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11 June 2024

Committee Secretary

House of Representatives Standing Committee on Agriculture

PO Box 6021

Parliament House

Canberra ACT 2600

Via email: agriculture.reps@aph.gov.au

 

Dear Consultation Panel Members


Re:  Inquiry into Export Control Amendment (Ending Live Sheep Exports by Sea) Bill

AgForce Queensland Farmers Limited (AgForce) is a peak organisation representing Queensland’s cane, cattle, grain and sheep, wool & goat producers.  The cane, beef, broadacre cropping and sheep, wool & goat industries in Queensland generated around $10.4 billion in on-farm value of production in 2021-22. AgForce’s purpose is to advance sustainable agribusiness and strives to ensure the long-term growth, viability, competitiveness and profitability of these industries. Over 6,500 farmers, individuals and businesses provide support to AgForce through membership. Our members own and manage around 55 million hectares, or a third of the state’s land area. Queensland producers provide high-quality food and fibre to Australian and overseas consumers, contribute significantly to the social fabric of regional, rural and remote communities, as well as deliver stewardship of the state’s natural environment. 

AgForce strongly opposes the Export Control Amendment (Ending Live Sheep Exports by Sea) Bill 2024.

This submission opposes the Australian Government's policy to phase out live sheep exports.  It highlights the vital role of the live sheep export industry in promoting farmgate competition and ensuring a sustainable sheep industry. It is imperative that the live sheep export industry is maintained in Australia.

AgForce believes the ban is an ideologically driven policy that disregards the interests of farmers, their suppliers and rural communities for political gain.  An election commitment should not override the need for good policy. The government's motivation should be to enact policies that are in the best interest of all Australians, not just a
select few.  The Western Australian Government, agricultural peak bodies and the WA community are united in their opposition to the ban.  The only entities in favour are animal activists who have an agenda to end all livestock production, along with the Albanese Government, which appears to be prioritising influential minority groups over the livelihoods of WA Farmers.

The process by which this committee was formed and the hasty timeline for submissions and reporting are evidence of the government's disregard for the agricultural sector. The one-week submission period and the brief two-week period for the committee to report are insufficient for a thorough examination of the legislation's potential harm.  This
rushed process suggests the government's intent is to expedite the ban without proper scrutiny.

The export of live sheep by sea from Australia is a long-standing industry and has contributed considerable value to Australian agriculture and the Western Australian economy.  In Western Australia, the live export industry underpins strong rural and regional communities, ensuring vital employment for shearers, truck drivers, fodder suppliers, livestock agents, veterinarians, farmers, producers and their families.  Removing this trade creates uncertainty for not only the sheep industry, but numerous other agricultural industries like beef, and grains and has incredibly detrimental flow-on effects on regional communities.

Failure to listen to science-based Animal Welfare

The Australian Government has failed to listen to industry and has blatantly disregarded the outstanding improvements and performance of the live sheep trade.  There have been significant improvements in animal welfare in recent years with improved conditions on board vessels such as decreased stocking rates and additional on-board monitoring, all of which have led to a decrease in mortality rates.

Shipboard mortality rates remain the primary performance measure used by industry and the regulator as it is an objective measurement.  In 2023, the average daily shipboard mortality rate for sheep was 0.0062%, the lowest on record. The average daily mortality rate in 2023 compares to average daily mortality rates of 0.010% in 2020, 0.029% in 2015 and 0.038% in 2010 – that is, average daily mortality rates for sheep are less than one-fifth of the levels they were in 2010.1

Given the industry's demonstrable improvement in animal welfare and its ability to meet and exceed the government-imposed animal welfare indicators, the decision of this Government to pursue the live export ban through the Export Control Amendment (Ending Live Sheep Exports by Sea) Bill 2024 under the guise of an election promise, rather than as a policy based on evidence is of huge concern on how this Government may deal with future issues, where animal activist opinion can trump scientific fact.

