Chapter 7.3

Value-adding in Agricultural Production

Chapter 7.3

Wool Industry
Cotton Industry
Wheat Industry
Sugar Industry
Tobacco Industry
Horticultural Industries
Wine Industry
Meat Industry
Pet Food Exports
Dairy Industry

Prospects for value-adding in specific industries

7.79 There have been a variety of trends evident over recent years that have had an impact on value-adding production, including:

These trends are likely to continue to impact on agricultural value-adding activities in Australia over the medium to long term.

7.80 In investigating the prospects for value-adding to Australia's agricultural production the Committee has selected the following industries to examine in some detail in relation to their value-adding prospects:

Wool industry

7.81 In the view of Department of Primary Industries and Energy new opportunities for wool processing in Australia lie primarily in early stage processing and production. Later stage processing is seen as being largely confined to specialist niche markets. [87] Dr Alistair Watson, an agricultural economist, was even more pessimistic than DPIE concerning the likelihood of Australia ever value-adding significantly to its wool production beyond the early processing stage. Dr Watson attributed his view to three factors:

7.82 Dr Alistair Watson was concerned whether Australia is able to process wool at a lower cost than other countries. He was of the view that Australia's output has to be exported as scoured wool or tops since later stages in the textile and clothing industries - yarns, fabric and apparel - are uncompetitive in Australia as indicated by the long standing protection given through tariffs and quotas [89]

7.83 Scouring is the essential first step in preparing Australian wool for consumption by the international textile industry. Overseas there is increasing pressure to reduce pollution related to the scouring processes. As a result of this situation it will become increasing likely scouring will have to be carried out in Australia. It has been asserted that Australia has the geographical capacity and population density to manage the environmental consequences of the large scale discharge of wool scour effluent at low cost. [90]

7.84 In October 1993 a working group on wool scouring within the Commonwealth Environment Protection Agency (CEPA) was formed to develop guidelines for wool scouring in Australia. The Committee understands that a draft of these guidelines was made available for public comment. The deadline for receipt of comment was the end of May 1996 with the guidelines expected to be finalised in early 1997. Once these guidelines are put in place they could serve to limit the working life of some mills now in operation, particularly those that have little or no control over the discharge of pollutants, and where additional investment to correct these shortcomings may not be warranted. [91]

7.85 Mrs Kay Dal Bon, Assistant Secretary with the Environment Standards Branch of the Environment Protection Agency, when commenting on wool scouring in Australia stated:

7.86 Later in her evidence Mrs Dal Bon agreed that Australia should not become a dumping ground for overseas wastes and that it should not be involved in value-adding that is going to create large areas of pollution. [93]

7.87 The production of wool tops has expanded from a low of just over 15 mkg (millions of kilograms) in the mid- 1970s to almost 40 mkg in 1992-93. The expected further expansion of combing capacity will take this figure to 80 mkg in 1997, more than 90 per cent of which will be exported. [94]

7.88 However, the long term potential for significant returns from the export of wool tops should not be overestimated. In its evidence to the inquiry the International Wool Secretariat painted a realistic picture of the prospects of value-adding to Australia's wool production. In its submission to the inquiry the International Wool Secretariat warned that there is a limited market for wool tops. According to the Secretariat world consumption of wool tops in 1991 was running at around 87 per cent of total capacity, with countries in Western and Eastern Europe and Asia all operating below potential maximum capacity. In its submission to the inquiry in March 1994 the IWS stated:

7.89 The IWS submission suggested that the rate of expansion in Australia's combing capacity would probably cause Australia to attempt to sell into traditional markets in Western Europe and Japan which may raise the questions of access if imports of part processed wool encounter opposition from processors already operating in these countries. [96]

7.90 The Secretariat stressed that there are some very widely held misconceptions about where Australia is competitive and where it is not. [97]Due to discrimination against processed wool in most of the major markets for Australian wool there is limited growth potential in these areas for the export of value-added wool. [98]

7.91 Although none of the world's major spinners have established in Australia the IWS was of the view that there are grounds for believing that Australia can be competitive in spinning since this activity is not labour intensive. However, the Secretariat warned that once you go beyond yarn, the situation changes quite fundamentally. [99]According to the IWS the weaving and knitting of wool fabrics into sweater type garments, where value-adding is high, takes two routes. The first route is the production of relatively low valued products where labour costs are important. China is the main participant in this area of low cost production. The other route involves the production of high fashion, high quality clothes. This market is dominated by Italy, Japan and Germany. As a result of this situation Mr John O'Connor, Director of Corporate Strategy with the International Wool Secretariat, in giving evidence to the inquiry, stressed that the IWS did not see a situation where Australia will be competitive in weaving and beyond stages. [100]

7.92 There is an ongoing trend in the world fibre markets to shift processing capacity away from wealthy countries, including Australia, to countries with low unit labour costs such as China, India and Pakistan. These countries have the highest growth rates in mill consumption while growth in processing wool has either stagnated or declined in wealthy developed countries. Japan is an example of a country where rising costs have resulted in a trend away from producing apparel to importing apparel. [101] With Australia's relatively high labour costs it is unrealistic to expect that Australia could become a major producer of wool apparel, particularly for the export market.

