Mr SOURIS: My question without notice is directed to the Minister for Agriculture, and Minister for Land and Water Conservation. Has the Minister assessed whether the Dairy Farmers Association proposal for a 3¢ a litre price support payment from the State Government will succeed in keeping dairy farmers viable in a deregulated environment, given that up to 50 per cent of the industry faces oblivion? How does that proposal compare with the package given to the timber industry by the Government?
Mr AMERY: At the outset may I say that I believe the House should acknowledge the concerns of the many dairy farmers from around New South Wales who demonstrated outside this Parliament today.
Mr Brogden: Did you address them?
Mr AMERY: Yes I did.
Mr SPEAKER: Order! I call the honourable member for Pittwater to order.
Mr AMERY: I convey to all members their concerns about the impact of the deregulation of the national dairy industry on 1 July. The question of the Leader of the National Party seeks to make a comparison between the timber industry package—a matter that was raised with a deputation I received after the demonstration today—and the impact of deregulation on dairy farmers. Honourable members should not in any way underestimate the impact of deregulation on individual dairy farmers. Whilst it is difficult to compare the impact of deregulation on a farmer with many thousands of milking cows to its impact on a farmer who may have only 80 to 100 cows, I asked the Dairy Corporation to provide me with some information about its impact on fresh milk quota prices that are being paid to the average dairy farmer in New South Wales. Interestingly, earlier the Leader of the National Party gave notice of a motion for urgent consideration that referred to the 1,800 dairy farmers of New South Wales. That number is correct.
Whilst I am about to quote figures that are said to indicate that the total milk production of Mr and Mrs Average Dairy Farmer in New South Wales is 708,000 litres, I acknowledge that such average figures do not always present the real picture. Dairy farmers in New South Wales will feel the effects of deregulation more than probably any dairy farmer in any other State because market milk—that is the fresh milk that most of us see every day—accounts for about 45.3 per cent of the average dairy farmer's price margin. That means that 54.7 per cent of the dairy farmer's milk goes to manufacturing product—in other words, yoghurt, cheese and so on. The average farm size in New South Wales is 175 hectares. The average number of milking cows per dairy farmer is 118. When one realises that the 53¢ fresh milk price will be reduced to the margins offered by dairy processors at the moment, one becomes very much aware of the impact such a price drop will have on the dairy farmer.
The average income of all dairy farmers—that is, from the largest farm to the many small farms—is $267,000. Therefore, if as a result of deregulation a farmer is offered only 35¢ per litre for his fresh milk—which as I said earlier accounts for 45.3 per cent of the average farmer's price margin—his income will be reduced by $59,815. If he is offered 30¢ a litre, his loss will be $75,851. If he is offered the price that has been referred to in the media in the past couple of weeks, that is 27¢ a litre, his loss in income will be $85,473.35. Honourable members should be very much aware of the impact of deregulation of the dairy industry. The interjections and questions from the National Party include, "Well, what are you going to do about it?" That is a fair question. Many farmers are asking the same question: You are in government, you are the Minister, what can you do about it?
As I have announced in the House before, it is frustratingly difficult for one State, with the probable exception of Victoria, to get a handle on and stop this deregulation process taking place. But let me now go on to talk about the question, "What can we do about it?" I spoke at the Dairy Farmers Association annual conference the other day. The association is in the same difficult position. Representatives of the association came to the Government some time ago, as I have told the House, saying, "We do not want to deregulate but, because Victoria is doing so, we want you to deregulate so that we can get the package." I will try to keep the answer as brief as I can, but it is a very involved and difficult issue to deal with. One thing we should all do is tell the dairy farmers of New South Wales the truth about what is going on. I will put a question to the House. Members who were at the rally today might be able to answer it. Is it the fact that the Leader of the National Party said that the New South Wales Government could refuse to deregulate the industry in New South Wales and still get the package?
Mr Souris: No, I did not say that.
Mr AMERY: Did anyone hear him say that in the House? The farmers sure did. That is what he said.
Mr Souris: You heard what I said. I did not say that. Don't lie.
Mr AMERY: Let me tell you that the last thing that these dairy farmers need at this very difficult time is to be told lies like that.
Mr SPEAKER: Order! On a number of recent occasions the Leader of the National Party has attempted to make a personal explanation while Ministers have been delivering answers. The standing orders provide that a member may make a personal explanation at an appropriate time, which in these circumstances is at the conclusion of question time. I ask the Leader of the National Party to control his enthusiasm. If he wishes to make a personal explanation I will make sufficient time available to him at the conclusion of question time to enable him to correct any statements made by the Minister.
Mr Fraser: Point of order: The Minister did put a question to the House. We were responding to the question that he asked.
Mr SPEAKER: Order! There is no point of order.
