Senate Rural and Regional Affairs and Transport Legislation Committee [Part 2], , 4:20:16 to 4:43:44
The hearing concludes with updates from the FRDC, Dairy Australia, and the GRDC. Topics include offshore wind zone mapping, dairy industry productivity, and the management of financial reserves for grains research.
Topics: Agricultural productivity, Trade policy, Infrastructure
Speakers: Hon Matthew Canavan, Senator Ross Cadell, Speaker 18, Michael Crowley, Sharon Starick, Dr Matthew Shaffer, Interjection, Nigel Hart, Paul Roderick, Speaker 24
>> Thank you, Mr. Norris. You in your offices. Thank you very much. And we'll now go to uh FRDC. And if MLA could also come into the room too, please. and dairy Australia. Everyone actually let's >> cuz we'll be trying to plow through
>> when meet and likes the one we want to
>> All right. Um I welcome officers from FRDC and m you Mr. Sloan do you wish to make a very brief opening statement or
you have.
>> Thank you chair I'm happy to get straight into it.
>> Thank you.
>> Sorry the APVMA went significantly longer than we thought and I apologize for that. Um very quickly want to just stick on car >> what cup research has FRDC funded itself since the national car control program 2022?
FODC hasn't hasn't funded any since that
Who's telling me this? Um, futures of seafood atlas which overlays commercial fishing with approved offshore wind zones and all sorts of things. Um, Gibsland is the only offshore wind I think is currently still proceeding at this stage. Is there an overlap between commercial fishing zones and Gibs land on your atlas?
Yeah, the the futures of seafood project uh has been led by the blue economy CRC and the atlas is actually available on the website. It's um it's publicly most of the proposals for offshore wind have some sort of interaction with uh fishing activity, but I can't speak specifically to that one, Senator. I'd have to go and have a look specifically at at at that zone.
>> I think it's the Yeah.
>> certainly. Senator, the intention was for it to look at those overlaps and quantify where there was displacements and and uh uh potential, you know, interactions that would need to be managed. That was one of the intentions uh so I'd need to go and have a look at the specifics of each of those zones, but it's uh it's not the only area where the the zones are proposed where I'm based in Port Stevens on the east coast in New South Wales.
>> Fine. Port Stevens.
>> Yes.
>> Yeah. Offshore flooding. Yeah.
>> Yeah. So there there are proposals for those offshore zones in other places.
>> when you go there and that interactive map, one of the things I always saw was fish don't read maps, fish don't value lines and they are they will go habitat shopping. They'll go all sorts of things this looks at trends. What are you doing to to look at those trends of where are you predicting where habitats may move or is it just where they are currently? What's the forward looking on the atlas on the map?
>> It's a it's a really good question. So, uh, the the idea with, uh, that piece of work was that it wouldn't just be a snapshot, uh, and be sort of a one-off, that we would set up the atlas and be able to keep adding data to it. And that's sort of part of the future plan for that work. So uh we we are seeing you know uh range extension in a whole raft of species and uh sea urchins on the southeast coast are one of those examples where we've seen them extend down into Tasmania from New South Wales. Uh and there are a whole range of species that are um that are experiencing those sorts of uh shifts. And so that work uh is the start of mapping uh and monitoring how it will uh track into the future. Yeah.
>> Okay. Last question. I can't find any a bears or work by you looking at 30 by30 analysis. Have you done any work looking at the 30 by30 project?
>> Thank you Mr. Sloan. And we'll allow you to um escape the building and we'll now call Meet and Livestock Australia.
And that'll be Senator Kenned.
>> Uh they I suppose we'll just wait. Righty. Um I just have some questions on the um livestock product assurance accreditation system. Um uh I believe uh this is put out by uh the integrity system company uh organization. So you you've got some responsibility for that. >> Yes, it's a wholly owned procedure of >> ML. Okay. Uh that uh accreditation includes a number of questions that uh livestock producers have to fill out. I'm I'm particularly interested in question 2.8 8 which reads, "Do livestock have access to leaking electrical transformers, capacitors, hydraulic equipment, solar panels, wind terms, turbines, calcium gas structures, or coal mine wastes? Um why why are solar panels and wind turbines uh a risk to a product assurance system relating to food safety?" Yeah, Senator,
the um the question was included in LPA around the increase in renewable um energy um installations on farms and it was more not to deter people to do that at all. There's certainly no restriction on solar farms or wind farms on farm. It's more about just keeping an eye on aging infrastructure and if there are any risks identified that they are raised as part of their LPA accredititation.