Value-adding to wool overseas

7.93 Increases in the prices received for processed wool must outweigh the costs of the materials and services used to produce the product. It has been argued that each stage of wool processing being located where it is most cost effective serves the best interests of Australia's wool industry. As stated in the publication Wool: Structuring for Global Realities :

7.94 The argument has been raised that further processing of wool in Australia simply generates unproductive competition between raw and processed product in overseas markets, with unknown implications for the value of greasy wool. [103]

7.95 Mr Anthony Botsman of the Professional Resource Group expressed doubts concerning the extent to which value-adding to wool production can be carried out in Australia. He told the Committee that value-adding was not necessarily best done in Australia. Mr Botsman went on to state:

7.95 7.96 Later in evidence to the inquiry Mr Botsman questioned the desirability of trying to duplicate in Australia the value-adding activities then being carried out overseas. Mr Botsman noted that:

Export markets

7.97 In 1994 Australia supplied about 70 per cent of the international trade in wool compared to 64 per cent in the early 1980s. Australia's dominance was even greater in apparel wools where it provided over 70 per cent of traded products, exported primarily in greasy form for processing overseas. By 1994, on average Australia exported more than 90 per cent of its wool production in raw or semi-processed form. During the ten years to 1994 the sale of wool overseas had returned a total of $37.7 billion in export income to Australia. [106]

7.98 A major problem facing any attempt to increase the value-added content of Australian wool through further processing is access to markets. According to the IWS there had been a significant growth in early stage processing of wool in Australia in recent years, largely as a result of the perception that there are opportunities for selling large quantities of semi-processed wool as well as raw wool to China. [107]However, during 12 months to April 1995 China imposed a tariff of 15 per cent on wool tops and 10 per cent on raw wool. At the same time India, another growth market for Australia, considered imposing a 50 tariff on tops and a 25 per cent tariff on raw wool. According to IWS these limitations would greatly reduce our ability in Australia to undertake early stage processing of our clip and to export tops competitively. [108]

Conclusions

7.99 The Committee is of the view that Australia should be aware of the danger of becoming a dumping ground for polluting industries. As time goes on it is likely that Australia may be pressured into carrying out increased wool scouring by companies in countries where this practice has become less acceptable. The Committee sees considerable advantages for Australia if wool scouring systems can be operated in an environmentally acceptable manner.

7.100 Regrettably the Committee has concluded that Australia may struggle to become competitive in the weaving of wool and the production of wool garments. It would appear to be more productive for the industry to concentrate on what it does best, namely the production of the world's best wool.

7.101 As noted earlier the Committee expressed the belief that it is essential for Australia to be flexible in marketing its value-added products overseas. It is in line with this belief that the Committee accepts the suggestion, that in relation to wool, most of the more complex value-adding processes appear to be more competitively carried out overseas.

Cotton industry

7.102 Ms Mary Scott Gilbert, Manager of Marketing and Communications with the Colly Farms Cotton group of companies noted in February 1996 that five trends have emerged which may be of importance to the future marketing of the Australian cotton crop. [109] These trends are:

7.103 Ms Gilbert went on to state:

7.104 Total Australian cotton exports to Japan, Korea, Hong Kong and Taiwan are predicted to decline by 361 000 tonnes by the year 2000-2001. Despite approximately 453 000 additional tonnes of cotton being exported to Thailand, Indonesia , Malaysia, China and the Philippines these increases will not be sufficient to take up the potential export volume from Australia. According to Ms Gilbert if Australia's maintains its current market share of cotton in these countries only 278 000 tonnes of the total 562 000 tonnes available for export will be consumed by our key target markets. [112] Ms Gilbert went on to state that:

7.105 It was expected that the shift in cotton processing away from the industrialised countries towards countries with lower labour costs such as Brazil, Indonesia and Thailand would continue in the medium term. [114]

7.106 The Australian Cotton Foundation told the Committee that although Australia cannot compete with low wage manufacturing countries in the final assembly of a product such as cotton shirts Australia can compete in the area of secondary processing, such as the spinning of raw cotton into textiles. [115] The Cotton Foundation based this view on the use of technology that would reduce the number and therefore the cost of workers employed in milling cotton in Australia. [116]

7.107 During his evidence to the inquiry Mr Henry Pepper, a consultant with the Australian Cotton Foundation, claimed that if the cotton and wool currently produced in Australia were exported as a textile as a opposed to raw fibre, we conservatively believe that there could be an increase as much as five-fold in the gross value of the cotton and wool produced. [117]According to Mr Pepper these exports could have been worth $25 billion in 1992-93 values which would have eliminated Australia's then $15 billion current account deficit. [118]

7.108 Despite the optimism of Mr Pepper concerning the ability of Australia to produce and export textiles to Asia due to our proven ability to supply quality on time he admitted that he had no knowledge of how tariffs in overseas countries would affect such exports. [119]

Wheat industry

7.109 In its submission DPIE noted that the export of bread dough, noodles, cake and biscuit pre-mixes presented considerable export potential for Australia. The Department of Primary Industries and Energy also saw considerable scope for Australia in its marketing activities to capitalise on its reputation to as a supplier of clean grain. [120]

Sugar industry

7.110 It had been predicted that the world market for white sugar would expand by about 2 per cent a year during the remainder of the 1990s. [121] In 1994 the Australian Bureau of Agricultural and Resource Economics suggested that if Australia became involved in the export of white sugar the premium paid for white-raw sugar would contract while the raw sugar price would increase. According to ABARE the Australian raw sugar industry would benefit from a relatively small shift into the refining of Australian raw sugar for export. The Australian Bureau of Agricultural and Resource Economics claimed that:

7.111 In February 1996 the Bureau claimed that white sugar's current price premium over raw sugar was expected to weaken over the medium term as a result of recent expansion of world refining facilities. [123]

