SUBJECTS: Dairy crisis, Labor’s Minimum Farm Gate Milk Price proposal, Live Sheep Exports, Ag Visa, agriculture portfolio.
BELINDA VARISCHETTI: We’ve got the Shadow spokesperson for Agriculture Joel Fitzgibbon who has been in Western Australia for I think a couple of days so a good opportunity to get Joel Fitzgibbon in the studio in the lead up to the next Federal Election and go through some of these issues. Joel Fitzgibbon welcome to the WA Country Hour studio
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY AND SHADOW MINISTER FOR RURAL AND REGIONAL AUSTRALIA: Great to be with you.
VARISCHETTI: Can we kick off with dairy? Because that has really just happened this morning. This $1 a litre milk appears to be over as the major retailers Coles and Aldi joining Woolworths in their decision what was it last month to end the $1 a litre milk. Do you think this goes far enough trying to change the fortunes of the dairy industry?
FITZGIBBON: Sadly it doesn’t and the decision by Coles and Aldi was somewhat inevitable. They were always going to follow Woolworths but I said many weeks ago that the problem in the dairy industry is that we have farmers making no money, processors making little money and the retailers choosing not to make money. What they have done now is decided to put their price up which will probably in part at least go to their bottom line. The question is what amount of that 10 cents, how much of the 10 cents will make its way back to the farmers? And in the absence of other government intervention, it’s not likely too much of it will.
VARISCHETTI: Now Labor is proposing a minimum floor price for milk and this floor price will vary cross Australia’s different dairy producing regions. How is it going to work?
FITZGIBBON: Well it will vary because every region is different in many ways in terms of climate, in terms of their export orientation, many regions are mainly focused on domestic milk supply. Others are manufacturing butter and other goods and indeed in the export market so you need to do it on a sub-regional basis. As complex of the value chain is, the proposition is a fairly simple one. We would have an independent entity like the ACCC for example determine the average cost of production in each of those regions and having done that then recommend and set a minimum farm gate price somewhere above the cost of production. What’s happening now of course is our dairy farmers are being paid at or below the cost of production and that is unsustainable so they will set the minimum price and that will give farmers certainty into the future and we need them to reinvest in their farm businesses to continue to drive productivity for example and if they know they have a guaranteed revenue over the next period then they will be more likely to do so. They won’t do that when they don’t even know if they are going to have a business in 12 months’ time.
VARISCHETTI: A lot of the dairy industry people I have been speaking to, the dairy farmers themselves are saying this isn’t going to work, this is just something, a bit of a thought bubble maybe it’s something to make dairy farmers feel good that things may change in the future. If you did win government then the ACCC would just knock it on the head.
FITZGIBBON: I think you will find those farm leadership groups are starting to change their tune and they are changing their opinion because out on the ground, and I have been out on the ground very regularly lately including down in the South West of Western Australia yesterday. Farmers are welcoming the fact that a senior politician is finally acknowledging that there is a problem and acknowledging the sector is unsustainable without some form of intervention and welcoming now the idea of having a minimum farm gate milk price.
VARISCHETTI: Now the industry are quite supportive of a mandatory code of conduct for the industry. That hasn’t quite been finalised yet but according to farmers we have spoken to in WA that would protect dairy farmers in a way they don’t have protection right now. Would you be supportive of that?
FITZGIBBON: Well the great disappointment here is the Labor Party has been calling for a mandatory code of conduct for three or four years. The government had to be dragged screaming to implement one or develop one and it only did so when the ACCC recommended that the industry have one. The problem is the government is now telling us that if they remain the government, the code won’t be in place until July 1, 2020.
VARISCHETTI: How soon will you implement it?
FITZGIBBON: Well we would have done it three years ago Belinda. That is the point. Nothing the retailers do on price will make any difference if you don’t have a code governing the market behaviour of the major, more powerful players like the processors. So we should have had a mandatory code of conduct some time ago. By the way the same government introduced one in 24 hours for the sugar industry yet it tells us that it needs two years to introduce one for the dairy sector so we need something on price which I’m proposing, we need a mandatory code to govern or manage the disproportion of power exercised by the processors.
VARISCHETTI: Agriculture Minister David Littleproud has been really vocal and strong on price discounting by the supermarkets. How will Labor protect farming families from powerful supermarket chains? As we just heard from Coles and Aldi saying even with the dollar milk that it’s an interim short term so it’s not quite a concrete proposition at this point.
FITZGIBBON: Exactly. The retailers have made it clear that this is an interim arrangement. See the lazy approach for a politician is just to attack Coles and Woolies and Aldi. I can do that, we can all do that. That’s very, very easy. It’s no cost and doesn’t take much thinking.
VARISCHETTI: Would you like to put the supermarkets under the spotlight? David Littleproud hasn’t ruled out a royal commission into the supermarkets for example and the power they have.
FITZGIBBON: Another lazy approach. We have had parliamentary inquiry after parliamentary inquiry into the power of the supermarkets without any real change.
VARISCHETTI: Alright what would you do?
