Independent panel receives more than 800 written submissions

Acknowledging the uncertainty and anxiety for the future of the sheep and related industries in WA, the independent panel consulting on the phase-out of live sheep exports by sea has released an interim update on its progress to date.

"We have engaged with over 2000 attendees at our in-person forums and over 330 at our virtual forums, as well as holding over 80 meetings with organisations and farmer groups," the panel update said.

"We have also received over 800 written submissions and 3300 survey responses."

"An overwhelming majority of those people who attended our public meetings voiced their opposition to the government's decision to implement its election commitment," the update said.

As part of the process the panel has made the submissions available via its page on the Department of Agriculture, Fisheries and Forestry (DAFF) website, with some notable omissions from the list.

WA Agriculture and Food Minister Jackie Jarvis and Premier Roger Cook and DPIRD were not listed, while Federal National Party leader David Littleproud, WA deputy leader of the opposition and MP for Roe Peter Rundle, and The Nationals WA MP for the Central Wheatbelt Mia Davies all had submissions available.

Mr Rundle said the lack of submission from the State government or DPIRD showed a lack of true support.

"Premier Cook and minister Jackie Jarvis have been saying 'we support the industry' but they actually haven't done anything to demonstrate it," Mr Rundle said.

"If there is no submission from the State government or DPIRD, that basically indicates there is no genuine support there.

"It is really quite disturbing."

In response, Ms Jarvis said she was in regular contact with Federal Agriculture Minister Murray Watt and the State government would provide a submission to the panel.

"I am continuing to liaise with industry with regards to the particular challenges to WA on the Commonwealth's intention to phase out live sheep exports by sea," Ms Jarvis said.

"I have been in regular contact with minister Murray Watt and made it very clear of the impact of this decision on our livestock and associated industries.

"The State government will be making a submission to the independent panel consulting on the phase-out of live sheep exports by sea."

The panel noted it was considering the feedback from public consultations (verbal and written), as well as expert analysis on the potential economic, agronomic and other impacts of the phase-out, which is the report that was due at the end of July from analysts Episode 3.

Working in this, Ms Jarvis said DPIRD had been charged with scenario modelling to identify challenges and opportunities associated with the transition.

"I will be discussing the analysis and complexities of the transition and its potential impact on the WA sheep supply chain and associated industries directly with the panel," she said.

"The outcomes of the modelling will be influenced by the timeframe for a transition, as determined by the Commonwealth.

"This timing will inform future considerations about support required to facilitate the transition."

With many questioning the viability of some of the suggested alternative markets for the live sheep export trade, there has been much speculation around the idea of compensation.

"Any discussion around compensation is a matter for the panel and the Federal government," Ms Jarvis said.

"In the meantime, I will continue discussions with the Commonwealth to bring about the best deal for WA's valuable sheep supply chain."

The Australian Competition and Consumer Commission (ACCC) also made a submission to the panel, pointing out removing an industry market would affect many different levels.

"The ACCC does not have a specific role in relation to livestock exports from Australia and as such we do not propose to provide any comments on the policy drivers of the phase-out or its specific timing," the submission said.

"The purpose of the ACCC's submission is to assist the panel to identify any competition and fair trading issues that may arise because of the phase-out."

In providing background the ACCC said that while the live sheep trade represented a relatively small component of the WA sheep industry, the impact on related industries could be significant and it did not see any viable alternative and the reduction in competition posed several risks.

"While the phase-out is limited to live sheep exports by sea, the ACCC considers that live exports by air are unlikely to represent a viable alternative to sea exports," the ACCC said.

"The loss of access to live export markets and the potential reduction in competition due to fewer buyers of WA sheep may lead to poorer outcomes for sheep producers by increasing the market power of remaining buyers in a relatively concentrated market.

"This increases the risks of businesses using unfair trading practices in their dealings with sheep producers and the risks of anti-competitive behaviour through the supply chain.

"In the Cattle and Beef market study final report (2017), the ACCC observed that livestock agents may represent multiple buyers and sellers, or both buyers and sellers, in a single transaction.

"In certain circumstances, this may create a conflict of interest for the agent and could potentially suppress competition between buyers and sellers which may lead to artificial prices for livestock."

Mr Rundle said the idea of expansion of processors was also a very delicate issue on several fronts, something the ACCC also highlighted.

"If the panel and the government intends to facilitate discussions between competitors, care should be taken to ensure this does not increase the risk of collusive behaviour," the ACCC said.

"For example, the transition may involve significant discussions or agreements in relation to processing outputs or the allocation of capacity across competitors.

"When you have processors potentially full, like you do at the moment, there is a real environment for collusion to take place and once again prices to fall.

"It has the potential to place an enormous amount of pressure on the smaller processors, who haven't got the capital base to work from if the sheep numbers reduce.

"It is quite bizarre to me, I have tried to explain the Premier and the minister about the critical mass of the sheep flock, they don't understand that if we fall below a critical self-replacing Merino flock, we are actually putting in jeopardy the whole sheep industry in WA - including the processors who are going well.

"We need to maintain the flock, but what we are seeing is the confidence fall-out of the market.

"It goes without saying, if you take out a fairly strong section of the market, it will have an effect on the market."

This view is also argued by WoolProducers Australia in its submission.

"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 it 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," WoolProducers said.

It said the consequences could be dire for the WA wool industry.

"There is currently strong negative sentiment among sheep producers in Western Australia, which has been highlighted in MLA and AWI's May, 2023 Sheep Producers Intention Survey stating a massive 48 per cent decline in producer confidence," WoolProducers said.

"It is worth noting that already WA producers are reporting a strong forecast fall in wether flock numbers in the next 12 months (forecast to fall 45pc), which will have a detrimental impact on WA's wool production volumes.

"It should be noted that a reduction in wool production in WA would have negative impacts on both the Western Wool Selling Centre and Western Australian AWTA facility, with some industry people suggesting that the live sheep ban and predicted reduction in sheep numbers may see the closure of the selling centre."

With the panel to hand its final report to the Minister in two months time, the industry is waiting to see what the next development will be.