7.112 CSR does not have an optimistic view concerning the prospects of Australia increasing its exports of refined white sugar. CSR advised the Committee that Australia has a relative competitive advantage in exporting raw sugar compared to the export of white sugar. [124] Mr Peter Frawley, Executive General Manager for Sugar with CSR, told the Committee that Australia was primarily an exporter of raw sugar instead of refined sugar because:

7.113 The greatest potential market for Australian sugar is Asia where consumption per person is rising in line with increasing standards of living. [126]

7.114 As a result of changes to the European Union's sugar regime on 1 July 1995 ABARE estimated that the Australian sugar industry would increase its earnings from export of between $10 million and $40 million a year. The extent of such gains depends on whether reductions in tariffs or other tariff equivalents lead to lower domestic prices in overseas countries and therefore increased imports. As a result of the GATT agreement tariffs on both raw and refined sugar were reduced in Japan during 1994. It has been suggested that Japan could become an importer of white sugar following rationalisation of the refining industry in coming years. Such developments could be of benefit to Australia's sugar exporters. [127]

7.115 Despite these improved opportunities for Australian sugar exports ABARE was of the view that the sugar industry was not expected to benefit significantly from the GATT agreement. According to ABARE there are unlikely to be any major changes to the domestic sugar policies regarding market access and domestic support. [128]

7.116 Japan has been a particularly difficult country to export refined sugar into. Mr Macarthur-Stanham, Manager of Special Projects with CSR, told the inquiry that in Japan you cannot even get in the front door with your value added products and you are forced to rely on your raw material. [129]

Ethanol production

7.117 The production of alcohol from sugar cane presents a significant opportunity for value adding in the sugar industry with Brazil providing a model that Australia could learn from. Brazil is the world's largest producer of sugarcane producing about 225 million tons per year. Sixty five per cent of this production is used to produce alcohol. In 1993-94 11.2 billion litres of alcohol were produced in Brazil with a large proportion of this being used to produce ethanol. Ethanol is blended with 78 per cent gasoline to produce a fuel used in cars and trucks. Brazil's alcohol production represents the equivalent of nearly 200 000 barrels of gasoline a day which in turn represents about 20 per cent of total fuel consumption in Brazil's transport sector. The use of ethanol saves Brazil about $2 billion a year in foreign exchange. It has also been estimated that the Brazilian Alcohol Program has created 500 000 jobs or about 65 per cent of the total jobs in the sugar cane industry in rural areas. [130]

7.118 Brazil was the first country in the world to totally eliminate the mixture of lead in gasoline. This was possible because the use of ethanol significantly increased the octane level of the blended gasoline and alcohol fuel making the addition of lead unnecessary. [131]

7.119 In its submission to the inquiry the Australian Cotton Foundation drew the Committee's attention to the difficulties Australia has experience in getting its ethanol industry up and running. According to the Foundation the confusing number of government instrumentalities overseeing ethanol processing has altered market signals and confused potential investors. [132] The Cotton Foundation told the Committee that:

Conclusions and recommendation

7.120 The production of alcohol from sugar appears to the Committee to offer a significant opportunity for value-adding. The Committee appreciates that the production of ethanol is a complex operation and that at times its economic and social benefits have been overestimated. Nevertheless, the Committee is of the view that every possible encouragement should be given to the production and use of ethanol alcohol. The Committee recommends that the Commonwealth Government give substance to this encouragement by:

Tobacco industry

7.121 Cigarettes are exported from Australia but volumes are currently small but increasing. Philip Morris Limited has exported cigarettes at a compound annual rate of 37.9 per cent for the three years to 1994. The company estimated that in 1995 it would have a favourable balance of trade in cigarettes of 4:1 with net exports of around a billion cigarettes with a sales value of approximately $26 million. [134]

7.122 At present tobacco is brought in from Japan and Taiwan for re-processing and then exported back to these countries. In 1995 Philip Morris Limited was working on the possibility of blending some Australian grown tobacco with this imported tobacco during processing before it was exported. In May 1995 to Mr Scott Operations Director for Philip Morris Limited stated:

7.123 The Asian market provides the best prospect for the export of Australia's manufactured cigarettes. It was estimated that cigarette consumption in this market will increase at the rate of two per cent annually. [136]However, in evidence to the inquiry Mr John Scott, stated that the export opportunities we are availing ourselves of right now are in the Middle East and eastern Europe. [137]

7.124 During his evidence to the inquiry Mr Scott agreed that Philip Morris Limited' parent company could prevent it from entering a particular market. However, Mr Scott stressed that because Philip Morris Limited in Australia was considered to meet world's best practice it was in a strong position to bid for business overseas within the multinational organisation. [138]

7.125 Philip Morris Limited argued that Australian tobacco producers cannot take advantage of potential export opportunities until the quality and standard of local leaf production can match overseas producers at competitive prices. As of April 1995 Australian tobacco leaf is approximately 50 per cent more expensive than comparable leaf from major producing countries. [139]

7.126 Australia currently produces filler tobacco that does not substantially impact on the taste profile of cigarettes. Lower labour cost countries can supply this type of tobacco which therefore places them in superior competitive positions compared to Australian tobacco producers. [140]

7.127 Philip Morris Limited was of the view that the potential for Australian tobacco growers to be competitive would be significantly enhanced if they moved from producing tobacco in the lower priced filler end of the market to producing for the mid level, semi-aromatic sector. This sector would provide higher prices for growers. [141] According to Philip Morris Limited:

7.128 Later in its submission Philip Morris Limited argued that the export of Australian made cigarettes offered the best opportunity for maintaining a prosperous tobacco industry in this country with flow on benefits to the Australian economy. The company stated that the best opportunity for Australian tobacco growers to participate in exports is through the inclusion of their leaf in value added manufactured cigarettes and semi-processed leaf. [143]