>> Right. Your own advice um does say there are uh potential uh risks associated with livestock exposure to persistent chemicals pathogens from leak recycled water or physical infrastructure. I'm quoting directly there uh from uh your guidance to producers goes on to say that this includes access to renewable energy infrastructure including solar panels and wind turbines particularly as they degrade with age. Yes. >> So exactly what are the chemicals or or or or pathogens that are that are exposed to livestock from degrading solar panels and wind turbines?
>> Uh I'm not sure, Senator. I'll have to come back to you on that. if you could
take that on on notice. Uh has the integr integrity systems company relied on any particular studies here uh uh to um conclude that there are risks from wind and solar panels to
>> prod I'll come back to you on that senator. It's also important to note that we have a a dedicated supply chain task force where we work with the peak industry bodies on any changes to the LPA program as well. So there was also consultation with industry >> included in uh in any of those changes to LPA. >> But I'll come back to you on the detail.
>> So yeah, given this advice, the integrity system company does accept that solar panels and wind turbines do pose a contamination risk to livestock.
It's more flagging that as producers have these installations on farm that they monitor if there are any uh risks with um uh with having those installations on farm as they age.
>> Okay. And uh is is this risk does it have to be declared on an NVD?
>> No, it doesn't.
>> Why not?
>> Um because I think uh generally speaking there it's a very low risk. >> Okay. and it is not something that is um identified at the moment as a food safety concern.
>> Are there other risks to contamination from um pathogens or chemicals included on the NVD like coal mine waste, colum gas? Is that included? That's not included either. >> Okay. Um and if if livestock are contaminated, who's ultimately liable?
Uh that's a good question again Senator in that um we would have to go back to the state and territory jurisdictions on
>> Okay. Uh look just moving on I just wanted to I believe NLS 2.0 has a revised go live target. What's caused
>> Uh it's been a very complex project Senator. Um the project has hit some hurdles in its um in its lifespan and we've taken considerable u management interventions and taken considerable steps to ensure that that project delivers a redeveloped NL database to the quality and functionality that is needed by industry into the future. Uh so there were some technical delay um technical issues with the original uh development of the of the database. That project has now been reworked and is now back on track to deliver a go live of the new analyst database in December 2027.
>> Okay. Are these delays uh coming at a cost to producers? They're being funded by producer levies.
>> There's um two major sources of funding. Uh we did receive a considerable federal government grant to redevelop the database and additional costs beyond the grant are being covered by industry through levy contributions.
>> And how much is that?
>> Uh the total cost of the fixed price build is $30.5 million.
>> Yep.
>> Um approximately $6.7 million will be from producers.
>> Very helpful. Great to have the figures at hand. I've done that. Um okay. Well, given the time, I'm happy to conclude there. We'll have some other questions I
thank you very much. And we'll now call Derry Australia. And as they wake their make their way up, we will welcome Chief Executive Officer Dr. Matthew Schaefer and the chair, Mr. Paul Rodri. Thank you, gentlemen. Sorry about the could always be worse. We could be doing four days of it. Okay. So I will ask you do you want to make a very brief opening statement before we go to coalition questioners?
