Published Monday, 15 January, 2007 at 10:02 AM
Minister for State Development, Employment and Industrial Relations
The Honourable John Mickel
NORTH QUEENSLAND DAIRY INDUSTRY LEFT HIGH AND DRY BY COMMONWEALTH
The Queensland Government is appealing to the Commonwealth Government to reconsider its refusal to match Queensland’s proposed assistance to the still-struggling Atherton area dairy industry.
The Acting Minister for Primary Industries and Fisheries, John Mickel, said today it was extremely disappointing the Commonwealth refused to match Queensland’s $1.25 million offer.
In a December 20 letter, the Commonwealth cited World Trade Organisation (WTO) issues as the reason for the refusal. The Commonwealth said the grant could impact on production or trade and, as such, was contrary to the WTO Agreement on Agriculture, which discourages domestic subsidies.
Mr Mickel said the Malanda dairy industry was still recovering from the effects of Cyclone Larry and government support was needed and warranted.
The reduction in protein quality in local feedstocks since the cyclone has forced the industry to seek more costly feedstocks, or face the consequences of drastic reductions in milk and cheese production.
Mr Mickel said the WTO agreement did not prevent supporting an industry hurt by a cyclone, especially considering the signatories had agreed to limit overall agricultural support, which Australia may still achieve regardless of helping Malanda.
“To date, the Commonwealth has worked in partnership with Queensland in sharing the costs involved in the recovery from this natural disaster. For them to argue now that they cannot help a Queensland industry because of a WTO agreement is a sham,” Mr Mickel said.
“It is Queensland’s view that, in comparison to the extensive price support and production subsidies provided to producers in other countries, and recent assistance measures to the other primary industries, the temporary provision of disaster recovery assistance worth a total of only $2.5 million is hardly significant from a trade perspective.
“But this amount would make a big difference to the dairy factory and its suppliers, who are still struggling to recover from a direct hit from a category five cyclone. $2.5 million is what is needed and that’s why our contribution is tied to a matching contribution from the Commonwealth.
“After waiting five months for the Commonwealth’s decision, the timing is now critical. Production decisions by dairy farmers, once implemented, cannot be easily changed, and could have long term impacts on the volume of milk supplied to the Malanda factory.”
As well as significant damage to their properties, Atherton area dairy producers had their local supplies of fodder devastated and no new supplies are expected for some months yet, forcing dairy farmers to seek fodder supplies from further afield. The current drought has caused some producers to source fodder from even greater distances, at significant cost. Some producers may decide to reduce milk production instead.
North Queensland dairy farmers are resilient and have been quite effective in their responses to the impacts of Cyclone Larry.
However, Mr Mickel said the inevitable downturn in milk production as a result of the impact of the Cyclone is placing the local cheese making facility at the Malanda dairy factory under pressure. If the cheese making operation were to close, the region would lose an integral part of one of its largest industries.
“The Queensland Government believes there is merit in the provision of some short term support for the local dairy factory to help it encourage producers to maintain supply until recovery of local milk production has occurred,” Mr Mickel said.
“But a matching contribution from the Australian Government is necessary to ensure that the funding provided would be meaningful, and consistent with the successful bipartisan approach to Cyclone Larry disaster recovery assistance to date.”
Media contact: Chris Brown 3224 7349 or Elouise Campion 3224 6784.
15 January 2007
The Acting Minister for Primary Industries and Fisheries, John Mickel, said today it was extremely disappointing the Commonwealth refused to match Queensland’s $1.25 million offer.
In a December 20 letter, the Commonwealth cited World Trade Organisation (WTO) issues as the reason for the refusal. The Commonwealth said the grant could impact on production or trade and, as such, was contrary to the WTO Agreement on Agriculture, which discourages domestic subsidies.
Mr Mickel said the Malanda dairy industry was still recovering from the effects of Cyclone Larry and government support was needed and warranted.
The reduction in protein quality in local feedstocks since the cyclone has forced the industry to seek more costly feedstocks, or face the consequences of drastic reductions in milk and cheese production.
Mr Mickel said the WTO agreement did not prevent supporting an industry hurt by a cyclone, especially considering the signatories had agreed to limit overall agricultural support, which Australia may still achieve regardless of helping Malanda.
“To date, the Commonwealth has worked in partnership with Queensland in sharing the costs involved in the recovery from this natural disaster. For them to argue now that they cannot help a Queensland industry because of a WTO agreement is a sham,” Mr Mickel said.
“It is Queensland’s view that, in comparison to the extensive price support and production subsidies provided to producers in other countries, and recent assistance measures to the other primary industries, the temporary provision of disaster recovery assistance worth a total of only $2.5 million is hardly significant from a trade perspective.
“But this amount would make a big difference to the dairy factory and its suppliers, who are still struggling to recover from a direct hit from a category five cyclone. $2.5 million is what is needed and that’s why our contribution is tied to a matching contribution from the Commonwealth.
“After waiting five months for the Commonwealth’s decision, the timing is now critical. Production decisions by dairy farmers, once implemented, cannot be easily changed, and could have long term impacts on the volume of milk supplied to the Malanda factory.”
As well as significant damage to their properties, Atherton area dairy producers had their local supplies of fodder devastated and no new supplies are expected for some months yet, forcing dairy farmers to seek fodder supplies from further afield. The current drought has caused some producers to source fodder from even greater distances, at significant cost. Some producers may decide to reduce milk production instead.
North Queensland dairy farmers are resilient and have been quite effective in their responses to the impacts of Cyclone Larry.
However, Mr Mickel said the inevitable downturn in milk production as a result of the impact of the Cyclone is placing the local cheese making facility at the Malanda dairy factory under pressure. If the cheese making operation were to close, the region would lose an integral part of one of its largest industries.
“The Queensland Government believes there is merit in the provision of some short term support for the local dairy factory to help it encourage producers to maintain supply until recovery of local milk production has occurred,” Mr Mickel said.
“But a matching contribution from the Australian Government is necessary to ensure that the funding provided would be meaningful, and consistent with the successful bipartisan approach to Cyclone Larry disaster recovery assistance to date.”
Media contact: Chris Brown 3224 7349 or Elouise Campion 3224 6784.
15 January 2007