FOOD (LABELLING OF FREE-RANGE EGGS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 4 April 2013.)

The Hon. R.P. WORTLEY (17:53): I rise to give the government's position on this bill. While the government supports true free-range egg producers in South Australia and is supportive of a nationally enforced definition of free-range eggs, the government does not believe that this bill is an appropriate response to the issue. Firstly, a stocking density of the number of egg-producing chickens per hectare imposed in this manner would not, under mutual recognition provisions, apply to free-range eggs that are produced in another jurisdiction and are able to be sold in that jurisdiction in accordance with its regulatory requirements.

Interstate eggs that are produced in systems with higher stocking densities could still be brought into South Australia and sold as free range. As it may be cheaper to produce, local free-range producers with systems that comply with the bill may find it hard to compete with interstate producers not subject to those limits. Queensland attempted to address this issue by passing legislation that allows Queensland producers to label their eggs free range if they comply with a 1,500 hens per hectare maximum free-range system. However, due to mutual recognition legislation this does not restrict producers from other states who are not required to comply with Queensland standards from labelling and selling their eggs as free range in Queensland. Confusing the issue even further, the Queensland government has recently announced that changes to their scheme will allow the stocking density of hens to increase from 1,500 per hectare to 10,000.

Without a national approach and states being without the ability to regulate interstate growers, jurisdictions must consider options to develop a solution that provides consumers with certainty about what they are purchasing without causing detriment to the local egg industry. This bill will result in potentially adverse consequences to South Australia's producers as it will essentially introduce further regulatory burdens on local producers only, and offer no confidence to consumers that eggs labelled as free range are produced in a system not exceeding 1,500 chickens per hectare.

Secondly, this bill amends the Food Act 2001, which regulates food businesses that sell or handle food intended for sale. This appears to be inappropriate as it misplaces regulatory burden on thousands of food businesses and local retailers rather than egg producers. I agree that this is an issue that needs to be addressed. Producers not meeting generally accepted standards have been ambushing the term 'free range' for many years. When South Australian shoppers buy their eggs, they should know exactly what they are getting and the environment from which they have come. In June 2013, the government released a discussion paper on the introduction of a proposed new regulatory standard for free-range eggs in South Australia that will not disadvantage our local producers.

Throughout the consultation period, more than 370 submissions were received, of which 95 per cent advocated the support for the government's proposed industry code. This week the government announced that, following consultation and the overwhelming support from the community, we will develop an industry code under the Fair Trading Act 1987, requiring producers to meet standards including a maximum of 1,500 laying hens per hectare in a free-range system; induced moulting is not permitted; hens have access to range outdoors for a period of eight hours per day; and sufficient overhead shade should be provided to encourage hens to access the range.

The voluntary code will allow true free-range egg producers who choose to adhere to the specified standard to label their eggs as such, resulting in consumers being fully informed about the production of their eggs as truly free range. The voluntary code will not prevent other producers from labelling their eggs as free range; however, a grower could not use the associated badging unless they are, in fact, produced in accordance with the code.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (17:57): I rise to speak on behalf of the opposition to the Food (Labelling of Free-Range Eggs) Amendment Bill. Listening to the Hon. Russell Wortley's comments, one of my opening comments is that it is unfortunate that we have had a federal Labor government for as long as we have, because a national standard or a national definition of free-range eggs really needs to be on the national agenda; and, ultimately, for a fair market, that would be the ideal scenario.

If I am ever fortunate enough to be the minister for agriculture, food and fisheries after the next election, this is certainly a dialogue that I will be pursuing and urging my colleagues to do the same; that is, we try to come to some national agreement, and perhaps I will raise some issues in some of the areas that we might like to look at in the future. However, I am presently faced with an opportunity through this bill to do this as a state level and the opposition will be supporting the move.

