abbott patronises china, page-89

Ive had a guts full of you liberal liars.

PIP COURTNEY, PRESENTER: Depending on where you stand on dairy deregulation, the glass is either half full or half empty. Heavily discounted home brand milk is clearly popular with consumers, but at what cost to dairy farmers?

Over in Western Australia, the effects are probably being felt hardest where the industry's drying up to the point where fresh milk had to be trucked across the Nullarbor this year to make up a market shortfall.

A new report suggests foreign investment could be the answer, but that's sparked a lively debate in the west about what sort of investment and just how much is needed.

SEAN MURPHY, REPORTER: For a hundred years the Guimelli family has been milking cows at Dardanup in the south-west of Western Australia.

JOHN GUIMELLI, DAIRY FARMER: I've got shovelfuls of the dairy passion. I inherited that from my father and my grandfather and I've had a life-long association with the industry. And although we're seriously underpaid, the lifestyle I think makes up for some of that.
SEAN MURPHY: Now, John Guimelli is leaving the industry he loves, but unlike his father and grandfather before him, he's not passing the business on to his son. He's selling his 100-strong herd and turning his 160 hectares into a beef farm.

JOHN GUIMELLI: He has the passion, but it's very symptomatic of our broader industry in WA that the next generation is not there and it's not through lack of desire. It's just through lack of money. There should be enough scope in the price of milk to fund the next generation to come in and help the old man and gradually ease into his harness and take over. But we left all that behind when the industry was deregulated. It was a government decision that was a total disaster. I don't even get the same price for milk that I was getting 12 years ago. I'm still less than that. I was getting 48 cents 13 years ago. I wouldn't even be averaging 40 cents now. And we've come through all the cost escalations and all our inputs.

SEAN MURPHY: WA's population may be booming the dairy industry is in decline. When deregulation came in 2000, there were more than 400 dairy farms. Now there are about 160 and milk production is also dropping. In February this year, fresh milk had to be transported across the Nullarbor to make up a market shortfall.

PETER EVANS, WA FARMERS FEDERATION: There's certainly a lack of confidence amongst farmers and that's probably because we haven't got a lot of faith in the processing sector and we would like some confidence that there's, yeah, a future, reasonable milk price in the medium term, in the intermediate term.
SEAN MURPHY: Why is the milk price so poor? I mean, if you've got less supply and more demand for it, basic economics would say that producers should be getting paid more.

PETER EVANS: Well that's right and that's what's so frustrating for us.

SEAN MURPHY: Peter Evans is the dairy section president at WA Farmers. He says it costs more to produce milk in the west because the growing season only lasts six or seven months and he reckons the supermarket price war has been a big factor in keeping prices below the cost of production for many producers.

PETER EVANS: Well it's definitely had an impact because we estimate there's $25 million has been taken out of the dairy segment in supermarkets just in WA. So, that would be spread between the retailers, the processors and the farmers, and you can't take that amount of money out of a 160 farmer industry without having a big impact.

SEAN MURPHY: WA's biggest and oldest processor is Brownes which collects about 45 per cent of the state's milk. It says supermarket competition has always been strong in WA.
TIM CUSACK, BROWNES DAIRY: It's more of a three-cornered contest in Western Australia between Coles, Woolworths and the independents and there's been that level of competitiveness in white milk for a long time and of course the brands are a lot more competitive in Western Australia as well. It's just one of the factors of the way this particular marketplace has developed.

SEAN MURPHY: But the company is concerned that year-on-year milk production is down about 10 per cent and it recently announced a price increase of two cents a litre, guaranteeing a minimum price of 44 cents from 1st July.

OSCAR NEGUS, NEGUS ENTERPRISES: I think the average price of milk in WA for long-term longevity in the industry definitely needs to be higher. You know, probably on an average of all the suppliers in WA, if everyone got five cents a litre more, that'd be huge inroads into the challenge that the industry's facing at the moment.

SEAN MURPHY: Oscar Negus helps run a family enterprise at Capel in the south-west producing about 10 million litres of milk a year from 1,250 cows. He's optimistic about the industry's future, but he's worried about what impact supermarket home brands are having on the industry now.
OSCAR NEGUS: The way the major supermarkets are behaving with their milk discounting and making it harder for the processors and the farmers to make a profit, that is a major issue that we face at the moment, and you know, what we can do to alleviate that, who knows? From a personal perspective all I do is try to convince people if that if they buy home brand milk they're not sending much profit back to the farmer. So we just try and tell everyone to make sure they buy a named brand and don't buy supermarket home brand 'cause that's the stuff that's really driving our profit margins down.