7.129 Past government support for the tobacco industry has been viewed as detrimental to the industry in the long run. Philip Morris Limited told the Committee that government schemes have encouraged manufacturers to use 57 per cent locally grown tobacco leaf, irrespective of quality and price. According to Philip Morris Limited:

7.130 Philip Morris Limited welcomed the January 1995 termination of the Tobacco Industry Stabilisation Plan (TISP) and the Local Leaf Content Scheme (LLCS). The company saw this termination as having the potential to dramatically enhance the productive capacity of an important agricultural sector and contribute significantly to the nation's economic well-being. [145] Philip Morris Limited argued that:

Conclusions and recommendation

7.131 The issue of value-adding in the tobacco industry and any support that should be provided by governments to this industry is a controversial subject.

7.132 Given the health dangers related to tobacco consumption the question arises whether governments should be encouraging value-adding in this industry and supporting the export of tobacco overseas where its use may lead to medical problems in a number of consumers? This is not an easy question to answer. It is perplexing that Australian governments are financing campaigns to curtail tobacco consumption in Australia while at the same time encouraging value-adding in the industry. [147]

7.133 The Committee accepts that tobacco use will continue in Australia and overseas for the foreseeable future and if Australian producers and processors do not supply tobacco other countries will. Nevertheless, the Committee considers that any expenditure by governments to support the production of tobacco has the potential of being viewed as providing a double standard. Given the limited amount of government funds available to support value-adding in Australia the Committee recommends that no funds or assistance should be provided to the tobacco industry, except assistance for growers to leave the industry.

Horticultural industries

7.134 Mr Brian Carroll of the Australian Vegetable and Potato Growers Federation in February 1996 set out a number of factors which have impacted on horticultural produce consumption patterns. These changes in consumption patterns will have a continuing impact on value-adding in Australia's horticultural industry. Factors affecting trends, both in Australia and internationally, in the consumption horticultural products include:

7.135 In this section the Committee has chosen to comment on the prospects for both fresh and processed horticultural products. The prospects for wine, which is a horticultural product, is also examined in this section.

Fresh and processed agricultural products

7.136 The economic development of Australia's horticultural industries, involved in producing either fresh or processed products, depends on two main factors:

7.137 In order to service increased domestic consumption and increased exports of fresh and processed horticultural products the gross value of production will need to increase to approximately $5 billion by the year 2000. [150]

7.138 Australia's exports of fresh and processed horticultural products are likely to increase in value to approximately $2 billion by the year 2000. The major destinations for Australian horticultural produce will be the countries in North and South East Asia and the Pacific. Smaller levels of exports will continue to be made to opportunity and niche markets in Europe and North America. [151]

7.139 The Committee was told that at as of 1995 99 per cent of fresh vegetables were marketed as loose product. However, in Europe 13 per cent of fresh vegetables were then marketed as value-added. This figure is estimated to reach 20 per cent by the year 2000. In the United States in 1995 value-added packaged vegetables total six per cent of the market and this figure is expected to grow to 15 per cent by the year 2000. [152]These figures indicate that there is a promising market for Australia's value-added vegetable producers.

7.140 In evidence to the inquiry Mr Garry Goucher of the National Farmers' Federation stated that the General Manager of Woolworths, Mr Reg Clairs, had expressed the view that Asian countries were moving directly from raw wet market sales to high quality food items ready for cooking in the home sold through supermarkets. [153]

7.141 The view has been expressed that the large scale export of horticultural products will require the development of large businesses able to brand product, reliably supply, maintain a quality product and promote. [154]

7.142 A number of trends in international food marketing have been detected that could have an impact on value-adding to Australia's horticultural production. These trends include:

Wine industry

7.143 Australia's wine exports are expected to be the major contributing factor to the growth of Australian wine production and sales over the medium term. Domestic consumption of wine was expected to increase marginally to just over 316 million litres in 1995-96 Domestic wine consumption was predicted to increase moderately to 355 million litres between 1993-94 and 1999-2000. [156]

7.144 Exports of Australian have been projected to increase by 63 per cent to 213 million litres in the year 2000. [157]If these predictions are correct Australian will be exporting about 38 per cent of its wine production in the year 2000. It has also been predicted that the volume of wine exports will increase by about 114 per cent from 1995-96 levels to reach 289 million litres in the year 2000-01, representing an increase of 17 per cent compared to 1995-96. That would represent a real value at that time of about $787 million. [158]

7.145 The Australian Bureau of Agricultural and Resource Economics noted a significant advantage enjoyed by Australian wines on the domestic and export markets, namely:

7.146 Prospects for the wine industry look to be bright. The industry appears to be responding to developing consumption patterns, both in Australia and overseas. For example, wineries appear to be prepared to meet the increasing demand for premium wines, specifically red wines. The demand for premium red wines was expected to increase by 27 per cent over the 1993-94 to 1996-97 period. The demand for premium white wines was predicted to increase by 22 per cent over the same period. [160] It is expected that higher average returns from wine exports will accompany an increase in export volumes over the medium term as premium wines make up a greater proportion of export wine. [161]

7.147 However, there are dangers on the horizon that could impact on Australia's ability to be competitive in the international wine market place, as ABARE warned:

7.148 ABARE advised in 1996 that:

The Bureau went on to warn:

Continued exports to Australia's current major export destinations will not be sufficient to absorb the projected increase in wine grape supply over the next five years without an increase in the competitive position of Australian wine. [164]

Meat industry

7.149 The Department of Primary Industries and Energy expressed the view that the major opportunities for value-adding in the meat and livestock industries centre on improving the operational efficiency of existing meat processing works along with investment in new capacity and technology. Increasing the skills of workers, as well as changing some work practices, were also seen as important elements in improving value-adding in the meat industry. [165]

7.150 The Department of Primary Industries and Energy considered that the development of new products to meet market demand, such as convenient foods, lean meat and speciality meals represented opportunities for value-adding in the industry. [166]

7.151 The Australian Meat and Livestock Corporation suggested that opportunities for value-adding in the meat and livestock industries can be grouped into the following areas:

7.152 In the following section the export prospects for two important value-adding sectors of the meat industry are discussed, namely beef and pet food.