Supportive Community Sentiment

The live export industry is seen by Australians as both an important part of the agricultural sector and to deliver important economic benefits for the country.  Recent community sentiment research conducted by Australian data science company VoconiQ2, the third in a series of national surveys of Australians since 2019, included several key insights, namely:

  • Farmers producing livestock for export are seen as playing an important role in Australian society, with 90% of participants in agreement with this sentiment in 2023.
  • There is strong agreement that the live export industry delivers real economic benefit for regional communities, up to 78% agreement from 74% in 2019. The industry is also seen to provide important alternative markets for Australian farmers (68% agreement in 2023, up from 63% in 2019).
  • Australians also recognise that farming communities would suffer economic hardship should the live export industry discontinue, with agreement on this measure increasing from 67% in 2019 to 78% in 2023.
  • 42% of participants disagreed that live export of live animals to overseas markets should stop, regardless of the impacts on Australian farmers. This is an increase from 37% in 2019.
  • More than half (58%) agreed or strongly agreed that the Australian industry has improved the standard of livestock management and slaughter in overseas markets, with only a small proportion disagreeing (12%), and the remaining responses ‘neutral’ (30%).  This is a significant improvement from the 2019 response to this item, where only 41% indicated agreement.                                                                

However, it appears the Federal Government hears only animal activist voices, despite there being significant community support for live sheep export.                                                                                               

Within the Explanatory Memorandum of the Bill, it was stated that an example of the significant level of public interest in the phase-out of live sheep exports was an RSPCA petition before the Australian Parliament to prohibit the export of live sheep by sea in legislation this parliamentary term with more than approximately 40,000 signatures.   This is said to be in the top 1% of the number of signatures on petitions on record with the Parliament. However, current petitions advocating for live sheep export to remain, have at the time of writing, approximately 48,000 signatures, demonstrating there is strong community support for live sheep export.

Community Impact

AgForce is gravely concerned about the negative impacts that implementing this policy will cause to Western Australia’s rural and regional communities, their economies and the overall economy of the state of Western Australia.

Through individual discussions and meetings with our Western Australian primary producer (sheep) counterparts, Queensland producers are deeply concerned for the well-being of those directly impacted by the Australian Labor Party’s election commitment to ban live sheep exports. 

During these discussions and meetings, we have heard directly from Western Australian producers, many of whom have been brought to tears due to the lack of certainty and risk of losing this income source, their livelihoods, their businesses and what for many, has been generational growth in building their rural businesses.

We have seen in Queensland over the last two decades, that a reduction in sheep numbers leads to reduced employment opportunities, equating to fewer people living in our rural communities; consequently, leading to reduced services offered by government to those communities like schools, hospitals and other integral infrastructure; services which are taken for granted in metropolitan Australia.  Sheep numbers in Queensland declined from 8.5 million in 2001 to a low of 1.8 million in 2016, resulting in Queensland agricultural jobs falling by 28%. Sheep numbers have since recovered in Queensland to 2.8 million in 2021, resulting in increased economic growth and employment opportunities.  As flock numbers continue to increase, it is forecasted there will be approximately 1,585 new people living in rural Queensland, with $109.74 million per annum increase in income from sheep; 683 new jobs created and $64 million per annum increase in wages.2 Investing in the sheep industry is investing into rural communities.

It is estimated there are 3,500 Western Australians employed across the $143 million per annum live sheep export trade and its associated supply chain, potentially 2,000 of whom are indirectly employed in supporting businesses and as commented in recent Senate Estimates hearings, the future existence of the live export industry’s research and development corporation, the Australian Livestock Export Corporation (LiveCorp), is also under threat from Labor’s policy.

There will be over 3,500 families that will be worse off as a direct result of the Australian government’s decision to ban live sheep exports by sea.