SEAN MURPHY: Like many dairy farmers, the Negus family has been selling heifers on the export market to keep ahead of rising costs.

OSCAR NEGUS: Most farmers have sold heifers in the last couple of years and basically, you know, it's to help with cash flow and it's another sort of (inaudible) enterprise, but as you say, it doesn't help the state maintain milk production when heifers are going over to China or Mexico or wherever.

SEAN MURPHY: At $1,300 a head there's no doubt the heifer export trade has been keeping the industry afloat here in WA, but it's also contributed to the state's problems. Last financial year, more than 12,000 heifers were exported. That represents about 72 million litres of lost production capacity. That's about 20 per cent of what the industry produced last year and the lost production won't be easily replaced.

PETER EVANS: This state has minimal disease issues, so we actually can't import cattle from the east. If suddenly the prices kicked up there's lot of restrictions on bringing cattle over from the other side of Australia, because of diseases that are endemic there or exist in eastern Australia but not in the west.
TIM CUSACK: Yes, look, the number of heifers that we understand are being sold is over and above, you know, a level of comfort that we'd have in terms of the heifer stock replacing the underlying requirement of the herd on an annual basis. And, yes, that is a concern. Export demand is high, demand from the east coast is high. That said, what we've done is partnered closely with our suppliers to - with a vote of confidence in them through higher milk price, a longer term contract with guaranteed minimum. And through those things we're hoping to provide the level of confidence that can see a more normal level of heifer sales going forward.

SEAN MURPHY: Brownes has also headed off a more immediate supply crisis by buying 3,200 cows from share farmers on the south coast. And while it will own the cows, the New Zealand dairy company Lactans owns the three farms they came from.

Is it a gamble given that you haven't secured a land deal with the cows?

TIM CUSACK: No. We carefully considered this opportunity. We have worked extensively with our existing supplier network to identify properties for those cowed to be milked on. But we are working with Lactans, the property owner, and we are hopeful of being able to negotiate with them an ongoing arrangement so that those cows and share milkers don't need to vacate. So that's what we're currently working toward.

SEAN MURPHY: The WA Government says the dairy industry is not yet at crisis point, but it is worried about its inability to supply a population expected to swell to more than three million in the next 14 years.
TERRY REDMAN, WA AGRICULTURE & FOOD MINISTER: It certainly concerns me in Western Australia where the dairy sector's going. Whilst the dairy sector is focused on our domestic market, which is very small, they're going to be at the beckoning call of those big groups that play to that marketplace. It's my belief that the future of the WA dairy industry is strongly linked to our opportunities and scope to export. That's an area that we need to further develop. By doing that, maybe even encouraging some foreign investment back into Western Australia here within the processing sector, would help us along that path.

SEAN MURPHY: WA already exports fresh milk into Singapore and Malaysia. The state's second biggest processor, Harvey Fresh, sends about 15 of these 18,000 litre containers a week into those markets. The company exports about a quarter of its 120 million litres produced each year.

A new report commissioned by Wesfarmers found that exports were the key to securing WA's domestic market.
JAY HORTON, STRATEGIS PARTNERS: Well, the ideal niche for WA is to deliver fresh dairy products into the region. That could be fresh milk, fresh cheeses, yoghurts, dairy desserts - all of the things that give - that play to WA's advantage. And WA's advantage is its close proximity to those growing markets in South-East Asia.

SEAN MURPHY: Sydney-based consultant Jay Horton reckons the best way to expand those markets will be with foreign investment.

JAY HORTON: Some of that investment we believe will come from overseas. There will be foreign partners who are attracted to the idea of working with WA farmers and the processing industry to build it and grow it into a profitable and sustainable industry.

SEAN MURPHY: The question now being asked in WA is where the foreign investment will come from and if China offers sort of potential favoured in the Strategis Partners report.

It's not just heifers, but now entire farms on the shopping list of China's emerging dairy industry. Behind me is the Raven Hill dairy, one the biggest in Western Australia. It recently sold for an undisclosed sum to Chinese investors. A major Chinese beverage company has also recently announced plans to spend $220 million buying dairy farms here in the west.