For the sake of clarity I will provide some background. In Australia there are three housing systems for egg production including caged, barn and free-range systems. However, because no definition for free range has been created federally, each state has its own standards towards labelling. Currently, the Model Code of Practice for the Welfare of Animals—Domestic Poultry sets guidelines for the minimum standard for free-range stocking density of 1,500 birds per hectare. South Australia and, as I understand, New South Wales, Tasmania and Western Australia all have bills before parliament to cap the free-range density at 1,500 birds per hectare.

In July this year, the Queensland government lifted the number to 10,000 birds per hectare after having attempted the 1,500 bird density. The broad problem, on a technical level, is that eggs not classified under cage or barn-laid are still produced in hugely diverse environments, for example, the use of antibiotics and growth promoters on hens, access to pasture and, most relevant to this bill, stocking rates. Therefore, presently in South Australia, any egg producer not falling under the caged or barn-laid classification has the opportunity to legally label their carton free range. Essentially, larger egg producers can cash in on free-range demand by stocking as many as 20,000 birds per hectare, despite the model code recommendation capping the density of birds at 1,500 per hectare.

Consumers also have little clarity. The true free-range producers perhaps are not being acknowledged for their added effort to produce a standout product. They also lose the ability to charge a premium for that effort. The only opportunity producers have to differentiate their product is through applying for accreditation with Humane Choice and the RSPCA. Those two accreditors alone range from 1,500 to 2,500 birds per hectare and have different standards for things like beak trimming. Then the big supermarket chains like Coles can provide their own accreditation. Coles, for example, sets a stocking density of 10,000 birds per hectare. Suffice to say that discrepancies between labelling and accreditations is conducive to uninformed consumer choices.

While I am speaking on this bill I will also touch on minister Rau's recent announcement of the voluntary industry code, warranting a label on egg cartons adhering to the 1,500 birds per hectare density, stating 'South Australian Laid, Free Range Egg Code Compliant'. I read the minister's press release yesterday with interest and I will make a number of points about it. He states that consumers will finally know they are buying true free range. I believe this implies that producers currently labelling their eggs free range when they are above the 1,500 birds per hectare stocking density are perhaps deceiving customers. I am reliably informed that the consultation measures on this code were very deficient and some of South Australia's major egg producers were not engaged.

This is not directed to the Hon. Ms Franks who moved this bill, but I will also seek some clarification as to whether eggs coming from interstate at the new capped density will be allowed to have the accreditation logo. The minister also stated that the newly-defined free-range eggs will come from hens that have access to range outdoors for a minimum of eight hours per day. I am led to believe that this is already the case and perhaps the minister has not sought enough factual information. The same applies to his statement that sufficient overhead shade should be provided to encourage hens to range. He also states that the accreditation logo will now be developed and appear on egg cartons to meet the requirements by early next year. Is this available for producers with other production systems? Will producers using other systems be banned from using the logo if they farm at 1,500 birds per hectare?

I will also make a couple of quick points. I know the industry has not been able to agree and I wonder what the reaction of some of the big producers will be. We are talking about 1,500 birds per hectare. I visited Katham Springs biodynamic farm on Kangaroo Island last Sunday afternoon and saw their operation. They only stock at 150 birds per hectare. They have an eight-hectare paddock and 1,000 birds. They do a very good job and produce roughly 4,000 eggs per day.

I could see the opportunity for a larger producer to put a shed in the corner with an automated collection system, together with automatic feed and watering. Let's say the shed has 30,000 birds in it and that is in a 21-hectare paddock. They could still claim that there are 1,500 birds per hectare, or slightly less. The production methods and the efficiency with which they can feed the birds, collect the eggs and all the rest of it is much more efficient than the very hands-on approach of the people at Katham Springs who, as I said, produce a very beautiful egg of very high quality.

I wonder whether drawing a line in the sand like this will mean that the big producers amend what they do, which I think is a positive outcome for animal welfare, and that is obviously what is driving this. However, I am not sure whether it will permit producers like Katham Springs, the Fryars on Kangaroo Island and others to continue to reap a premium for their product, if it forces others then to use very modern, efficient and big production systems—putting that shed in the corner of a big paddock and letting the birds roam in that big paddock. I wonder what that will do to the smaller producers.

