The Hon. Tim Fischer, MP
The Hon. Tim Fischer MP
FORMER DEPUTY PRIME MINISTER AND MINISTER FOR TRADE

Joint media release

The Deputy Prime Minister and Minister for Trade, Tim Fischer, and
The Minister for Primary Industries and Energy, John Anderson
9 June, 1998

Government Announces Pig Industry Assistance

The Deputy Prime Minister and Minister for Trade, Tim Fischer, and the Minister for Primary Industries and Energy, John Anderson, today announced details of an enhanced assistance package for the pig industry

The Ministers said the package was squarely focused on improving the competitiveness of the Australian pig industry in the production and processing sectors so that it was better placed to meet import competition and seek new export opportunities. They said the Government had agreed to provide another $9 million on top of the $10 million already provided under the National Pork Industry Development Program (NPIDP), as well as relaxing NPIDP guidelines and fast-tracking several NPIDP projects.

"The whole thrust of this package is to help the industry improve its competitiveness quickly and significantly so it can take on its competitors more effectively," the Ministers said.

Mr Anderson said $8 million had been allocated to a new Pigmeat Processing Grants Program that would provide investment grants to specialist pigmeat processors.

"This innovative Program will give direct assistance to processors who invest in new plant and equipment to upgrade their existing facilities and/or construct new works," Mr Anderson said.

"The grant will be limited to 5 per cent of the value of the investment in new plant and equipment and there be a limit of $500,000 per company per year over the three-year life of the program. This means a company such as Darling Down Bacon, which has recently announced plans to spend $25 million building new facilities at Toowoomba, could be eligible for a grant of up to $1.25 million to get the development up and running."

Mr Anderson said the grants would generally only be available to processors with a minimum capacity throughput of 250,000 pigs per year, but exceptions may be made for smaller processors. He said there would be flexibility to provide three years of funding up front. Applicants would have to provide sound business/operational plans and demonstrate a capacity for long term viability.

Safeguards measures

The Government has decided to correct a surprising administrative anomaly it identified when looking at the safeguards issue by introducing a general safeguard mechanism and designating the Productivity Commission as the appropriate domestic agency to conduct inquiries in accordance with requirements under the World Trade Organisation (WTO). The detailed procedures to apply will be published shortly.

"The previous Labor Government inexplicably failed to include such a safeguard mechanism in legislation introduced to Parliament at the conclusion of the Uruguay Round of multilateral trade negotiations in 1994," Mr Fischer said.

"The Government's decision is consistent with our rights and obligations in the WTO and will enable the Commission to hold inquiries into allegations of serious injury to domestic industries due to increased imports. The first inquiry will target the pigmeat industry and will be conducted in full accordance with WTO rules."

Mr Fischer said most other OECD countries have notified specific safeguard legislation to the WTO. The decision to set in place an appropriate mechanism in Australia should be seen in this context.

"It does not represent any backing away from the Government's strong commitment to trade liberalisation which continues to be at the nub of the

Government's multilateral, regional and bilateral trade policy approach."

Exceptional Circumstances

Mr Anderson said the Government had accepted advice from the Rural Adjustment Scheme Advisory Council (RASAC) not to declare Exceptional Circumstances (EC) for the pig industry.

"RASAC has recognised that producers are facing extreme difficulty, but recommended against EC because the current downturn in prices is a market adjustment resulting mainly from an oversupply in the domestic pig market," Mr Anderson said.

He said pig producers experiencing serious financial hardship could test their eligibility for the Farm Family Restart Scheme, which offered income support payments for up to 12 months to farm families who could not borrow further against their assets.

Other initiatives

Mr Anderson said $1 million would be provided from within existing funds to establish a national pig industry initiative under the soon-to-be launched FarmBis Program. It would focus on improving the risk management skills of producers and adoption of best practice in production and marketing.

Details of this measure will be finalised in consultation with the Pork Council of Australia.

Mr Anderson said the Government was concerned that the NPIDP had yet to be drawn on by the industry and as a result it had decided to immediately launch two high priority projects. They were:

Mr Fischer said the Government had recognised the pig industry's concerns about the NPIDP guidelines and decided to relax them in three specific ways that the Government believed would improve access to the existing $10 million. These were:

 

Mr Fischer said the Government would lead a High Level Trade Mission to key markets in order to expand opportunities for exports of Australian pigmeat. It was expected to occur in the latter half of 1998.

He said the industry had nominated a trade mission as a high priority and the work to be commissioned urgently on market opportunities would provide an important input into identifying target markets for the mission.

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