Brian Tessmann, 07 December 2015

The passing last week of the Bill to introduce an ethanol mandate is yet another manmade and unnecessary blow for animal industries such as the dairy who that are already facing a raft of cost increases. According to information released with self-congratulation of both by Labor Minister Mark Bailey and the Katter Australia Party (KAP), the mandate will start at 3 per cent of all petroleum from January 1, 2017 then rising to 4pc on July 1, 2018.

The Liquid Fuel Supply (Ethanol and other Bio Fuels mandate) Amendment Bill was introduced and passed by state parliament without any Regulatory Impact Study (RIS) which under due process would normally accompany an amendment bill of this nature. This in itself shows what I believe to be an ongoing breakdown in proper state parliamentary governance and process. Furthermore, it just continues to show the one sided mindset that has accompanied this move for a mandate since the balance of power arrangements after the last state election.

Despite earlier indications the Bill too does not appear to have any mechanism to review and suspend the mandate in times of drought. The ethanol mandate will significantly worsen grain and stockfeed prices that go through the roof during shortages in supply. It is a very real problem for feed producers as even Bob Katter, one of the biggest supporters of the mandate, admitted that the mandate will significantly raise grain and feed prices for users such as dairy farmers while speaking at the supposed public consultation meeting in Brisbane. This then calls into real question the sincerity of KAP member’s claims that this is a win for all. Feed cost rises will cut deeply into all animal industries during times of drought when feed is short. Even the most extensive grazing operations become virtual semi feed lots as they are buying in their feed or shipping cattle off to fatten at actual feed lots.

There also seems to be no clear provision for making the by product from ethanol plants specifically available for drought feeding to at least offset the ethanol impacts in drought. Ethanol from grain is a low energy product with some protein value. However, given that it is currently moist and has a short shelf life, it needs to be dried fully so it can be used as drought feed that can be made available to smaller operators such as the average dairy farmer any time of year or season. Equally there is a real concern about the impact of the ethanol mandate on molasses supplies which also are in short supply for animal industries in times of drought.

Maybe the Energy Minister should spare a moment to ask the Agricultural Minister how much of Queensland is currently drought declared and what the outlook looks like. You would have thought at a very minimum that the Agricultural Minister would brief Cabinet on the current drought disaster.

Dairy farmers like many other agricultural industries are struggling under dramatic cost increases which are purely man made. Key in this is the huge increases in electricity prices which have been going up both as a result of poor government planning and decision making and the desire by government to use them to raise taxes to pay off debt. On top of this the State Government is pulling funding out of agricultural extension and Biosecurity duties and imposing that cost onto industry. It then seems completely immoral for the state government to add to this cost burden by saddling the animal industries, particularly dairy farmers, with higher feed costs that will blow out further in drought times, simply to maintain support and manage the numbers for their benefit in State Parliament.

Extracted in full from Queensland Country Life.