FITZGIBBON: What I won’t do is sit back and do the lazy thing and populist thing and just bag Coles and Woolies which is what David Littleproud has been doing. Their move to temporarily increase the retail price was inevitable. I would do what I have said all along. A mandatory code of conduct managing the market power imbalance in the value chain and a minimum farm gate price so that we pay our farmers a fair return on their hard work and their investment.
VARISCHETTI: ABC WA, this is the Country Hour. Belinda Varischetti with you and live in the Country Hour studio is Joel Fitzgibbon, the Shadow Ag Minister in the studio who has been spending a couple of days in Western Australia so if you want to be part of the conversation or if you have a question to ask 0448922604 is the text. Let’s move on and talk about live export and the future of the industry and just late yesterday afternoon the review of ASEL the Australian Standards for the Export of Livestock being released with 49 recommendations. The Department of Agriculture is saying it’s going to accept all 49 of those recommendations including some of the highlights I guess of those recommendations – more space for livestock on ships and a heat stress risk assessment to be applied on all voyages that cross the equator. Anything in that final report that you don’t agree with?
FITZGIBBON: Can I saw first of all that this review is five years late. When Barnaby Joyce became the Minister he just kicked this review down the road and he said sent the clear signal to the exporters that they need not worry about the over sight of his department any longer. That’s how we developed this terrible culture in the industry which has lead us to the point where we find ourselves today. The ASEL Review, I haven’t had a chance, I’ve been on the road and been down in the South West here yesterday so haven’t had a chance to read it. It looks like it’s on message and looks like it is going to make recommendations consistent with the science as we know it. But we have five reviews in the last short period of time in the last 12 months and they only tell us what the science was already telling us before any of those reviews commenced.
VARISCHETTI: Would you have taken up all those 49 recommendations? Would you question any of those or take input from industry stakeholders or as the department is saying - we are just going to take all of them on?
FITZGIBBON: I haven’t read the report Belinda and I will very soon but if the recommendations are consistent with the science as it has been presented to us over the course of the last 12 months then we would welcome the recommendations. The science is telling us that it’s just not possible for the sector to continue while also meeting science based community expectations on animal welfare.
VARISCHETTI: John Cunnington is the Chairman of the West Australian Livestock Exporters Association and he has a question for you.
JOHN CUNNINGTON, CHAIRMAN OF WA LIVE EXPORTERS ASSOCIATION: Joel, how is a Labor Government going to create a stable and sustainable regulatory environment to give producers, suppliers, exporters and importers the confidence they need to continue to spend millions of dollars investing in infrastructure and investments that help to continually improve animal welfare both domestically and internationally?
VARISCHETTI: For example, the KLTT, the Kuwaiti importing company, spent around a hundred million dollars on a new abattoir over there, had planned to build new ships, improved technology on the ships for better airflow, even considering air-conditioning, why would it in that example, consider those investments to improve animal welfare when your plan is to transition out of the trade over five years?
FITZGIBBON: Belinda, I think John was talking about the agriculture sector more generally, he will correct me if I am wrong, but our plan of course will be to have a regulatory environment which allows the sector to thrive, to grow and to be sustainably profitable. While at the same time making sure all those within the sector are acting in a way which is consistent with community expectations, whether they be on sustainability, whether they be ethical expectations, whether they be expectations on animal welfare. As I have said regularly to the sectors, we really need to be ahead of the game here, for example, MLA decided to respond to concerns about greenhouse gas emissions from the ag sector by making a commitment to be greenhouse neutral by 2030. That is a really good example of the industry getting ahead of the game, recognising changing community expectations and preferences, and making sure they are listening to the customer and giving the customer what they need.
VARISCHETTI: Let’s have a listen to the President of the Pastoralists and Graziers Association, Tony Seabrook, because he thinks that you can be convinced to change your mind on the policy to phase out the industry, that’s the live sheep trade, in five years if you win government.
TONY SEABROOK, PRESIDENT PGA WA: Joel has been around a long time, he is a very sensible man, I get on very well with him, if we do have a change of government and he does end up being the Minister for Agriculture, I very much look forward to working with him, he is a very steady operator, I don’t believe we would be having the wild swings that we are in policy that we are having right now. Our current Minister, he just doesn’t seem to get it. And all we ever asked, right from the start, of him was to slow the process down, just digest the changes that have happened and react in the correct manner. I see Joel as being someone far more likely to take the approach of steady, steady, assess where we are and move forward slowly rather than come crashing through like our current Minister seems to want to. I have had a lot of conversations with Joel over a long period of time. He has never talked about shutting the trade down, he has talked about phasing it out over five years. And I would think that the industry could come forward with very positive results, results that no one can criticise, that the case could well be mounted to him over that five year period, that enough change had occurred for this trade to be acceptable to the broader community and that it might not need to be closed down.
VARISCHETTI: Tony Seabrook doing a little of your PR work by the sounds Joel Fitzgibbon. Is that true, would you reconsider phasing out the trade if the industry can prove itself?
FITZGIBBON: I will first return the favour, the compliment. Tony is a good guy and we have had extensive engagement, he has been very moderate and responsible in his advocacy and I appreciate that.