Beef exports

7.153 The export of beef is essential to the well being of the Australian beef industry. The General Manager of Sandalwood Feedlot in Queensland has commented that:

It is unrealistic to expect the domestic market to drive (beef) industry growth. Export markets hold the key to our success. [168]

7.154 Fast growing South East Asian economies have the potential to significantly increase their level of beef imports. According to estimates made by the Centre for International Economics (CIE) if the APEC ideal of zero tariffs is attained this could benefit the Australian meat industry to the tune of at least A$1 690 million. [169]

7.155 Improvements in access to both the Japanese and Korean markets has provided the Australian beef industry with opportunities to expand beef and veal exports to North Asia. Australia is the major supplier of beef to Japan. [170]In 1994-95 Australia had about 53 per cent of the Japanese beef import market. However, this figure was expected to decline to about 49 per cent in 1995-96. [171]

7.156 The Australian Meat and Livestock Corporation attributes Australia's increased exports of beef into the Japanese market to three main factors:

7.157 The growth in exports to Asia has led to the development of new production systems in Australia including a substantial feedlot industry. The Committee understands that the number of cattle on feed was less than 100 000 head in 1985. [173] A survey by the Australian Meat and Livestock Corporation and the Australian Lot Feeders' Association indicated that overall feedlot capacity was 56 per cent in the December quarter of 1995. The survey predicted that the number of Australian cattle on feed will increase by around 8 per cent to 499 058 head during the three months ending March 1996. [174]

7.158 Beef exports to the Asian market have changed over recent years with more grain fed and more chilled grain finished beef being exported than in the past. Grain fed beef exports to Japan have increased from 48 000 tonnes in 1991 to 132 000 tonnes in 1994. The Australian Meat and Livestock Corporation advised the Committee that:

7.159 These developments have resulted in Australian producers and processors obtaining a higher return for their beef exports. [176] Australia exports of beef and veal to Japan reached 322 000 tonnes in 1994-95 which was a seven per cent increase on 1993-93 levels. [177] Australian grain fed beef was expected to contribute to half this growth. [178]During this same period the United States export of beef to Japan increased by 19 per cent. [179]

7.160 The United States has increased its exports of beef at a much faster rate than Australia in recent years. Mr Kevin Roberts claimed that the US beef industry has a very strong export focus, is extremely price competitive, has achieved good integration of government and industry market development activities and has a well established and respected beef grading system. [180]

7.161 With the reduced availability of cattle as a result of herd rebuilding in Australia, export growth of beef and veal to Japan is expected to be subdued until the second half of 1996. However, Australian exports to Japan are expected to recover by 1997, reaching a projected 340 000 tonnes for the financial year 1996-97 which is approximately six per cent up on 1994-95 levels. By the year 2001 it is predicted that Australia will export 414 000 tonnes (shipped weight) of beef to Japan, representing 43 per cent of Australia's beef exports. [181]

7.162 The Australian beef industry has attempted to meet the changing tastes of consumers. For example, to meet the Japanese requirement for a more even distribution of fat through their meat Australian beef producers are leaving their cattle on feedlots for longer periods, for up to 300 days. [182]Mr Russ Reynolds of ABARE argued that:

7.163 Australia's experience in scientific beef production offers an additional area for export income. The Beef Improvement Association of Australia suggested that Australia's expertise in techniques for genetic engineering and implantations could be marketed overseas. [184]

7.164 Despite the generally optimistic picture painted of Australia's beef industry, during the inquiry there was a note of caution raised by some witnesses.

7.165 The Australian Meat and Livestock Corporation noted that in the past the ability of Australia to export more highly processed meat products into some countries has been limited due to a desire in these countries to carry out value-adding activities themselves. For example, Australia was in the process of obtaining contracts to supply meat patties to McDonald's in Taiwan and Korea when they were told by officials in these countries that:

7.166 Early in its evidence to the inquiry the AMLC advised that the Corporation envisaged a bright future for Australia's meat and livestock industries. [186]However, later in his evidence Dr Standen of the Corporation presented a less optimistic view of the situation the Australian meat industry was in when he commented:

7.167 Dr Standen went on to reflect that the value of Australia's cattle exports:

Conclusions and recommendation

7.168 To meet the increasing competition from the United States and New Zealand to the export of Australian beef, particularly into Asia, the Committee is of the view that Australia must concentrate on producing beef through feedlots to meet market requirements. The Committee accepts that feedlots provide a significant means of drought proofing the beef industry. [189]

Pet food exports

7.169 The Pet Food Manufacturers Association of Australia was of the view that the brightest growth prospects for manufactured pet food were in exports. However, the likelihood of continuing to export pet food successfully is dependent on Australian manufacturers continuing to produce a quality product. According to the Association:

7.170 As noted earlier it is regrettable that the Pet Food Manufacturers Association declined to appear before the Committee to give evidence during the inquiry. The Committee would have welcomed an elaboration on the views expressed by the Association in its submission and additional information it could possibly have supplied during a public hearing.

