RELIEVING regulatory burdens, lifting international competitiveness and addressing labour shortage issues are among the key objectives canvassed in a Labor Party Red Meat Strategy discussion paper released yesterday.

With a Bill Shorten-led Labor government now looking increasingly likely after a Federal election sometime between May and November this year, industry attention is starting to focus on how supportive a future Labor government would be towards the nation’s red meat industry.

Labor says it will use the discussion paper and further feedback provided from stakeholders to develop and implement a strategic red meat industry plan.

Labor’s agriculture spokesman Joel Fitzgibbon

The key objectives of the plan will be reducing costs and improving the sector’s international competitiveness, increasing domestic processing capacity, improving security of product supply, and the delivering an appropriately skilled workforce.

Input from key stakeholders would be critical to the success of the final plan, Labor’s agriculture spokesman Joel Fitzgibbon said at yesterday’s discussion paper launch.

Labor began consultations with the red meat sector’s key stakeholders to develop the plan 18 months ago, with formal round table events held in Brisbane and Canberra, and one-on-one discussions with key stakeholders.

The discussion paper released yesterday suggests that in principle at least, Labor is serious about building a platform to support the processing sector, one of the largest rural and regional employers in Australia and its largest agriculture exporter.

The paper said Labor believes the red meat sector offers the potential for further growth, which can be realised by lifting productivity, improving its international competitiveness, growing its share of global markets, and pursuing higher-value market segments.

“Further growth and profitability will drive stronger regional economies, more employment opportunities and growing export earnings. Labor will work with industry, unions and other stakeholders to develop and prioritise a suite of policies to achieve this objective,” the document said.

The report said Labor believed government has a significant role to play in creating the right investment environment in the red meat industry including:

• Improving access to capital and encouraging investment in productivity-enhancing innovation
• Keeping costs including energy costs and regulatory burden as low as possible
• Optimising the allocation of natural resources and ensuring they are utilised in a sustainably profitable way
• Promoting competitive and fair markets and constraining abuses of market power
• Maintaining a strong biosecurity framework
• Incentivising investment in research, development, innovation, commercialisation and extension
• Providing key road, rail, port and telecommunications infrastructure
• Developing, expanding and maintaining export markets
• Helping to identify new niche, high value premium product markets and market segments.

In a document somewhat thin on detail and solutions, but strong on aspiration, the paper covers-off on a series of pressure-points experienced by processors, including energy costs, the impact of drought and climate change on productivity and continuity, market access, the processing sector’s competitive aspects with live exports.

Cutting the regulatory burdens

While any sector producing food for human consumption could expect to face regulatory hurdles, the red meat sector faced a particularly heavy regulatory burden, the discussion paper said.

“The policy response to the regulatory burden carried by the red meat industries must be considered in the context of our competitors in major export markets – not just the domestic environment,” it said. “In particular, it should be noted that in addition to all the regulatory costs faced by all Australian businesses, the meat processing sector has to absorb quarantine and inspection costs.”

Critical to addressing the industry’s regulatory burden would be greater cooperation between the Commonwealth and the States, the report said. “That means restoring a formal COAG process for the agriculture sector. Labor seeks feedback on the Productivity Commission’s report and views on how government might reduce the cost to industry of quarantine and inspection services,” it said.

Tackling energy costs

Among other topics, the discussion paper also focused on energy costs, recognising that meat processing is an energy-intensive business, impacting on the sector’s international competitiveness and profit.

“The last six years has been marked by energy policy inertia in Australia. This has led to uncertainty and reluctance to invest in new energy capacity,” the paper said. Under-investment had in turn, lead to higher energy prices.

Labor would continue to argue for a policy settlement which meets Australia’s carbon reduction commitments and provides certainty to investors, the report said.

“For example, gas plays a critical role in providing generating capacity for firming until technologies for storing renewable energy are better developed and operational.”