VARISCHETTI: He has come under fire from the State Agriculture Minister on several occasions though.
FITZGIBBON: He is sounding a touch optimistic there, let me make it clear Belinda, a Shorten Labor Government will phase out live sheep trade. It does not have a future.
VARISCHETTI: There is no window open?
FITZGIBBON: The science is telling us, all these reviews we have just had have reinforced my view and in fact left David Littleproud embarrassed now, facing the fact that none of the reviews gave him any opportunity to save the trade and what he has done now Belinda is kicked the issue down the road, beyond the election. Because he understands the problem, he understands what needs to be done, but he doesn’t want to be the Minister to make the decision.
VARISCHETTI: Well, if that is the case, if you are sticking to phasing out the live sheep trade over the next five years if you win government, what are you going to offer the industry in that transition, specifically, what will you offer to make that transition out of the industry?
FITZGIBBON: I can guarantee you what we won’t do and that is desert them and ignore them the way David Littleproud has done. David Littleproud has –
VARISCHETTI: What will you do?
FITZGIBBON: I will get to that, David Littleproud has effectively shut down the trade but without reaching out whatsoever to sheepmeat producers or anyone else along the value chain. So no assistance from Government whatsoever. I have had another conversation with Alannah MacTiernan, the State Minister here, just this morning and we recognise a lot of hard work will need to be done with the industry to help people make that transition. We will be there beside them.
VARISCHETTI: So OK that is the sheep, once the animal rights groups realise you are going to stick to that plan they will turn their attention to the cattle industry. How long before a Federal Labor Government says that is the end of the cattle trade, the live trade? Which is basically, if you draw a line from Geraldton to Townsville north, they rely on that industry.
FITZGIBBON: There is no basis for them to turn their thoughts to the live cattle industry. It has our support. It is a $1.3 billion industry, employing lots of people. We had to suspend that trade in 2011 to give us time to bring those Indonesian abattoirs up to standard –
VARISCHETTI: Will there be a knee-jerk reaction like that going forward from the Labor Party?
FITZGIBBON: No, I see no reason to be concerned about the live cattle trade. Since we put that supply chain assurance scheme in place, since we tidied up the Indonesian abattoirs, it has been able to demonstrate a capacity to operate profitably without raising any animal welfare concerns, or no concerns that would cause a government to feel the need to act, and on that basis, I have no intention of turning my attention to the live cattle trade. Other than, of course, to help it to further raise its profitability.
VARISCHETTI: Helen, on the text, says why are you concentrating on keeping the cattle trade going in the north but want to shut sheep producers’ businesses down?
FITZGIBBON: I know it is understandable to a casual observer to think of them being very similar, but they are very, very different trades. Sheep trade typically involves very, very long voyages into the hottest parts of the world, it has very, very significant stocking densities for example, in some of the worst heat in the globe. Whereas the cattle trade is a much different area of activity. Typically shorter voyages in different weather conditions. And it is absolutely in the interest of our cattle exporters to get those cattle to their destination in good health, so that they can be further fattened for domestic consumption in those other countries.
VARISCHETTI: It is 28 to 1, we have only got a couple more minutes left, so let’s get through a couple of quick, short, sharp Q and As. The Ag Visa, what would a Labor Government do as far as that? The National Farmers Federation been pushing for that for a very long time now, it does think it is the solution to the labour shortage problem in some of the sectors of ag. What would a Labor Government do?
FITZGIBBON: It is also a simple easy response. We will just have an Ag Visa. The problem is people in the sector cannot tell me exactly what an Ag Visa is yet. And we see another announcement from the Morrison Government today, it is another day, it is another announcement on this issue. It keeps announcing responses but it never does anything. What I have been doing of late is having a very, very close look at what they do in New Zealand. They are beating us at too many things at the moment and not just football. They have addressed this workforce issue very, very considerably. I think we can learn a lot from them. We need to remember, nothing Scott Morrison spoke of today went to the low skill job gaps we have in the sector.
VARISCHETTI: So would we have an Ag Visa?
FITZGIBBON: Hold it, just give me some time to further work through these issues Belinda. But I can assure you of one thing, and your listeners, we will do a much better job of addressing this problem than the Morrison and Turnbull Governments have done over the course of the last three years. The only contribution they have made is to introduce a Backpacker Tax, which made the situation worse.
VARISCHETTI: And finally, will you seek to be the Agriculture Minister?
FITZGIBBON: Absolutely, solid gold promise.
VARISCHETTI: And what if Ag wasn’t in the Cabinet?
FITZGIBBON: Agriculture will be in the Cabinet.
VARISCHETTI: Definitely in the Cabinet?
FITZGIBBON: I just had a conversation in a joint meeting between the WA Cabinet and Bill Shorten’s Shadow Cabinet and agriculture was very much on the agenda and very much part of that conversation. Bill Shorten, like Mark McGowan, recognises the importance of the sector. It will be in Cabinet and I will be the Cabinet Minister.
VARISCHETTI: Good to have you in the Country Hour studio. Thank you so much for popping in on your visit to Western Australia.
FITZGIBBON: A great pleasure.