Dairy industry

7.171 As a result of the massive restructuring that has taken place in the Australian dairy industry since 1994 has resulted in it becoming internationally competitive, the industry appears to have a bright future. This optimism is reflected in the first line of the Australian Dairy Industry Commission's submission to the inquiry where it stated that there are excellent growth prospects and a positive export outlook for the Australian dairy industry. [191]

7.172 Over recent years there has been a continuing rationalisation of Australian dairy manufacturers in the form of mergers and take overs by larger companies. The Australian Bureau of Agricultural and Resource Economics expressed the view in 1994 that:

Export markets

7.173 It is accepted in the Australian dairy industry that its continued growth is dependent on returns from exports. [193] About a third of Australia's milk production is exported as processed products, such as skimmed milk powder and cheese. [194] By 1996-97 it is expected that the majority of Australia's milk production will be sold on international markets, up from a third of all milk in 1990. The volume and value of dairy exports have almost doubled over the last five years, up by 80 per cent in volume and 85 per cent in value. [195]

7.174 Consumer pack products are among the most processed form of dairy product and they are steadily increasing as a proportion of exports. The packs currently represent about 25 per cent by volume of Australian dairy exports. [196]

7.175 The Australian Dairy Industry Council dismissed suggestions that bulk exports of Australian dairy exports was just dumb commodity driven exporting. According to the Council:

7.176 Murray Goulburn Cooperative told the inquiry that it produced skim milk powder with 30 or 40 specifications. [198] The Cooperative went on to state we believe that we add value for each of those by differentiating in that manner. [199]

7.177 The Cooperative is concentrating on developing specialist bulk milk powder for particular markets and uses, for example, the Cooperative has developed a milk powder for the bakery industry called Dairy Bake. This concentration on bulk milk powder is the strategy Murray Goulburn Cooperative will follow in the future. According to Mr McLean of the Cooperative this is the way that Murray Goulburn is going in terms of value adding as opposed to more of the consumer packed items. [200]

7.178 The Asian-Pacific market accounts for more than 80 per cent of Australia's dairy exports. [201]Australia holds approximately a third of the market in this region for dairy products. [202] The success of Australia in this market can be appreciated from the fact that Australia is now the largest supplier of natural cheese in the Japanese market. [203] The Committee was told that in terms of free markets, Japan is the largest market in the world, elsewhere quotas on dairy imports normally apply. United Milk Tasmania told the inquiry in September 1995 that it only had a quota of 700 tonnes of cheese into the whole of Europe and a quota of 1 000 tonnes into the United States. As of September 1995 UMT was selling some 5000 tonnes of cheese to Japan through the Australian Dairy Corporation. [204]

7.179 Despite the obvious rewards of exporting value-added products into the Asian market there are significant costs involved. The Committee was told that to develop from start-up a new consumer pack product in the greater Tokyo market you are looking at expenditures on the marketing of that product alone which will account for more than 50 per cent of your revenues. [205]

7.180 The Australian Dairy Corporation has taken up equity in processing operations in Thailand, Indonesia and the Philippines. The rational behind this move was to maintain long term access to these markets for Australian milk and manufactured milk products. [206] According to Mr Peter Gallagher of the Australian Dairy Industry Council, although these markets are tightly controlled, by exporting technology and investment to these countries Australian dairy producers have secured markets in these countries. Butter oil and milk powder are exported to plants in these countries and recombined to produce fresh milk using Australian technology. [207]

7.181 In his evidence to the inquiry Mr McLean of the Murray Goulburn Cooperative set out what he saw as a realistic picture of the prospects for value-adding in the Australian dairy industry, particularly in relation to exports. According to Mr McLean:

Mr McLean went on to suggested that:

7.182 It is expected that the market opportunities for Australia's dairy exports to Asia will increase in the medium term due to the greater consumption of dairy products in the region as a result of:

Conclusions

7.183 The Australian dairy industry presents an outstanding example of an industry that has shown flexibility in adapting to the requirements of overseas markets. The Committee congratulates the Australian Dairy Corporation on taking the initiative in acquiring equity in dairy processing plants in Asia in an effort to assure access to these markets for Australian milk and milk products. This strategy is an example of the foresight and flexibility necessary to achieve success, or at least the chance of success, in export markets for Australian value-adding agricultural based industries.

7.184 The Committee accepts the view of ABARE that Australia will improve its access to overseas markets for its dairy products as a result of the implementation of the Uruguay Round Agreement. It is the conclusion of ABARE, accepted by the Committee, that Australia will increase its share of world trade in dairy products due to a lessening of exports from the United States and Europe. This lessening will result from increased domestic consumption in these countries along with a reduction in subsidised dairy exports. [211]

Footnotes

[86] See International Agribusiness Trends and Their Implications for Australia, a discussion paper prepared for the Primary and Allied Industries Council, Canberra, 1989, p. iii.

[87] Evidence, DPIE, p. 892.

[88] Dr Alistair Watson, Further Processing of Agricultural Productions in Australia: Some Economic Issues, Research Paper Number 5, 14 December, 1993, Parliamentary Research Service , Department of the Parliamentary Library, pp. 17-18.

[89] Dr Alistair Watson, Further Processing of Agricultural Productions in Australia: Some Economic Issues, Research Paper Number 5, 14 December, 1993, Parliamentary Research Service , Department of the Parliamentary Library, pp. 15-16.