I also indicate that while we are certainly supporting this, and it appears that a similar bill failed in the House of Assembly last week, I am saying this publicly now for people to provide some comment to the opposition. I am wondering whether putting the stocking rates on the carton is a better way to go rather than saying that 1,500 is free range and above is something else. Clearly, the people on Kangaroo Island have their birds at 150 birds per hectare and their eggs are probably handled with tender loving care and they are probably eggs that command a much higher price than somebody who has 1,500 birds per hectare or 2,500 birds per hectare as some of the other codes indicate. It is something I would like the egg industry to explore.

Maybe a better labelling system is to set an upper limit and maybe that is 10,000 but then on the carton you actually publish it rather than having accreditation. You have to be accredited, you will have to be inspected and there will be annual auditing of the accreditation that you have on the carton, that it is 150 birds per hectare or 500 or 1,500 or, if you are like Coles and you want 10,000, that it is actually the number of birds per hectare. We are expecting the consumers to be well enough educated to look for the logo that minister Rau is talking about or the other logos, so we are expecting a certain level of consumer education. It may just be easier to say that all of these eggs are free range but some have a much lower stocking rate—

The Hon. R.L. Brokenshire: That's the way to do it.

The Hon. D.W. RIDGWAY: —and I think that makes a lot more sense. I am encouraged that the Hon. Robert Brokenshire is nodding and agreeing with me. I will make one last point. I am concerned about the cross-border issues that have been raised by the Hon. Russell Wortley. We have free trade between states. I bring attention to the case of the Barossa Ridge eggs that were actually Victorian cage eggs that were marketed in the Barossa Valley with the lovely grapevines on the carton purporting to be eggs from the Barossa Valley when in fact they said in the very fine print that they were cage eggs from Victoria. I think those same eggs are sold in the Hunter Valley as Hunter Valley eggs as well. It brings up a whole range of issues.

The code is not transferable. People in Victoria, New South Wales and Queensland are able to produce eggs under their guidelines and say they are free range and they will land in South Australia and may not have our South Australian logo on them. I asked a question, not of the Hon. Ms Franks, that if a producer complies with the government's voluntary code in another state, will they be able to use our logo and the government's new accreditation? I think it brings to light a whole range of issues, and really a national approach will be the best way and, in my view, the long-term solution will be having the stocking densities on the cartons rather than drawing a line in the sand. With those few words, I indicate for the purpose of the debate and making sure that this issue is dealt with in the future, I support the bill.

The Hon. R.L. BROKENSHIRE (18:08): Given the time of day I will be briefer than I would have been on this because this is something I could talk about for a long time, but I want to get a few basic facts on Hansard so that the community understands where Family First are coming from. Upfront I advise that Family First will not be voting in favour of this bill and, in fact, Family First congratulate the government on what the Attorney-General has announced today because that is a strong step forward.

I have spoken to minister Gago on this before and I know that she is keen to try to get the ministerial council on primary industries to get national uniformity on this. Now there is a chance for the new federal minister, the Hon. Barnaby Joyce, to work with the ministers to get this fixed. I strongly believe that the only way forward to fix this issue once and for all is to have national uniformity. Whilst a lot of the time we are opposed to national uniformity when it comes to legal issues, in particular of the justice system, on this occasion it is the only way that will work. If you do any investigation, you will find that if we bring in this legislation, then we are going to damage the egg industry and damage the price of eggs for the community in this state in my opinion.

Dairy, eggs and bread are staples for the South Australian community and in tough times in particular families often get a meal out of eggs at an affordable price. I am concerned that this will potentially put up the price of eggs to a point where it will impact on those families who need good protein at a cheaper price.

What I am also concerned about—and the Hon. David Ridgway also mentioned this—is what will happen to the approximately 13 free-range egg producers at the moment if this legislation is passed. I have visited many of them, and I have played footy with one of them in my own town who has a free-range egg farm, and they do a fantastic job.