Furthermore, there is extreme concern for the mental wellbeing of the communities affected by the Bill, specifically impacted producers.  From the very start, this Government’s conduct and mistreatment of farmers on this issue has been an absolute disgrace.  It shows a stunning disregard for the situation unfolding on the ground in WA – where emergency task forces are scrambling and hotlines are lighting up to help producers through a crippling tough patch.

Producers' buoyancy in October 2022 about the future of the sheepmeat sector has pulled back significantly (nett sentiment:+27, down 40 points). While most states remain positive, WA sentiment has plunged, down now to-48 (more producers negative about the future of the sheepmeat sector).3 

To pursue this prohibition could be a high-risk move by the Government in terms of facilitating negative mental health and wellbeing outcomes.  Yet the decision to push ahead with this ban, not based on evidence and without the chance for industry to put its case forward to retain the trade has been made. This highlights that the decision to ban the
live sheep export trade is not a responsible decision.

Agricultural Industries

The precedence that would be set by a government imposing a ban on a viable and legitimate trade is of utmost alarm as it creates uncertainty as to what future industries or industry practices could be shut down on the whim of a government, particularly by a government which has not considered technical, trade or scientific advice and who are merely chasing a populist vote.

The damage that would be done to the current Government in terms of relations with the agriculture sector if this ban is to proceed cannot be underestimated, as it will lead to a complete loss of confidence in this Government’s ability to support a viable agriculture sector going forward.

Cattle

The Bill will have direct impacts on the live cattle export industry and the cattle sector in general.  Many practical implications arise that will put pressure on live cattle exporters.  For example, many live export vessels currently operate multi-species configurations, which cannot be simply reconfigured in the absence of ovine haulage. 
Additionally, several live export enterprises exist as multi-species exporters, with their enduring viability linked to a diversified business model.

Beyond the more practical impacts on cattle exporters, should the policy be implemented, it is only logical that fears exist for the future of the live cattle trade.  While the Government may purport to have no intent on closing out the trade, it is important to recognise the context driving the sectors’ cynicism towards this claim.

The Australian cattle industry saw the live cattle trade shut in 2011 with disastrous effects. Despite the courts delivering a ruling in the industry's favour, they await – over a decade on – the receipt of their justly owed compensation. Moreover, this industry is so regularly beset by extreme anti-agriculture activists. 
These groups make no such distinction between wanting to see the cessation of the live sheep and cattle trades.

While the government supposedly remains committed to maintaining support for the cattle live export industry, in WA this will be difficult, particularly in Southern WA where the viability of some voyages is intrinsically linked to sheep exports, with the majority of live sheep export voyages from WA also carrying cattle.  Thus, the most enduring commitment that could be made to the live cattle trade, and cattle industry more broadly, would be not to proceed with the sheep export phase-out.                      

Wool

Many in opposition to the live export trade point to the reduction in market size and revenue over time as a way of suggesting that the industry is a ‘dying trade’ however, what is failed to be acknowledged by those against the trade is that to remove this viable market option, not only ceases
that direct market revenue, but it may well remove the impetus to have sheep and wool as part of a sustainable business model.

Even as the world’s largest supplier of apparel wool, the Australian wool industry is only producing 328 Mkg annually,4 down from the industry high of one million tonnes in 1990. 

Any significant loss in wool production, as is being foreshadowed by Western Australian producers, may have serious ramifications on national wool production and its substantial $3.5 billion contribution to the national economy in exports alone.

The composition of the WA ewe-base is predominately Merino at 84%.  In self-replacing, Merino flock's wether portion are retained for wool production, with many culls or cast for age wethers being destined for the live-export trade, demonstrating that the live export trade is a vital component of the WA Australian wool industry.

The live export market provides a market channel for semi-finished stock, such as Merino wether hoggets or mature-age wethers, that do not meet ideal specifications for slaughter for either domestic meat markets or packaged meat exports.  Having the option of live trade as an accessible market ensures that WA wool growers can retain a viable wool growing business and allows for an adaptable business model that can pivot as required due to seasonal and other variable factors.  The removal of this market option will make wool production in the West significantly less feasible.