[90] Evidence, IWS, p. 157; Wool: Structuring for Global Realities, Report of the Wool Industry Review Committee, Canberra, August 1993, p. 64.

[91] Evidence, IWS, p. 156.

[92] Evidence, DEST, p. 1039.

[93] Evidence, DEST, p. 1940.

[94] Evidence, IWS, p. 162.

[95] Evidence, IWS, p. 166.

[96] Evidence, IWS, p. 166.

[97] Evidence, IWS, p. 184

[98] Evidence, IWS, p. 184.

[99] Evidence, IWS, p. 185.

[100] Evidence, IWS, p. 185; see also Evidence, Merino Gold Limited, p. 278.

[101] T. Goesch and others, Outlook for Wool, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 179, 181.

[102] Wool: Structuring for Global Realities, Report of the Wool Industry Review Committee, Canberra, August 1993, p. 66.

[103] Maximising the Return: Adding Value to Australian Wool: Report of the Wool Processing Task Force, Department of Primary Industries and Energy, Canberra, 1993, p. 13.

[104] Evidence, Professional Resource Group, p. 200.

[105] Evidence, Professional Resource Group, p. 207.

[106] Evidence, IWS, p. 139; Maximising the Return: Adding Value to Australian Wool: Report of the Wool Processing Task Force, Department of Primary Industries and Energy, Canberra, 1993, pp. 5, 6; Wool: Structuring for Global Realities, Report of the Wool Industry Review Committee, Canberra, August 1993, p. 48

[107] Evidence, IWS, p. 177.

[108] Evidence, IWS, p. 177. For additional information on tariffs see T. Goesch and others, Outlook for Wool, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 181

[109] Mary Scott, Future Export Markets for Australian Cotton, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 348.

[110] Mary Scott, Future Export Markets for Australian Cotton, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 348.

[111] Mary Scott, Future Export Markets for Australian Cotton, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 353.

[112] Mary Scott, Future Export Markets for Australian Cotton, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 352.

[113] Mary Scott, Future Export Markets for Australian Cotton, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 352.

[114] M. Forester and others, Outlook for Cotton, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE p. 134

[115] Evidence, Australian Cotton Foundation Ltd., p. 436.

[116] Evidence, Australian Cotton Foundation Ltd., p. 438.

[117] Evidence, Australian Cotton Foundation Ltd., p. 438.

[118] Evidence, Australian Cotton Foundation Ltd., p. 438.

[119] Evidence, Australian Cotton Foundation Ltd., p. 442.

[120] Evidence, DPIE, p. 893.

[121] R. Van Hilst and P. Connell, Developments in the World Sugar Market, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 111.

[122] R. Van Hilst and P. Connell, Developments in the World Sugar Market, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 114.

[123] S. Landlow, Outlook for Sugar, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 423.

[124] During 1993-94 Australia produced approximately 4 300 Kt of sugar of which approximately 3 455 Kt were exported almost totally in the form of raw sugar, see Commodity Statistical Bulletin 1994, ABARE, Canberra, 1994, pp. 214, 221.

[125] Evidence, CSR, pp. 454-456.

[126] R. Van Hilst and P. Connell, Developments in the World Sugar Market, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 109.

[127] R. Van Hilst and P. Connell, Developments in the World Sugar Market, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 112.

[128] R. Van Hilst and P. Connell, Developments in the World Sugar Market, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 112.

[129] Evidence, CSR, p. 456.

[130] Roberto de Moura Campos, Future Directions of the Alcohol Program and Sugar in Brazil, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, pp. 115-116; see also S. Ladlow, Outlook for Sugar, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 422-423.

[131] Roberto de Moura Campos, Future Directions of the Alcohol Program and Sugar in Brazil, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 116.

[132] Submission, Philip Morris Ltd, p. 2.

[133] Submission, Philip Morris Ltd, p. 2.

[134] Evidence, Philip Morris Ltd, pp. 645,662

[135] Evidence, Philip Morris Ltd, pp. 667-668.

[136] Evidence, Philip Morris Ltd, p. 645.

[137] Evidence, Philip Morris Ltd, pp. 673-674.

[138] Evidence, Philip Morris Ltd, p. 672

[139] Evidence, Philip Morris Ltd, p. 640.

[140] Evidence, Philip Morris Ltd, pp. 639-640

[141] Evidence, Philip Morris Ltd, p. 644.

[142] Evidence, Philip Morris Ltd, p. 644

[143] Evidence, Philip Morris Ltd, p. 645.

[144] Evidence, Philip Morris Ltd, p. 642.

[145] Evidence, Philip Morris Ltd, p. 639.

[146] Evidence, Philip Morris Ltd, p. 639.

[147] See again Evidence, Philip Morris Ltd, p. 639.

[148] Mr Brian Carroll, Emerging Horticultural Exports, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 392-393.

[149] Department of Primary Industries and Energy, International Agribusiness Trends and Their Implications for Australia, a discussion paper prepared for the Primary and Allied Industries Council, Canberra, 1989, p. 48.

[150] Horticultural Task Force, Strategies for Growth in Australian Horticulture, Canberra, February 1994, p. iii.

[151] Horticultural Task Force, Strategies for Growth in Australian Horticulture, Canberra, February 1994, p. ii. Mr Geoffrey Quinn, a postgraduate student at the University of New England, in evidence to the inquiry expressed reservation concerning the importance of niche markets. He told the inquiry:

Niche marketing is a good and useful part of a market process but it only markets some product; it does not market a lot of product. I do not think that the bulk of Australian agricultural produce or primary produce lends itself to niche marketing.

