PRIMARY PRODUCTION: by Damian WyldNews Weekly
SA egg producers at breaking point
, February 4, 2006
South Australia's egg industry is in jeopardy, writes Damian Wyld.South Australian egg producers have been forced to slaughter hens by the thousand since December, thanks to a national egg glut, collapsing prices and suspected dumping practices.
Now at breaking point, exasperated producers left several dozen eggs outside SA Premier Mike Rann's office to raise awareness of their plight, with one prominent producer breaking down in tears.
Over 300 jobs across the state are under threat, with a further 900 jobs at risk in related industries such as feed and transport.
How did such state of affairs come about?
In 1992, South Australia became one of the first states to deregulate its egg industry, preceded only by New South Wales. Other states followed, with Western Australia, the last, doing so only last year.No assistance
Unlike their New South Wales counterparts, who received a $61 million dollar assistance package following their 1989 deregulation, South Australian producers received nothing. A subsequent court case did see some eventual support, although apparently inadequate given the industry's current situation.
Egg producers now face additional costs since being required to comply with laws requiring changes to the size of battery-hen cages. Under the Animal Welfare Code, agreed to by all states in 2000, larger cages are to be in use nationally by 2008.
No financial assistance has been given in any state (thereby negating the claim that producers enjoy a "level playing field"), although the South Australian Government did try twice to alter this section of the agreement, but without success.
To makes matters worse, the egg glut comes at a time when Australian egg consumption is at its lowest level in over 40 years (estimated to be around 130 to 150 eggs per capita annually - well below the lofty national target of 200).
Some of the problems are obvious, but the solutions may not be.
Egg producers have been successful in rapidly attracting a great deal of public attention to their cause. Media support, dressed in parochial "buy local" garb, has guaranteed awareness among industry bodies, parliamentarians and the general public, but specific outcomes are yet to be achieved.
The Independent "No Pokies" upper house MP Nick Xenophon, ever mindful of popular causes, has publicly backed the producers. Among other things, he has asked why assistance could not come from the estimated $300 million received by the state in National Competition payments since the 1990s.
There have also been calls for the return of hen licence fees. Following deregulation, South Australian producers received nothing from the State Government, whereas their New South Wales counterparts received $15 to $16 dollars per bird. The possibility of producer legal action against the State Government has been raised.
Producers have been extremely critical of the Government's response to date, going so far as to say there is "no point" meeting with Agriculture Minister Rory McEwen. Their focus instead has been on Premier Rann, who has been accused by many of avoiding the issue - and even of avoiding producers in public.
Deputy Premier, Kevin Foley, called the crisis a "painful" but "inevitable" restructure which is "not the responsibility of taxpayers to fund". He said a "free market" meant the Government could not get involved in subsidisation, but he has announced a "buy local, eat local" campaign, focusing not on eggs, but on local produce as a whole.Waste of time
Given the national oversupply of eggs, however, coupled with federal data suggesting there is little prospect for the growth of the domestic egg market, a marketing campaign could well prove to be, if not a drop in the ocean, a complete waste of time.
The only comical moment of the crisis has been the Greens' contribution that "hens need rescuing as much as the producers" and that supporting local industry meant "greenhouse gas savings in not carting produce all over the country". Meanwhile ...
Anti-dumping measures have also been mooted, but if the crisis is, as it would appear to be, a case of national oversupply, then interstate producers are probably following market trends, rather than engaging in predatory activities reportable to the Australian Competition and Consumer Commission (ACCC), as some have suggested.
The South Australian egg industry cannot ultimately be saved by appeals to the courts, nor by a food promotion campaign alone. A long-term solution must be found to ensure the viability of local production - and it must be found soon.