>> Um in light of the time no
>> thank you Mr. Brick appreciate that. Sorry. Yeah Mr. Brick. >> Yes sir. The
>> today earlier we were talking about milk. We were talking about uh dairy and how we're going on the uh food security um plan there. >> Yep. given our herd size and um is maintaining but not increasing and number of farmers are out um how are you working with the industry um very I know we've the anecdotally they were saying that uh dairy farm profits seem up a little bit now but it's the toughest gig I've ever heard of being a dairy farmer there's still industry about the dollar milk or the dollar 20 milk there that's still going around a push for the $2 milk how are we involved in keeping keeping the industry strong when we've got such internal uh stresses when we see if the EU trade adoption with still big subsidies on European dairy products coming here what can we do as government what we should
>> so look there's two parts of what I look at with our um dairy profitability is obviously the price but we work on the um the cost end with our productivity um so as far as
>> diesel than transporting is there
>> well there is on the um yeah on the farm side and on the transport side there's a lot of diesel and and those sorts of things involved in that cost but I guess our focus is on the uh cost of production y >> sorry and and more of the productivity and what we're trying to achieve on farm so there's a number of ways we're looking to do that and sharpen in with our new strategic plan um that I'll get Matt to probably talk a little bit more about some of the key elements but as far as productivity goes it has been an upward trend for the dairy industry on a per cow and per farm basis. Whilst we have a lot less dairy farmers, those farmers and those cows are far more productive than they were 10 to 20 years ago.
>> Everything's two milks a day now every year going through.
>> Yeah. And um just just uh a little snapshot on some of that is the work that we've done in our genetic space and a lot of that's been industry and farmer funded. And so that's a huge productivity gain in what we're seeing with our genetics of our animals now. So that's that's part of what we're we're looking at. Um so yeah, we've got more productive farms, but less of them on a profitability side of things. It's very much driven by seasons as well as price. So we've seen quite a good season, particularly coming off a really bad one the year before in the south where the engine room of our milk production is. And so we have seen a better season that's driven uh more profitability.
>> Oh, you I thought you gonna chime in
>> Um sure, I would just simply say that um Dario focuses on the productivity side. So we're we're helping farmers make different decisions on how to be productive on their farms. And to be clear, it doesn't mean this guy has to work harder. It just means that they sweat their assets a bit more. And we can try to help them do that through our investments in everything from um training people through genetics as Paul says and also the the foragers.
>> When you look at the productivity stuff, a lot of the very product getting less farmers but bigger farms helps on the capital outlay. A lot of these new technologies are quite expensive. Automated milking these sorts of things. is there any sign that roll out of more of these things will get cheaper as that they're not cheaper in uh real cheaper in real terms as opposed to cheaper in dollar terms as this higher take up of uh these these technologies?
>> Yeah, we've seen some pretty uh innovative um tech come into our industry. Um, halter collars is a big one and and you touched on some of the automatic milking systems, but I think it's one of the main decisions we make uh in dairy and also across all of agriculture is about the cost benefit of that. And I think when there's more if there's a little bit more competition in that market as others go in in competition, we've seen that in things like uh wearable devices with the collars and the ear tags. those sort of things have create created competition and created um I guess downward pressure on on those prices. So that's just one example that we can look at.
>> Senator Canavan be quick. Um look, I
just want to quickly ask about the EU free trade deal. Have you done any analysis of the impact on the Australian dairy industry of that proposed deal?
>> We had done some original work um probably 18 months ago. We haven't updated that since.
>> Okay. So what what did that work show? What was it based on in terms of access both to and from the EU market for
>> So it was based on um scenarios. So it wasn't meant to be a prediction and it was based mainly around the change in geographic indicators. So it wasn't so
much on anything else. >> So did did you model the removal of the tariff on cheese that we impose? Okay. Well, it's a key issue obviously. Um uh so okay, you probably can't help too much. Uh have you been asked by government to provide any further advice?
>> Not on that point.
>> Okay. Um the um you might be aware the European Commission has done modeling. The Australian government hasn't for some reason, but the European Commission has and they concluded that dairy would be one of the few sectors that would be negatively impacted in Australia from a free trade deal. Have you looked at
that? Well, certainly in this original work we did and we've been working with our um counterparts in the representative organizations to provide whatever data we have in terms of the actual um amount of cheese and butter and so forth coming in.
>> Okay. So, how much cheese does come in from the EU at the moment to Australia?
So, I don't have the breakdown by the EU for cheese, but the European Union put in $743 million last year um
>> dairy products,
>> dairy of dairy products. And
>> what's the Have you done else? The the Australian Dairy Industry Council tell me that the average EU cheese maker gets 30% of their income from government subsidies. Have you looked at that before?
>> Um, we have not looked in great detail at that.
>> Yeah, that's pretty unfair. All right. Thank you. Thanks, chair.