Grains

Many WA growers rely on sheep production as part of their farming production ‘mix’.  The Western Australian Department of Agriculture and Food has stated that “Sheep flocks are generally run in conjunction with other enterprises, predominantly grain production, on mixed enterprise farms. The sheep enterprise utilises approximately 30-40% of the arable area on the average farm”.5  In particular, on farms that have some marginal land for cropping, growers may choose to grow sheep rather than crops.  A live sheep export ban may impact this opportunity for some grain growers thereby reducing diversification and exposing grain growers to higher market and price risks.

Grain growing is very capital intensive and producers make long-term investment decisions based upon stable long-term government policy.  With the consolidation of grain farms over recent years, their financial investments have increased and this shift in government policy will negatively impact their return on investment and increase risk.  It is of concern to our grower members that the government has indicated a withdrawal from live sheep exports without adequate consideration of the implications to Australian grain growers, in particular in WA.

Australia is a net exporter of grains and Australian grain growers are heavily dependent on export markets. Australia is seen by its trading partners as a reliable international source of agricultural products.  There is a concern that the ban on live sheep exports will negatively impact the perception of Australia as being a secure and stable long-term source of products.                                                                                                

Furthermore, the paradox is that, in recent years, the increasing cost of grain growing inputs (such as fertiliser) has so impacted the economics of grain production to the point that many growers have turned their minds to sheep production to maintain the viability of their farms. Additionally, should mixed farmers be able to successfully transition from sheep to 100% grain production, this will put more strain on an already over-loaded transport and logistics supply chain.

Transport

The live exports sector employs 13,000 people in Australia, with the wider livestock and processed red meat industry, directly and indirectly, employing 435,000.6   Indirect jobs include those involved in the transportation of meat and livestock, activities related to livestock sales and employment in providing animal health services and supply of farm inputs.

Phasing out live sheep exports by sea will impact rural transporters’ bottom line by between 30-40%.  Despite claims to the contrary, there is no reliable evidence that local processing will replace the activity that transporters derive from live sheep exports.  Trucks and equipment will be sold, but the value of equipment will be significantly diminished.

Furthermore, most rural transporters are small to medium-sized businesses with their depots and homes in rural communities. Small businesses are the lifeblood of rural communities.  As strong supporters of their community, transporters patronise other local businesses by purchasing parts, fuel, maintenance and tyres locally.

A reduction in transport activity will inevitably reduce the amount that is spent with local small businesses. This will undoubtedly flow on to other businesses such as cafes, roadhouses and other service providers.

Trade Future

The Bill places significant risk to Australia's status as a valued and trusted trading partner and as a global leader for free and open trade.  This risk extends not just to the broader sheepmeat and wool markets, but to the entire agricultural sector and other trade-exposed industries of the Australian economy.

Australia’s live sheep export trade is far from in decline despite otherwise suggested by the Federal Government; with the industry's efforts to improve animal welfare validated by its improving social licence.  In 2023, live sheep exports by sea lifted 22% or 107,191 head to 593,514.  This is the only annual lift live sheep export numbers have had in the last five years and the largest year since 2020.

Policy decisions for Australian agriculture must not be based on emotion, rather they should be evidence-based, strategic, inclusive, and collaborative.

On-Shore Sheep Meat Processing

The assertion by the Minister that replacing live export markets with sheepmeat sales will benefit the industry simply demonstrates the ignorance of those advising the Minister on the dynamics of the sheep industry in Western Australia.  Irrespective of the meat processing sector’s historical labour issues, roughly 66% of live sheep exports are aged wethers and the remainder are lambs and hoggets. Due to the west’s short seasons and lack of pastures, merino wethers struggle to reach target slaughter specifications without additional feeding (additional cost to the producer) and where processors find this class of sheep less desirable because they are heavier and older, harder to handle and  process and do not meet the needs of Australian consumers. Meat processors impose discounts for these sheep.                                                                          

ACIL Allen notes there are potential negative impacts for Western Australian sheep producers with the removal of live exports as a disposal option if domestic price trends continue and Western Australian slaughter capacity cannot absorb the additional sheep numbers.

