Kanganomics a Socio-Economic Assessment of the Commerical Kangaroo Industry

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Kanganomics a Socio-Economic Assessment of the Commerical Kangaroo Industry Kanganomics A socio-economic assessment of the commerical kangaroo industry The report Kanganomics: a socio-economic assessment of the commercial kangaroo industry has been published by the Centre for Compassionate Conservation based at the University of Technology, Sydney. The Compassionate Conservation approach breaks new ground in environmental policy and management through combining a consideration of animal welfare and conservation to improve conservation outcomes. The Centre is an innovative and multi-disciplinary collaboration comprised of academics from the Institute of Sustainable Futures, Faculty of Law, School of Environment, Business School and Associate Academics. The collaborative framework enables the Centre to engage with complex issues of wildlife management from multiple perspectives and modes of expertise. Please cite this report as: Boronyak, L., Ben-Ami, D., Croft, D., Ramp., D (2013) Kanganomics: a socio-economic assessment of the commercial kangaroo industry. Report by the Centre for Compassionate Conservation at the University of Technology, Sydney, March 2013. ACKNOWLEDGEMENTS The authors acknowledge the contributions of time, knowledge and expertise made to this report by the large group of people who have assisted in its research and refining. Thankyou to Dr Ken Henry who provided a review of the value and employment created by the commercial kangaroo industry to ensure the research framework was robust. The authors would also like to thank Dr. Neil Perry who provided an extensive review of the economic analysis in the paper. We are very grateful to the following organisations that provided data for the report- Australian Bureau of Agricultural and Resource Economics and Sciences, Department of Environment and Heritage Protection, the Office of Environment and Heritage, the Department of Environment and Conservation and the Department for Environment, Water and Natural Resources, NSW Food Authority, Primary Industries and Regions South Australia, Safe Food Queensland and the Rural Industries Research and Development Corporation. Thank you to Professor Stuart White and everyone at the Institute for Sustainable Futures for their ongoing support. This report has been made possible by financial support from the International Fund for Animal Welfare (IFAW) and the Sherman Foundation. We are grateful to Voiceless- the animal protection institute for its continued support. EXECUTIVE SUMMARY The kangaroos are iconic species. They embody the Australian spirit of uniqueness, resilience and adaptability to a harsh landscape. Kangaroos influence the health of different ecosystems by fertilising nutrient poor soils and spreading the seeds of native grasses and plants. They are also a key drawcard for international tourists visiting our shores. Despite these benefits provided by kangaroos, millions are killed to provide products such as meat for human or animal consumption, and hides and skins for the production of leather goods. This report provides a comprehensive analysis of the economics of the commercial kangaroo industry in Australia. The research explores the value of the industry to the Australian economy; the production process; direct employment; key trading countries and export earnings as well as an assessment of domestic demand. The key questions this report is seeking to answer include: • What are the key economic factors in the kangaroo industry? • What is the value of the kangaroo industry and its contribution to the Australian economy? • What impact has the loss of the Russian Federation market had on the commercial industry? • What is the level of employment provided by the commercial industry? • How many jobs are created by the commercial industry and what are the trends in employment? • How have domestic markets for kangaroo products changed over the last decade? • The amount of government funding that has been provided to the commercial kangaroo industry? Recently, the kangaroo industry has contracted due to a variety of economic factors. These factors include the loss of a key export market for meat products; weak international demand for kangaroo skin, hides and leather; a strong Australian dollar; competition with the mining sector for labour; variability of supply from extreme climatic fluctuations and consumer concern over meat hygiene and the welfare of kangaroos targeted by the commercial kangaroo industry. The kangaroo Industry Association of Australia (KIAA) has valued the worth of the industry at $280 (M). However it does not disclose the data sources nor the methods used to calculate the industry’s worth. From publically available data the researchers have calculated the combined value of production to be approximately $88.8 (M) in 2011-12. In 2009, the Russian Federation ceased the importation of kangaroo meat due to concerns surrounding hygiene and microbial contamination. This report will examine the relative socio- economic impact of the loss of this key market by assessing the impact upon export earnings and rural and regional employment. Exports are a key revenue-generating sector of the commercial kangaroo industry. In 2006-07, Australia exported about 72 per cent of the total supply of kangaroo meat, with a total export value of $34.3 million (M). The current value of kangaroo meat exports is approximately $21.7 M, more than half of its original value. This reduction in demand caused an excess supply of kangaroo meat that put downward pressure on the price paid to shooters for each 2 | Page kangaroo carcass. This resulted in shooters switching from full time to part time shooting or exiting the industry. The commercial kangaroo industry provides direct employment in rural and regional Australia. The key industry roles are shooters, field chiller operators and meat processing plant workers. Other roles include transport and logistics, export agents and employees of state regulatory bodies. According to KIAA, the kangaroo industry employs more than 4,000 full time persons. Since the industry is so small ABS does not have a separate category for employment provided by the industry. Therefore two methods have been used to determine employment, the first is a simple count commercial licenses, and the second method uses ABS input/output tables. Both methods yield different employment figures. The number of jobs provided could be as low as 880 if only direct full time jobs are considered or closer to 2,970 jobs if shooters and field chiller operators licences are counted which consists of full and part time employment and a further estimated 920 jobs in meat processing1. Greater clarity of employment data is needed to accurately determine the level of employment provided by the commercial kangaroo industry. Prior to 2008, the majority of kangaroo meat was supplied to pet-food markets. However, there has been a shift to supplying greater quantities of meat for human consumption. In 2011-12, Australians consumed approximately 7,000 tonnes (t) of kangaroo meat products. However, kangaroo meat makes a small contribution to the Australian diet with only a third of a kilogram consumed per capita per year compared to more popular meats such as poultry, with a per capita consumption of approximately 37.2 kg, or beef and veal with 34.1 kg consumed per capita per year. The commercial kangaroo industry is regulated by both the Federal and State Governments and their agencies. The state agencies receive money from the issuing of commercial licences for each stage of production and from the sale of tags that need to be fixed to each kangaroo carcass. Since 2006, it is estimated that over $3M worth of government funding subsidies has been allocated to research and development; marketing and promotion and expanding access to new export markets for kangaroo products. 1 The authors were unable to access employment data for meat processing plants and it is unknown if these plants process other types of game meats- Emu, wild boar etc. 3 | Page CONTENTS EXECUTIVE SUMMARY ........................................................................................................................ 2 CONTENTS ............................................................................................................................................ 4 ABBREVIATIONS .................................................................................................................................. 6 REPORT STRUCTURE ............................................................................................................................. 7 SECTION 1: THE COMMERCIAL KANGAROO INDUSTRY ................................................................ 8 SECTION 2: SUPPLY OF KANGAROO PRODUCTS ........................................................................ 13 KANGAROO PRODUCTS ........................................................................................................................ 13 THE PRODUCTION PROCESS ................................................................................................................ 14 SUPPLY OF KANAGROO MEAT ............................................................................................................... 15 Determinants of supply ................................................................................................................. 16 SECTION 3: DOMESTIC AND INTERNATIONAL DEMAND FOR KANGAROO PRODUCTS ......... 19 DOMESTIC CONSUMPTION OF KANGAROO MEAT ...................................................................................
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