review of kangaroo fauna dealer wholesaler licensing in …€¦ · figure 2national estimated red...

RReevviieeww ooff KKaannggaarroooo FFaauunnaa DDeeaalleerr WWhhoolleessaalleerr

LLiicceennssiinngg iinn NNSSWW

Prepared for:-

Western Directorate

NSW National Parks and Wildlife Service

Dubbo, NSW

Prepared by:-

December 2003

EconSearch Pty Ltd

Review of Kangaroo Fauna Dealer Wholesaler Licensing in NSW

Macarthur Agribusiness & EconSearch, 2003

DISCLAIMER

In accordance with our standard practice, our "report/advice" is solely for the use of the party

to whom it is addressed. We take no responsibility to any third party who relies on the whole

or any part of our "report/advice" unless authorised by us in writing to so use the

"report/advice".

The enclosed "report/advice" has been prepared from information supplied to us by "our

client", NSW National Parks and Wildlife Service (NSW NPWS).

Our "report/advice" is prepared on the basis that full disclosure of all information and facts

which may affect our "report/advice" has been made to ourselves, and we can not accept any

liability or responsibility whatsoever for the "report/advice" unless such full disclosure has

been made.

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circular or document to a third party without our prior approval of the form or context in

which it appears.

Macarthur Agribusiness & EconSearch Pty Ltd

December, 2003



Table of Contents

LIST ABBREVIATIONS ...................................................................................................................................... i

1 INTRODUCTION......................................................................................................................................... 1

2 OVERVIEW OF THE NSW KANGAROO INDUSTRY ......................................................................... 2

2.1 MANAGEMENT OF NSW KANGAROO POPULATIONS ............................................................................. 2

The NSW Kangaroo Management Program 2002-2006 ................................................................................ 2

Direct Monitoring of Kangaroo Populations................................................................................................. 4

Background to Kangaroo Populations .......................................................................................................... 4

Determination of Commercial Quotas ........................................................................................................... 5

Special Quota................................................................................................................................................. 6

Indirect Monitoring of Kangaroo Populations .............................................................................................. 6

Current Licensing Arrangements to Manage the Commercial Harvest of Kangaroos .................................. 7

The NSW Kangaroo Management Plan Administrative Appeals Tribunal Decision..................................... 8

2.2 THE NSW COMMERCIAL KANGAROO INDUSTRY IN HISTORICAL PERSPECTIVE ................................... 9

The Origins of the Commercial Kangaroo Industry ...................................................................................... 9

Factors Influencing Commercial Considerations in the NSW Kangaroo Industry........................................ 9

Pet Food Market .......................................................................................................................................... 12

Human Consumption of Kangaroo Meat in NSW ........................................................................................ 13

Kangaroo Skin Industry in NSW .................................................................................................................. 13

2.3 THE REGULATORY FRAMEWORK FOR THE OPERATION OF THE NSW KANGAROO INDUSTRY............. 14

2.4 STATISTICAL OVERVIEW OF THE NSW KANGAROO INDUSTRY........................................................... 14

Relativity of Kangaroo Population, Quota and Commercial Take .............................................................. 14

Kangaroo Management Zone Coverage ...................................................................................................... 15

Relative Market Share Across the Existing Fauna Dealer Wholesalers ...................................................... 18

3 COMPARISONS OF FAUNA DEALER LICENSING IN NSW AND OTHER AUSTRALIANSTATES ....................................................................................................................................................... 19

3.1 CURRENT FAUNA DEALER LICENSING ARRANGEMENTS IN NSW ....................................................... 19

3.2 FAUNA DEALER LICENSING IN QUEENSLAND AND SOUTH AUSTRALIA............................................... 21

Queensland .................................................................................................................................................. 21

South Australia ............................................................................................................................................ 23

4 OVERVIEW OF THE ECONOMIC THEORY CONCERNING WILD RESOURCE BASEDINDUSTRIES .............................................................................................................................................. 24

4.1 INTRODUCTION.................................................................................................................................... 24

4.2 FISHERIES ECONOMICS........................................................................................................................ 24

4.3 KANGAROO HARVEST ECONOMICS ..................................................................................................... 28



5 NATURAL RESOURCE MANAGEMENT ISSUES IN OTHER AUSTRALIAN WILD CATCHINDUSTRIES .............................................................................................................................................. 33

5.1 NORTHERN PRAWN FISHERY (NPF) .................................................................................................... 33

Management Objectives............................................................................................................................... 34

Resource Management Problems................................................................................................................. 34

Current Management Arrangements ........................................................................................................... 35

Season and Area Closures ........................................................................................................................... 36

Native Title................................................................................................................................................... 36

Aboriginal Land........................................................................................................................................... 37

Closed Seas and Areas................................................................................................................................. 37

Sacred Sites.................................................................................................................................................. 37

Compliance and Enforcement...................................................................................................................... 37

Other Management Issues............................................................................................................................ 38

5.2 SOUTHERN BLUEFIN TUNA.................................................................................................................. 40

Industry Overview........................................................................................................................................ 40




