to go towards
low interest loans for prawn farmers in the Logan and Albert River catchment
areas. This was in addition to $10 million already available in low
The loans, administered by the Queensland Rural and Industry Development
Authority, are aimed to help 'affected farmers get back on their feet by
providing the means for them to implement systems and practices that will help
their aquaculture enterprises to recover'. The White Spot Disease Concessional
Loans are available for up to $3 million, on a loan term of up to 20
years, with no fees or charges and low interest rates.
It was also hoped that the concessional loan scheme would help prawn
farmers to improve biosecurity controls, diversify their farming with other
marine species, and improve productivity and viability.
With regards to cost sharing, Mr Byrne stated that he 'refused to
countenance cost‑sharing because the Commonwealth engaged in a litany of
cover‑ups and secrecy on what its agents knew about positive samples of
white spot in retail prawns'.
In December 2016, Minister Byrne ruled out compensation for prawn
farmers and commercial fishers who operated in the Logan River. While QSIA had
requested financial assistance for prawn trawler operators affected by movement
control orders, the Minister stated that the control orders were a response to
a biosecurity incident. The Minister advised that 'there is no compensation
mechanism in legislation and we are not operating under a national deed' that
would provide financial assistance.
The Queensland Minister later advised, in June 2017, that commercial
fishers in the Moreton Bay area could seek financial assistance from the state government,
through the Primary Industry Productivity Enhancement Scheme program.
As detailed in the committee's interim report, the Commonwealth has
provided financial assistance in response to the WSD outbreak. Funding has
$1.74 million to assist Queensland and the industry respond to
the outbreak, including up to $400 000 in direct support to farmers;
$221 000 to the APFA to improve WSD management within the
$220 000 to QSIA to engage biosecurity liaison officers and
implement biosecurity programs, to better prepare the wild harvest industry.
The Hon Barnaby Joyce MP, Minister for Agriculture and Water Resources,
also advised that affected farmers may be eligible for the Farm Household
Allowance and Rural Financial Counselling Services.
In March 2017, Minister Joyce contacted QSIA to seek advice on how the Commonwealth
could assist the Association. In June 2017, the Minister again asked QSIA for
suggestions on what financial support would assist the organisation.
Following a Commonwealth funding announcement in May 2017, the
Queensland Government noted its concern that, prior to that point, it had
provided the majority of the resources and finance required to address the WSD
outbreak. While it welcomed the additional Commonwealth funding, the Queensland
Government argued that the funding should have been provided earlier, and
should not be considered as part of a cost‑sharing arrangement.
On 15 August 2017, Minister Joyce announced that contracts were being
finalised for a $20 million assistance package for six Logan River prawn
farms. The financial assistance would be used to reimburse costs for the
initial response to the WSD outbreak, including destroyed stock, and the costs
for a missed season of production. As part of the funding, up to
$4 million would be repaid by a levy on prawn farmers, once production had
DAWR confirmed to the committee that, as of early September 2017,
agreements under the $20 million assistance package had been provided to all
prawn farmers on the Logan River. Five agreements had been signed and payments
had commenced to those prawn farmers.
An Emergency Animal Disease Response Agreement (EADRA) is a contractual
agreement between the Commonwealth, state and territory governments, and
livestock industry groups, to prepare and respond to 66 categorised emergency
animal diseases. All parties under the EADRA enter into a cost‑sharing
arrangement, with contributions 'commensurate with their respective resource
base and status as a beneficiary of the response'. Animal Health Australia
(AHA) manages the EADRA.
The committee understands that while there is currently no EADRA for
aquatic industries, AHA has been progressing development of an aquatic EADRA
since October 2014.
A draft aquatic EADRA was due to be completed in 2018. However, it was brought
forward to the end of 2017. DAWR submitted that this was:
in part due to the number of recent aquatic disease outbreaks
and increasing need for certainty for governments and aquatic animal
industries, making the Aquatic Deed project a national priority. All levels of
government, all major aquaculture sectors and some fisheries sectors are
involved in developing the Aquatic Deed.
According to AHA, the draft aquatic EADRA proposes a 'three thirds' cost
sharing approach, with one third paid by the Commonwealth, one third by states
and territories (in aggregate) and one third by affected industries. As part of
the development of the agreement, an Aquatic Deed Working Group has been
looking at options for apportionment of the costs among affected industries.
As it currently stands, and in the absence of an aquatic EADRA, DAWR has
stated that in managing aquatic animal diseases, 'reimbursement of costs for
lost stock will not be available to affected parties'.
Concerns with the aquatic EADRA
QDAF advised the committee that 'the deed is very difficult to get to a
point of finalisation because some of the industries we work with are smaller
industries and they are concerned about the risks that might be there if they
sign up to a deed'.
The point was also made that unless an
industry scheme were operating where industry contributed to compensation,
there would be no coverage for farmer's costs such as loss of revenue and loss
A number of other submissions raised issues with an aquatic EADRA in
relation to the wild caught sector.
In its submission to the inquiry, QSIA argued that it was 'impossible'
for the fishing industry to develop an aquatic EADRA, due to the 'variation in
species, jurisdictions and geographical spread' of aquaculture industries.
Mr Eric Perez of QSIA argued that an
EADRA would not assist the wild harvest seafood sector in Queensland. He noted
that farmers, such as prawn farmers, have tenure over their land, whereas the
wild harvest sector does not own the sea waters where fishing occurs, having
instead a right to fish in a particular area. This made it difficult to repair
the aquatic environment and receive compensation in the event of a disease
incursion. Mr Perez argued that the industry contribution system under an EADRA
would therefore not be suitable for the wild harvest sector.
A similar view was put forward by Mr
Johnathon Davey of the NSIA. He raised concerns about how appropriate an
aquatic EADRA would be for the wild catch sector. Mr Davey stated that:
the deed is not applicable or acceptable to wild catch unless
it can be demonstrated that there is value and benefit in providing for lost
opportunity to fish and by providing compensation for reduced catches in
subsequent years due to disease incursion, noting that eradication and
containment is limited in the open aquatic environment.
However some submitters, such as the APFC, argued that it was in its
best interest to ensure that the wild catch prawn industry was represented in
discussions about the aquatic EADRA. This would allow the benefits and risks to
the wild catch sector to be fully explored. At the same time, the APFC
suggested that as the wild catch industry does not have any control over the
environment, it should not have to contribute financially in responding to
disease outbreaks out of its control.
The NAC has participated in the development of the aquatic EADRA and
acknowledged the benefits of it, including cost sharing, financial
compensation, and response management. However, the NAC raised similar concerns
to other submitters, arguing that development of the aquatic EADRA was a
challenging process as the terrestrial context does not readily apply to the
Mr Aaron Irving of the NAC urged caution over considering an aquatic
EADRA as a biosecurity platform. Mr Irving noted that any parties to the
aquatic EADRA would hope that its provisions would not be triggered, due to the
'successful functioning of our biosecurity system pre‑border, at the
border and inside Australia'.
Dr Len Stephens noted is his March 2017
report that there would be many benefits to the industry in developing an EADRA,
including the assistance of expert biosecurity groups and participation in the
management of Australia's biosecurity system. However, in relation to immediate
disease response funding, any cost sharing agreement would be 'limited by the
small size of the prawn farming industry'. An aquaculture EADRA would be
difficult to implement, given the industries are small, with a large potential
for loss from disease. Dr Stephens therefore argued that it would be consistent
with EADRA principles to cap the maximum industry repayment amount.
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