MIKE NORTON, DAIRY FARMER: The China model is a concern, because it's a closed loop marketing model that will - if it develops the way the Chinese would perhaps like it to develop, it will be a huge problem for the Commonwealth and state governments of Australia. But ...
SEAN MURPHY: Why?

MIKE NORTON: Well it'll basically siphon money directly out of the country and it'll lessen competition, it'll lessen the amount of money that'll get spread around your local communities.

SEAN MURPHY: Mike Norton runs a medium-sized dairy at Capel. He's a former president of the WA Farmers' Association and has been a vocal critic of the Government's lack of scrutiny on foreign investment in agriculture. He says it's not good enough that only farm businesses worth more than $244 million are subject to Foreign Investment Review Board attention.

MIKE NORTON: Oh, look, without doubt our governments really haven't got a clue what foreign investment, be it Chinese, be it American, be it British or - is being carried out in Western Australia at all. Nobody really knows. And until you change the guidelines that govern the foreign investment review, like New Zealand for example, nobody's going to know. It's all supposition, it's all innuendo and hearsay. And we really need to get that data and then sit down and have a discussion about it because I don't think there's a lot of - a terrible lot of investment from China, for example. I think there's more from the Middle East and other investor companies than China at this stage.

SEAN MURPHY: The State Government says it supports foreign investment in the agrifood supply chain, but is investigating a state register of farms being sold.
TERRY REDMAN: It's not a State Government issue. But that said, we do have services within Landgate and I'm having - currently having this discussion with the minister that's responsible for that to see whether in fact we can put a register in place in Western Australia. I'm currently waiting for that advise. But that's a little bit aside from the issue of actually what's happening and the potential for us to actually capitalise on the opportunities that present when we do look at people wanting to put substantial investments here in Western Australia. In my view, it's a strong endorsement of the opportunities that agriculture presents.

SEAN MURPHY: Any expansion will come too late for John Guimelli. His family is now lost to the industry and he fears unless change happens soon it may also be too late for WA's consumers.

JOHN GUIMELLI: Well the consumers will end up getting stale milk. They'll get stale milk or they'll get sterile UHT milk, they'll get maybe reconstituted milk, but they won't be getting fresh milk from WA as they've been so used to. The action has to happen now. It can't wait for two or three years' time when there's only 10 farmers left and people say, "Well where's our fresh milk?," because you won't get - the farmers that exited, you won't get them back again. You need to hold what you've got and grow with that. And dairy farming is a passion that's learnt. And the old system - and it goes for all agriculture, it's learnt by the son following the dad around in his shadow and gradually seeing and knowing and learning and developing. And it's sad that we've lost that.
SEAN MURPHY: Sad that you're walking away from the industry with a bit of a sour taste in your mouth over the whole thing?

JOHN GUIMELLI: Yep, yep. You could say that.

SEAN MURPHY: It'll be a bit of a sad day when the cows go out the gate?

JOHN GUIMELLI: It will be an emotionally wrenching day. There's no doubt about that. And I find it tough. I'll hang on to a couple of pets, but - I might even hand milk those, but it will be a very sad day.

http://www.abc.net.au/landline/content/2012/s3536466.htm

"MIKE NORTON: Well it'll basically siphon money directly out of the country and it'll lessen competition, it'll lessen the amount of money that'll get spread around your local communities."

Whats the difference between the dairy industry and the mining industry.
As I posted yesterday five out of every six pretax dollars leaves this country from the mining industry.
Stop being Xenophobic,its Australians selling to them foreigners,who ever they are.

No-one is forcing people to sell.

MIKE NORTON: Oh, look, without doubt our governments really haven't got a clue what foreign investment, be it Chinese, be it American, be it British or - is being carried out in Western Australia at all. Nobody really knows. And until you change the guidelines that govern the foreign investment review, like New Zealand for example, nobody's going to know. It's all supposition, it's all innuendo and hearsay. And we really need to get that data and then sit down and have a discussion about it because I don't think there's a lot of - a terrible lot of investment from China, for example. I think there's more from the Middle East and other investor companies than China at this stage.

col cetainly hasnt got a clue.

The dairy famers,should start growing potatos,their still protected in WA.

Raider