Mr AMERY: May I first pick up the interjection of the Leader of the National Party, who said "No". He made my point very clearly. The reality is that if New South Wales dairy farmers are to access the $1.7 billion package, then the unanimous message of this Parliament, based on the interjections of the Opposition, is that this State has to deregulate its dairy industry. I understand that the Leader of the National Party now agrees with that. A delegation of dairy farmers came to me today after the rally and asked the question that I posed earlier: You are in government and you are the Minister, what can you do about it? They gave some examples of the very difficult circumstances they are in.
One farmer who had 100 milking cows a few years ago had borrowed substantial amounts of money to bring his operation to 200 cows, to try to improve economies of scale, keep milk production costs down, and so on. Unfortunately, that farmer has something like a $750,000 debt to handle. Imagine the situation: massive drops in income of the type I have been talking about, a very high debt level, and the Federal industry assistance package, which will average out at about $198,000 per farmer. That is the situation we are in. Do we deregulate and take the package? The answer to that is yes, we have to deregulate to get the package. If I do not deregulate, we do not get the package for the farmers.
Federal backbenchers asked the Federal Minister and John Anderson for a special, last-minute meeting today to ask whether there can be any relaxation of the conditions on the States; that is, could the regulation process be deferred so that other packages may be negotiated, and so on? The answer by phone to my office today was no, they do not envisage anything from the Federal Minister. They do not envisage any delay in the implementation of the package. What can the New South Wales Government do about these terrible offers of 27¢ a litre and so on to farmers? As a State Government, we cannot do anything in a deregulated market.
There are only two governments in Australia that can do something about the situation of cheap Victorian milk coming into New South Wales. One is the Victorian Government, obviously, and it will not do anything because 89 per cent of that State's farmers voted to deregulate their industry. They see the potential for expansion of their industry by increasing their market share in Sydney and other capital cities around Australia, and selling their considerable overproduction of cheap milk. Victorian farmers produce their milk more cheaply. They do not have as high a dependency on quota as do New South Wales farmers, so it is to their commercial advantage to market their milk in other States. So we can disregard any suggestion that the Victorian Government would go against its own dairy industry and choose to deregulate.
The second government that can do something about milk pricing at a national level is, of course, the Federal Government. I spoke to the Federal Government today. All the concerns that were put to me by individual farmers at the meeting revolved around one particular point: the only way to stop the supermarkets and processors taking a higher profit share and giving farmers less is the continuation of some form of regulation. My point to them—which I am pleased to say they accepted—is that only regulation that will impact on Victoria is worth anything. I think all honourable members would agree with that. Basically, it comes back to the point that the Government made last week in the press, as did Country Labor members: If we are to have in place a regulation that will control the price of Victorian milk delivered from the farmers to the processors, there has to be a national floor price very similar to the floor price that the Whitlam Government brought in for the wool industry in about 1974 or 1975. There are no options for a State Government, acting alone, to control the flow of Victorian milk into the other States.
The last part of the question asked by the Leader of the National Party related to a forestry package. One must realise that the whole of the strategy behind his $80 million package is his thinking that there was a $80 million forestry package, so we should do the same for the dairy industry. That simplistic proposition was rejected by the dairy farmers themselves. Honourable members should bear in mind that there is about $345 million for New South Wales from the Federal package of $1.7 billion. The Leader of the National Party is saying that the solution is to add his suggested $80 million to the Federal package for distribution among the 1,800 farmers. If that was done, the average would be just over $40,000, with some of the very big producers who will stay in the industry probably getting $60,000 or $70,000 and many of the small of farmers, some of whom were demonstrating outside, getting $20,000 or $30,000. That is the National Party's solution to the long-term problems of the New South Wales dairy industry. In other words, pay off the Commodore and that will resolve all their problems. That, basically, is the National Party's idea of assisting the farmers.
The $80 million package proposed by the Opposition is a bit of a stunt because, quite frankly, it would not solve any of the dairy farmers' problems. As I said, what they need at the moment is for National Party members to tell them the truth. If they stick to that the Nationals will be all right. Today, the dairy farmers told me that the $1.7 billion package that has been agreed to really amounts to about two years' loss of income. That figure was given to me by a deputation I received later. The little additional sum that the Opposition talks about will have no impact on the long-term viability of the dairy farmers. I understand that this House will debate this matter further later in the day. I will be pleased to debate that matter with the Opposition.
Let us face it: the $80 million package given to relatively few timber mills and processors resulted in substantial assistance for the individuals concerned in that industry. As I said earlier, the Opposition would not pay that amount of money for the 1,800 dairy farmers around New South Wales. The Opposition has not really thought about any long-term solutions for the problems in the dairy industry in this State. If we want to maintain a regulated hold on this industry in the long term the Federal Government should introduce legislation which applies to every State, particularly Victoria, which is driving this reform at the moment. We could start with a floor price and introduce a step-down arrangement over a number of years to enable industry to adjust.