Live exporters provide price competition for sheep farmers.  Without this continued competition and subsequent strengthened prices for the producer, there will be enough discouragement to send farmers out of sheep entirely.                                                                                                                         

Some Western Australian producers are already looking to exit the sheep industry altogether.  Without sheep to kill, there is a potential future risk to Western Australia's small animal meat processing sector, together with its hundreds of meat processing jobs.

National Implications

Whilst Queensland sheep are rarely traded directly with the western live export trade, there will be indirect impacts on Queensland's sheep producers as a result of a live export ban, especially during times of poor seasonal conditions and drought.  During these times many Queensland sheep are transported to southern regions, some of which may end up being moved to the west destined for the live export market and where many south-eastern Australian sheep do already move west for the live export trade, freeing capacity for Queensland sheep to graze in New South Wales, Victoria and South Australia and assisting in mitigating negative animal welfare outcomes due to drought conditions.

Similarly, with a vibrant industry Western Australia acts as a reservoir that other states can draw upon during times of restocking from drought, enabling faster restocking and resumption of production than would otherwise be the case.  This provides producers in other states greater confidence, enabling them to destock at the onset of a drought earlier and much more quickly, knowing that they can rapidly rebuild their flocks.

This circular supply of live animals will come under significant pressure, with many Western Australian sheep producers exiting the sheep and wool industry because of the Australian Labor Party’s 2019 and 2022 election commitments to ban live sheep exports.

International Implications 

The Bill places significant risk to Australia's status as a reliable, valued and trusted trading partner and as a global leader for free and open trade.  This risk extends beyond just agriculture, presenting a risk to other trade-exposed sectors of the Australian economy.

The Government should be enabling agricultural market access through negotiating technical and evidence-based rules around delivering plant and animal health, traceability and product integrity and food safety; with the Government being the regulator of the trade, certifying and providing assurances to importing countries that Australia's agricultural products are what they say they are.  The Government does this with the backing of robust industry-government partnerships and regulatory frameworks, where these collaborative frameworks provide the Government prime opportunity to positively advocate for Australia's world-class animal health and welfare practices and standards. Australia's reputation for strong animal welfare credentials underpinning our international market access is the envy of the world.

Australia is the only country in the world that insists every international facility that receives its livestock, such as feedlots and abattoirs, must first meet Australian regulations and Australia's regulatory framework helps set the minimum standards for animal welfare right around the world.  Australia has a responsibility to ensure good animal welfare practices are adhered to and continue to export livestock in such a way as to set an example for the rest of the world. Without Australia's presence as a world-leading exporter of live animals, the treatment of livestock in other countries and those animals being exported will significantly deteriorate.

The Australian government’s policy has caused great concern in the Middle East, due to a lack of certainty for its people’s food supply.  Similar to Indonesia 2011, trust between the trading partners will be lost, which will take years to rebuild.

A ban on live sheep exports to Middle Eastern countries will potentially jeopardise other agricultural commodities, such as feed grain, boxed meat and dairy if retaliatory steps are taken.

For example, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), since 2020-21, Saudi Arabia is 1 of the top 5 export markets by volume for Australian barley (reflecting the latest ABS export data available up to December 2022) making up 38% of the Australian export program, followed by Japan (15%), Vietnam (8%), Thailand (7%), and Kuwait (6%).                 

The Middle East emerges as a top destination for Australian Barley exports and Australian Wheat production is estimated at 30.3 million tons in 2022-23, up 22% above the 10-year average with the Middle East being a prime candidate for these wheat exports to find a home. Shifts in trade status with Australia would remove these opportunities and once again put a strong reliance on the single destination of China for grain exports.