>> Thanks, Senator Canavan. Gentlemen, thank you very much. Safe travels. And we'll now go to our last witness, um, Grains Research and Development And we welcome managing director, Mr. Nigel Hart, and the chair, Miss Sharon Do you wish to make a brief opening
>> Uh, in the essence of time I won't.
>> Great. Thank you. Questions. Senator Canavan. >> Senator Cadell. Sorry.
>> Okay. I think last time we talked about the uh what does GC's reserves policy set the target at and why are reserves so far above it in your cash balances?
So I might start by talking about where the reserves are and then I'll hand over to Mr. Hart to um talk about our reserves policy. Y [snorts] >> so our reserves as of the end of June of this year as reported in our annual report are sitting at $815 million. To provide some greater context around that figure though, um we need to take into consideration that GDC has over 600 million dollars worth of forward um contracts or commitments. Um the board has been very conscious in thinking about the reserves and the reserves um serve two purposes. So one is when we do um as with any agricultural industry um there are there is high variability in seasons and we only need to go back to 2019 when there was an expansive drought across grain growing areas across Australia and GDC had to make um some cuts and reductions in terms of their investment around um R&D. The other purpose of res reserves is that it does allow the organization um to invest in much longerterm projects, projects that are going to be delivered over a 10-year period and in basic science that is going to answer some of the big questions. So for example, one of the announcements that GC did make over the last 12 months was a nitrogen mission. Nitrogen fertilizers are really key inputs for any farming business as a grower. Um we've seen our fertilizer prices increasing from somewhere between 30 and 50%. Um so they are significant input cost in our business. The nitrogen fertilizer mission aims to look at transformational ways or investing in new science which will give us step changes in nitrogen management on farm. So the our reserves actually enable us to do that by investing in over a 10-year time frame attracting the best and most talented people and researchers to actually develop these solutions to growers.
>> Okay, only got a minute left and I will stop at 1100%. So, I've got some other financial questions I'll put on notice, but um what research are you funding on um uh phosphine fumigation at the moment under the new exposure limit, if any, and when will any of that come out?
>> Thank you. Thank you, Senator. Um yes, we are uh we've stood up a project which we're investing about $4.7 million over three years. >> $4.7 million over three years, and that's in conjunction with uh our commercial partners um the likes of CBH, Grain Corp, and the major bulk handlers.
Yep.
>> Um we um uh yeah that work has commenced. Um we are confident that well not confident but we we're certainly going to be ensuring that we uh invest in a way in which we can help to uh again the challenge with the the new phosphine levels is the there's no current technology that can actually measure it. So our job is really to try and develop a that that technology to measure it to those levels. Um and that's what the purpose
just ticked. So look at the chair.
>> If you want to ask
>> if I go if I can go back. >> So that's a three-year program. So it is literally work out the tech, how to measure it, and then how to apply it. >> It's not bad when you're getting mark the test before you I know. I accept that there. Um just the one question on finance I will ask now. What were the um with the reserves 2526? How much did it earn and what were the fund management fees? Do you know that? on 815 million.
>> Yeah, somewhere between I think it was around about $27 million, but if I could take that on those in terms of what the
fees on. >> Sorry to muck you around just the APVMA went much longer than we thought. Sorry
>> Thank you very much. Um, so, uh, thank you very much, uh, Miss Derek and, uh, Mr. Hart. Appreciate that. Sorry about the timing. It is Senate estimates. You know how it works. Safe travels anyway. On saying that, can I take this opportunity to sincerely thank my Senate colleagues? Uh, Senator Cadell, you and the opposition senators have been an absolute pleasure to work with as per usual and it's good to see the committee back to its old way of operating where we are collegiate and respectful to each other. I want to take the opportunity to thank the government senators too for your support. Now, Patrick, to you and your team as always, magnificent to Miss Anderson, Mr. Low and all the officers at the department and all witnesses today. Thank you so much. And you are a leader, Miss Anderson, because you're one of the few secretaries that stays starts at the beginning and stays till the end. So well done to you, [laughter] >> hand broadcasting. Thank you so much. That concludes today's uh um hearing. We committee now stands adjourned. Thank