Sheep- Live Export and Domestic Processing- ACIL Tasman Report

SHEEP — LIVE EXPORT AND DOMESTIC PROCESSING — ACIL TASMAN REPORT

1043. Hon LYNN MacLAREN to the minister representing the Minister for Agriculture and Food:

Further to question without notice 1010 of 15 October, regarding the economic resilience of rural communities, I ask —

(1) Is the minister aware that the ACIL Tasman report of September 2009 identifies that Australind, Bunbury, Coolgardie, Esperance, Geraldton, Gingin, Hyden, Katanning, Kellerberrin, Narrikup, Narrogin, Tammin, Waroona and Woodanilling would all benefit from a cessation of the live sheep trade?

(2) Is the minister also aware that the sheep meat processing industry currently provides employment for 2 000 workers, which is more than the Western Australian live export industry provides?

(3) Is the minister aware that the total number of jobs in this industry would increase to approximately 4 000 were the live sheep trade to be phased out?

(4) Has the minister reviewed the policy options for government to identify a system of export quotas and a phase-out over five years?

Hon ROBYN McSWEENEY replied:

I thank the honourable member for the question.

Hon Max Trenorden: Why?

Hon ROBYN McSWEENEY: Hon Max Trenorden comes alive whenever the sheep trade is mentioned, and quite rightly so!

(1) Yes. I am also aware that this conclusion is predicated on the assumption that the number of sheep slaughtered in Western Australia increases by one million to 1.5 million per annum, and that suitably profitable long-term markets can be found for an increased supply of sheep meat.

(2) I am aware that the livestock export sector in Western Australia supports 1 500 jobs for Western Australians, and that the value of live sheep exports significantly exceeds the value of domestically processed sheep in Western Australia. In 2008-09, the value of sheep exported live was estimated at $260 million, and the value of sheep and lamb processed in Western Australia was estimated at $236 million. I am aware of the great benefit to regional Western Australia of the meat processing sector, as I am aware of the great benefit of the livestock export industry.

(3) I am aware of the estimate in the ACIL Tasman report of 4 000 meat industry workers being needed for a one million to 1.5 million-head increase in the number of sheep slaughtered in Western Australia. I am also aware that this estimate is based on projections provided by two representatives of the major sheep meat processors in Western Australia. I believe there is an opportunity for the meat processing industry to increase exports to suitable markets as and when it sees fit. Importantly, though, the livestock export trade provides an underpinning for sheep prices in Western Australia, which is of significant benefit to local farmers. Without the livestock export trade there would be less competition in the sheep market. The implication that the sheep meat processing sector can accommodate a doubling of processing and that international and domestic markets can accommodate a doubling of sheep meat production and supply without a consequent reduction in meat and stock prices needs further consideration. Both meat and livestock export industries are market-demand driven, and it cannot be assumed that markets are infinitely elastic and that substitution between markets can occur.

(4) It is not my intention, nor that of the government, to intervene in a commercial market by introducing export quotas.