Evidence, Mr Geoffrey Quinn, p. 510; see also Mr Brian Carroll, Emerging Horticultural Exports, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 392-393

[152] Evidence, Vegco Limited, p. 259.

[153] Evidence, NFF, p. 1010.

[154] Department of Primary Industries and Energy, International Agribusiness Trends and Their Implications for Australia, a discussion paper prepared for the Primary and Allied Industries Council, Canberra, 1989, p. 49.

[155] Malcolm Irving, Horticulture-International Competitiveness Prospects for Australian Horticulture, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 154 and John Pendrigh, Wider Horticultural Policy Issues, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 162.

[156] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE pp. 273-274, T. Stanford and others, Outlook for Wine Grapes and Dried Vine Fruit, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 358.

[157] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE p. 274.

[158] T. Stanford and others, Outlook for Wine Grapes and Dried Vine Fruit, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 361.

[159] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE p. 274. For a summary of Australia's performance in various export markets see L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE pp 274- 276.

[160] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE p. 277.

[161] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE p. 279.

[162] L. Stanford and others, Outlook for Wine Grapes; Outlook 95, Vol. 2, Agriculture: paper delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995, organised by ABARE p. 274.

[163] T. Stanford and others, Outlook for Wine Grapes and Dried Vine Fruit, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 362.

[164] T. Stanford and others, Outlook for Wine Grapes and Dried Vine Fruit, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 363.

[165] Evidence, DPIE, p. 892.

[166] Evidence, DPIE, p. 892.

[167] Evidence, AMLC, pp. 315-318.

[168] Kevin Roberts, Producing to Meet the Market, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 228.

[169] Dr Bruce Standen, Significance of APEC for Australian Agriculture, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 50.

[170] C. Collimore and others, Outlook for Australian Beef and Veal, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 261. For information on likely developments in the Korean market see D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 209.

[171] D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 210.

[172] Evidence, AMLC, pp. 325-326.

[173] Evidence, AMLC, p. 333; see also C. Collimore and others, Outlook for Australian Beef and Veal, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 262.

[174] D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 206-207.

[175] Evidence, AMLC, p. 335.

[176] C. Collimore and others, Outlook for Australian Beef and Veal, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, pp. 261, 263.

[177] D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 209.

[178] C. Collimore and others, Outlook for Australian Beef and Veal, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 262; see also Dr Bruce Standen, Significance of APEC for Australian Agriculture, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 49.

[179] D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 209; see also John Kerin, The Australian Beef and Sheep Meat Industries - Future Challenges, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 218.

[180] Kevin Roberts, Producing to Meet the Market, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 229.

[181] D. Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 209-210.

[182] Florence Chong, Trading Policies: Trading Costs of Value-adding, the Australian newspaper, 16 June 1993, p. 29.

[183] C. Collimore and others, Outlook for Australian Beef and Veal, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 263. For information on other markets for beef in Korea and other Asian countries see ibid, pp. 263-264.

[184] Evidence, BIA, p. 92.

[185] Evidence, AMLC, p. 341.

[186] Evidence, AMLC, p. 328.

[187] Evidence, AMLC, p. 345.

[188] Evidence, AMLC, p. 345

[189] See Kevin Roberts, Producing to Meet the Market, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 229.

[190] Submission, PFMAA, p. 5.

[191] Evidence, Australian Dairy Industry Council, p. 106.

[192] J. Bills and others, Outlook for the Australian Dairy Industry, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 239.

[193] J. Bills and others, Outlook for the Australian Dairy Industry, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, p. 231; see also T. Gleeson and others, Outlook for the Dairy Industry, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p.255.

[194] Florence Chong, Trading Policies: Trading Costs of Value-adding, the Australian newspaper, 16 June 1993, p. 29.

[195] Evidence, Australian Dairy Industry Council, p. 107.

[196] Evidence, Australian Dairy Industry Council, p. 107. See chart tilted Consumer Pack Exports to Selected Countries for an indication of the dramatic increase in the export of this product that has taken place since 1992, Evidence, Australian Dairy Industry Council, p. 107.

[197] Evidence, Australian Dairy Industry Council, p. 128.

[198] Evidence, Murray Goulburn Cooperative Company Limited, p. 248.

[199] Evidence, Murray Goulburn Cooperative Company Limited, p. 248.

[200] Evidence, Murray Goulburn Cooperative Company Limited, p. 245

[201] Evidence, Australian Dairy Industry Council, p. 107.

[202] Evidence, Australian Dairy Industry Council, p. 114.

[203] Evidence, Australian Dairy Industry Council, p. 114.

[204] Evidence, UMT, p. 853.

[205] Evidence, Australian Dairy Industry Council, p. 122.

[206] Nigel Austin, The Universal Farm, Bulletin Magazine Vol. 112., 27 March 1990, p. 119.

[207] Florence Chong, Trading Policies: Trading Costs of Value-adding, the Australian newspaper, 16 June 1993, p. 29; see also Evidence, Australian Dairy Industry Council, p. 131

[208] Evidence, Murray Goulburn Cooperative Company Limited, p. 251.

[209] Evidence, Murray Goulburn Cooperative Company Limited, p. 252.

[210] J. Bills and others, Outlook for the Australian Dairy Industry, Outlook 94, Vol. 3, Agriculture: collection of papers delivered at the Outlook 94 Conference held in Canberra 1-3 February 1994, organised by ABARE, pp. 237-238.

[211] See T. Gleeson and others, Outlook for the Dairy Industry, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 262,