I am worried that this will turn around and damage them because if we force the limited egg industry we have in this state to go down a free-range track to capitalise on the premium prices, those who are big now will have the financial capacity to build and comply with the requirements, but they will be fully automated. There is no way you can stop how they go with those procedures, and they will produce those farm free-range eggs cheaper than the others.

This is about labelling and density; this is what it is about. Animals Australia want to go to an extreme because they do not support any intensive animal husbandry. I respect the fact that the Hon. Tammy Franks is committed to trying to bring something in and is focused on those free-range egg producers. I agree and support her in that part of it, but I think at the moment we should take a breath and wait, firstly, for national uniformity and, secondly, to give the Attorney-General's voluntary regulatory code a chance to see whether or not it will work.

We already bring a lot of eggs into South Australia; in fact, we are not self-sufficient for our eggs. We do not want to give the Victorian companies a leg-up and, again, I say national uniformity. Let our primary industries minister, the Hon. Gail Gago, bring this issue up with the ministerial council meeting and see whether the Attorney-General's code will work. It is a positive step forward, but we will be opposing the bill based on those facts.

The Hon. J.A. DARLEY (18:11): I rise to indicate my support for this bill. I do so on the basis that consumers have made it quite clear that they want to be able to differentiate between genuine free-range eggs on the one hand and the myriad other options on the other. This bill is not about banning caged eggs or barn-laid eggs: it is about truth in labelling and providing a definition for genuine free-range eggs and thereby increasing consumer confidence. The fact that I have received hundreds of emails in response to this issue certainly demonstrates the concerns of consumers.

I understand that the Greens have consulted widely on this issue, and the majority of South Australian free-range egg producers are in support of this bill which defines and limits stock densities. Coincidentally, I would be interested to know exactly how many free-range egg producers there are in South Australia, as opposed to other egg producers.

There is no question that, with all the different options available in the supermarket aisles today, it is becoming increasingly difficult to distinguish between genuine free-range eggs and other eggs. I know that in my household we pay a premium for eggs labelled free range, and the same can also be said for many other households. I would hate to think that as consumers we were being ripped off.

In closing, I commend the Hon. Tammy Franks for introducing this bill and acknowledge also the work of the member for Finniss in the other place on this same issue.

The Hon. K.L. VINCENT (18:13): I speak today in favour of the second reading of the Hon. Ms Franks' Food (Labelling of Free-range Eggs) Amendment Bill 2012. I would like to thank Ms Franks and our colleague in the other place, Michael Pengilly, for the original briefing on this bill, including the Kangaroo Island free-range egg farmers who presented to MPs and staff last year.

I also appreciate the time that Days Eggs at Two Wells took to brief my office staff on their concerns with this bill and the negative impact they feel it will have on their business as an egg producer that operates in a national market. I also thank them for the tour they gave my staff of the various egg operations out at their Two Wells property. Despite this, I remain convinced that for the welfare of the chickens that produce free-range eggs and for the sake of clarity for consumers, as Mr Darley very eloquently mentioned, we need to make this change to food labelling laws in this state.

I would note that Days Eggs feels that these labelling laws do unfairly disadvantage those producing free range eggs that are not on Kangaroo Island, given there are fewer predators such as foxes present on Kangaroo Island, creating an easy environment to protect chickens. The point I would make, however, is that this is perhaps precisely why we should support food production in environments that are most conducive to that food, crop or product.

In the past 24 hours, my office has received some 500 emails from constituents urging me to support this bill for both animal welfare and consumer reasons. In the same period, I have not received any emails or correspondence asking me to vote against this bill. I have a couple of questions, however, particularly since it has been some time since this bill was first put to the chamber and there has been significant community debate about the issue since.

First, how will this bill interact with national food labelling standards and marketing, given that we operate in a national food market? We buy eggs from interstate and we sell eggs interstate: how will eggs that are sold here from interstate be labelled? Could this in any way disadvantage local South Australian free-range egg producers?