Labor has also indicated that under its governance, a more interventionist policy would be adopted towards gas producers to ensure availability and affordability of gas for generation and industry.

Industry response:

The processing industry’s service delivery and R&D management bodies supported the Labor Party’s initiative in developing the red meat sector discussion paper released yesterday.

AMPC chief executive, Peter Rizzo

The Australian Meat Processor Corporation’s chief executive Peter Rizzo said it was encouraging to see the discussion paper acknowledge key elements of AMPC’s recently launched Cost to Operate Report, which highlighted the costs for red meat processors in Australia compared with its major international competitors such USA, Brazil and Argentina.

“Our research has clearly shown  that processors are operating in a highly-competitive international environment and the cost of doing business each day was becoming a major challenge,” Mr Rizzo said.

“The red meat processing sector contributes more than $21 billion to Australia’s GDP a year (including flow on effects) and is responsible for creating more than 124,000 jobs predominately in regional Australia.

“Like other manufacturing industries we face challenges around our workforce including skills, attraction and retention as well as other factors such as the price of energy and increasing government regulation.

Mr Rizzo noted that the discussion paper had given industry the opportunity to identify ways that industry and government can work together to build a stronger processing sector that supports local communities and boosts the national economy.

“By acknowledging the barriers to success, government, industry and other stakeholders can work together to develop tangible solutions that make a difference to not only processor but the entire red meat sector.

“We also acknowledge the discussion paper’s inclusion of a review of the research and development bodies in the red meat sector.

“The consultation process around the review will enable us to provide further evidence of the benefit AMPC is providing to our industry,” Mr Rizzo said.

Mr Rizzo congratulated Shadow Minister for Agriculture, Joel Fitzgibbon and Shadow Minister for Innovation, Industry, Science and Research Kim Carr for acknowledging the sector through its discussion paper and recognising the importance of R&D in its strategy.

“AMPC looks forward to contributing further through consultation to use robust research and solid evidence to deliver certainty for the red meat industry,” he said.

AMIC CEO Patrick Hutchinson

Australian Meat Industry Council chief executive Patrick Hutchinson said Labor had taken an important first step in the right direction for rural Australia.

“The impact of the drought has reverberated right along the red meat industry supply chain, and therefore it’s a positive move that Labor is taking is a total-supply-chain view,” Mr Hutchinson said.

“Currently, assistance only seems to be available to farmers, but as the red meat industry from the farm-gate to plate is one of the biggest rural and regional employers and Australia’s largest agriculture exporter, greater focus and support is now essential from all political parties,” he said.

AMIC would work with Labor to ensure AMIC’s 2000 members, including processors, independent local butchers and smallgoods manufacturers were represented in the consultation and planning process, he said.

“AMIC has long advocated for the reduction of the significant regulatory burden facing the red meat industry. Also, the council will work with Labor to explore in more detail issues such as increasing female representation in the sector, carbon reduction, labour deficits caused by a visa program unfit for purpose, non-tariff export issues and excessive operating costs such as energy.”

Mr Hutchison “As an example, the proposed Gladstone abattoir in Central Queensland may have been given the go-ahead by State Government for a high-tech meat processing facility; however the operator would need a significant amount of support to find skilled workers – local and international – given the industry-wide issue of processors struggling to fill 3500 positions daily to be at optimum capacity.”

“Unfortunately, red meat industry is stymied by red tape, a local workforce that doesn’t value working in the red meat industry and an overseas workforce that has been made harder to access,” he said.

“As our industry is aware, the future growth, sustainability and global competitiveness of Australia‘s red meat sector will be as a result of red meat industry’s pursuit of quality, product integrity, productivity gains and innovation across all areas of the supply chain.  However, investment support is vitally needed.”

“We all want farmers to thrive, but the reality is that a weakened supply chain will be the next crisis for farmers if urgent action isn’t taken.”

• Click here to access a copy of Labor’s red meat strategy discussion paper/