THE Productivity Commission (PC) is holding public hearings on its draft report on the Australian pigmeat industry.
The draft report released in December provided the Commission's preliminary findings on the industry and its outlook.
The Commission found a decline in the industry¹s profitability and market share from mid 2002 to the end of 2003 reflected lower pig prices in competitor markets, high feed prices due to drought and an appreciating Australian dollar.
Competitiveness and profitability appeared to improve again during 2004.
The report highlights the continuing structural change in the industry, with Australian pigmeat businesses becoming increasingly integrated into world pigmeat markets.
During the past six years exports have increased from $56 million to $195m and imports increased from $40m to $219.
The PC found that although government could seek to reduce some impediments to competitiveness, this could only make a marginal difference compared to factors such as relatively high feed prices or low economies of scale.
The Commission considered the case for industry-specific assistance to be weak. It warned that restricting imports would increase pigmeat prices for consumers, retailers and manufacturers.
It would also blunt incentives for pig producers and processors to adjust to the market environment.
³To prosper in the long term, pigmeat businesses need to stay focused on lowering costs and differentiating their products,² Commissioner Neil Byron said.
³They need to be well managed and located, targeting markets in which they have competitive advantages.
³Some businesses will struggle, but others will continue to do well overall.²
Anybody wishing to comment on the draft report is invited to attend public hearings which will be held in Perth on January 28.
Additional hearings may be scheduled subject to the interest of participants.
Interested parties wishing to participate or observe the hearings should register their interest by completing a registration form on the Commission's website at www.pc.gov.au/inquiry/pigmeat/ind ex.html or by contacting Vicki Thompson on freecall 1800 020 083 or by email: email@example.com. The hearings will be held in accessible venues.
Copies of the draft report can be obtained from the Commission or its website at www.pc.gov.au.