Secondly, given the market demand for eggs is now so large in Australia, what is the expected cost of the passing of these laws in South Australia? Will the cost point for free-range eggs increase if producers such as Days Eggs choose not to produce eggs at 1,500 chickens per hectare? That is all I have for now. I look forward to the answers to those questions and continuing the debate on this important issue.

The Hon. T.A. FRANKS (18:16): I thank the honourable members who have made a contribution. I certainly acknowledge the government's work on this issue, both ministers Rau and Gago. Indeed, the now minister (but in his capacity as a private member) the Hon. Ian Hunter's contribution to progressing this debate has been quite substantial. I thank those speakers who made a contribution to this bill—Hon. Russell Wortley, Hon. David Ridgway, Hon. Robert Brokenshire, Hon. John Darley and the Hon. Kelly Vincent. I thank those who have supported the content of this private member's bill, which is a bill I have worked on with the member for Finniss, and it arises from Greens attempted legislation in New South Wales. It is also similar to bills that have been attempted to be passed in many legislatures around the country.

The reason that states and territories have taken up this particular form of legislation, looking for true free-range labelling and pegging it to that 1,500 per hectare amount, is that progress at a national level has been tried and attempted for many years and has so far failed. This is despite the fact that the ACCC, the Humane Society, Choice and both consumer and animal welfare groups have been campaigning long and hard on this and have been unable to get legislative reform at a federal level.

In response to the Hon. Kelly Vincent's question in terms of whether this would disadvantage local free-range producers as opposed to interstate free-range producers, what I would say is that in this state if you were to label your eggs free range they would have to comply with the requirements that our state has set. That is, of course, that the chickens are kept or housed at under 1,500 per hectare, but there will also be other requirements under the regulations. If you sell your eggs in this state, that will apply to you regardless of whether you are from South Australia or elsewhere.

With regard to whether or not this will increase costs, for those true free-range egg producers that currently comply with this standard, they will have no further costs because they will continue to undertake their practices as they currently do and this bill will, in fact, give them a protection for the label that they currently use.

Those free-range egg providers who currently label their eggs free range but do not meet the standards of this bill will not be anticipating any increased cost for the production of their eggs. They will simply not be able to use the free-range label. That might mean that they are not able to command a premium price for their product, but that is something that the market will decide. Perhaps they will have to move to relabelling their product and certainly terms such as barnyard have often been raised in this debate.

In terms of there being an availability of eggs, simply defining an absolute definition under law in South Australia does not diminish or expand the number of eggs we currently produce. It simply gives us a truth in labelling for free range. I have heard spurious arguments that this will see eggs being imported from the Philippines to make up the shortfall, and that might sound far-fetched but it has indeed been thrown around in this debate that if we label true free range, we will see imported eggs flood our markets. If those eggs are not produced under true free-range conditions, they will not be able to be labelled free range.

There may be no more and no less and I cannot see that there would be an attraction from those producers who cannot comply with the high requirements to therefore compete where we have indeed set a standard. The problem is that no state or territory nor indeed the commonwealth has yet set a standard such that a consumer can go into a supermarket or a local grocer's or a deli and buy what they know to be free range and be confident that that free-range label on the carton indeed reflects the product that they think they are buying.

With some regard to the government scheme, which is of course a voluntary scheme, I have asked the Attorney online, on Twitter—which seems somehow appropriate when you are talking about eggs, given the Twitter theme—whether or not his voluntary code will mean that somebody who has a stocking density over 1,500 can call their product free range on the carton.

Of course they will be able to under the government scheme because those who volunteer will pay a price to be part of that government scheme and will have another cost put upon them to in fact be doing the right thing, and yet those who are not true free range will get a free ride. They will still be able to use the label free range and be able to dupe consumers into thinking that they are free range and they will not pay the fees associated with the government's voluntary scheme and they will not comply with those high standards.

For those reasons, I think the government scheme is not doing the right thing by free-range egg producers. As I say, I do not intend to progress the bill through all stages today. Looking at the time and noting that a range of issues were raised to which I would like to give a full and considered response at clause 1, I will sum up and commend the bill to the council.

Bill read a second time.