Furthermore, Australia is a net importer of oil, with only around 12% of refinery feedstock domestically produced and where 80% of Australia’s oil needs comes from the Middle East via Singapore.7

At this time of increasing costs of living within Australia, where energy consumption is a significant contributing factor to these costs, Australia can ill-afford to lose the large proportion of our imports of oil or face greater costs for the volume of imported oil.  

The Government’s policy position sets a worrying precedent; that a government can shut down any industry for domestic political advantage in response to ideologically motivated interest groups, regardless of the investments made in objectively improving export performance and the damage it will do to our national interest.

According to the United Nations, the global population will reach 9.7 billion people by 2050 and we will see a growing need for protein and high-quality, ethically produced food and fibre. Australia must maintain an influential seat at the international trading table.  Live sheep export bans that are not based on objective data are not the way to
secure trade deals with nations heavily reliant on food imports that importantly meet their specific cultural needs.

Conclusion

AgForce will never support legitimate agricultural industries being closed for political reasons; where policy decisions for Australian agriculture must be evidence-based, strategic, inclusive and collaborative. 

Given the indifference to the outstanding improvements and performance of the trade since 2018 and the lack of consultation and due diligence completed by the government when recommitting to this policy, an alarming precedent has been set for future agricultural policy decision-making.  The policy decisions made for Australian agriculture must be evidence-based, strategic, inclusive and collaborative.  To divert from this threatens the future of the industry, businesses, families and communities.  Government has a responsibility to ensure that no Australian is worse off or left behind. However, should this policy be implemented, that is what will occur for thousands of Australians in Western Australia.

To turn their back on the sheep industry with this Bill, the Australian Labour Party is disgracing their very own legacy. The Party was built on the back of the sheep industry in 1891 with the Great Shearer’s Strike eventuating in Barcaldine, Queensland.  The Australian Labour Party would do well to remember this and their own election campaign mantra:

“No one is left behind”

We thank the House of Representatives Standing Committee on Agriculture for the opportunity to express our concerns on behalf of the 6,500 farmers, individuals and businesses that support AgForce Queensland Farmers. 

Please do not hesitate to contact AgForce Sheep, Wool and Goats Policy Director, Jaime Colley, colleyj@agforceqld.org.au or 0428 889 052, should you wish to consult further.

 

Yours faithfully

Georgie Somerset

General President


LiveCorp, State of the Industry, 2024, accessed at "https://assets.ctfassets.net/8fjsq0xyf4sy/qsfKZvN477evIwwBgbFWt/2593999cd09da8537f01e0685658b19b/LC_107899_State_of_the_Industry_05_FINAL.pdf"

Queensland Department of Agriculture and Fisheries, Queensland Feral Pest Initiative: Cluster Fencing Program MERI Rounds, 2023, accessed at "https://notjustafence.org/"

Meat and Livestock Australia and Australian Wool Innovation, Sheep Producers Intention Survey, May 2023, accessed at "https://www.mla.com.au/globalassets/mla-corporate/prices--markets/documents/trends--analysis/sheepmeat-survey/spis---03-may-2023---final-report.pdf"

Australian Wool Innovation, Australian Wool Production Forecast Report, April 2023, accessed at "https://www.wool.com/market-intelligence/wool-production-forecasts/australian-wool-production-forecast-report-apr-2023/"

Western Australian Department of Agriculture and Food, The Western Australian Sheep Industry, 2016, accessed at  https://www.agric.wa.gov.au/sites/gateway/files/WA%20Sheep%20Industry%20booklet%202017.pdf.

L.E.K Consulting, Livestock Brief – International Supply Chain Benchmarking Sectoral Assessment: Report for the Department of Infrastructure, Transport, Regional Development and Communications, August 2021, accessed at "https://www.freightaustralia.gov.au/sites/default/files/documents/sectoral-report--livestock.pdf"

Australian Government, Geoscience Australia: Oil, 2022, accessed at Australian Government – Geoscience Australia