5.3 SOUTH AUSTRALIAN NORTHERN ZONE ROCK LOBSTER FISHERY....................................................... 41

Industry Overview........................................................................................................................................ 41




Other Management Issues............................................................................................................................ 43

5.4 COMPARATIVE ANALYSIS OF KANGAROO, PRAWN, TUNA AND ROCK LOBSTER SYSTEMS................. 44

6 OUTCOMES OF THE STAKEHOLDER CONSULTATIONS UNDERTAKEN DURING THEREVIEW OF THE CURRENT NSW FAUNA DEALER WHOLESALER LICENSING SYSTEM. 46

6.1 THE CONFLICTING OBJECTIVES INHERENT IN MANAGEMENT OF THE KANGAROO MANAGEMENT PLAN

AND FDW LICENSING ........................................................................................................................ 46

6.2 KEY ISSUES RAISED IN CONSULTATION .............................................................................................. 46

7 DEVELOPMENT AND ANALYSIS OF ALTERATIVE FAUNA DEALER WHOLESALERLICENSING POLICY OPTIONS............................................................................................................. 55

7.1 OPTION 1: BUSINESS AS USUAL .......................................................................................................... 56

7.2 OPTION 2: BUSINESS AS USUAL WITH ENDORSEMENT OF SUB-LICENCES............................................ 57

7.3 OPTION 3: BUSINESS AS USUAL WITH FULLY TRADEABLE LICENCES, NO SUB-LICENSING................. 57

7.4 OPTION 4: BRING ALL SUB-LICENCES UP TO FULL LICENCE STATUS AND CAP NUMBER OF LICENCES

SUBJECT TO PERIODIC REVIEW........................................................................................................... 58

7.5 OPTION 5: NO LICENCES AND NO COMMERCIAL UTILISATION OF THE TAKE...................................... 59

7.6 OPTION 6: OPEN LICENSING OF FAUNA DEALER WHOLESALERS ........................................................ 60

7.7 INDIVIDUAL TRANSFERABLE QUOTAS................................................................................................. 61



7.8 SUMMARY OF ALTERNATIVE LICENSING POLICY OUTCOMES ............................................................. 61

Consequences of a Possible Deregulation Scenario in NSW....................................................................... 64

7.9 THE TRANSITION TO AN IMPROVED FDW LICENSING SYSTEM .......................................................... 65

8 REFERENCES............................................................................................................................................ 68

ATTACHMENTS................................................................................................................................................ 70



List of Figures

FIGURE 1 NSW KANGAROO MANAGEMENT ZONES............................................................................................. 3

FIGURE 2 NATIONAL ESTIMATED RED AND GREY KANGAROO POPULATION ESTIMATES, QUOTA AND HARVEST

FIGURES 1981-2002 ........................................................................................................................... 10

FIGURE 3 NSW RED KANGAROO QUOTA AND NUMBER HARVESTED................................................................ 10

FIGURE 4 NSW EASTERN GREY KANGAROO QUOTA AND NUMBER HARVESTED.............................................. 11

FIGURE 5 NSW WESTERN GREY KANGAROO QUOTA AND NUMBER HARVESTED............................................. 11

FIGURE 6 NSW EURO/WALLAROO QUOTA AND NUMBER HARVESTED............................................................. 11

FIGURE 7 NSW TOTAL KANGAROO QUOTAS AND TOTAL KANGAROOS HARVESTED........................................ 12

FIGURE 8 LONG RUN REVENUE AND COST CURVES FOR A FISHERY .................................................................. 25

FIGURE 9 LONG RUN REVENUE AND COST CURVES FOR A COMMERCIALLY HARVESTED KANGAROO

POPULATION....................................................................................................................................... 28

FIGURE 10 LONG RUN REVENUE AND COST CURVES FOR A COMMERCIALLY HARVESTED KANGAROO

POPULATION: IMPACT OF LOWER PRICES........................................................................................... 30

FIGURE 11 SUGGESTED TRANSITION TO AN IMPROVED BETTER MANAGED FAUNA DEALER WHOLESALER

LICENSING SYSTEM ............................................................................................................................ 65

List of Tables

TABLE 1 NSW KANGAROO MANAGEMENT PROGRAM FLOW CHART................................................................. 7

TABLE 2 PET CARE CO-OP PRODUCT TYPE AND VALUE OF SALES (1997 & 2001)........................................... 13

TABLE 3 MAIN ACTS AND REGULATIONS COVERING THE KANGAROO INDUSTRY IN NSW .............................. 14

TABLE 4 NSW KANGAROO TAKE RELATIVE TO QUOTA AND POPULATION JANUARY 1 2002 –31 DECEMBER

2002 ................................................................................................................................................... 16

TABLE 5 2003 NSW KANGAROO MANAGEMENT PROGRAM – TAG ALLOCATIONS TO OCTOBER 15 2003...... 17

TABLE 6 DISTRIBUTION OF TAKE BY MANAGEMENT ZONE BY NSW LICENSED FAUNA DEALER WHOLESALERS

2002 - 2003........................................................................................................................................ 18

TABLE 7 FEE STRUCTURE FOR KMP AS APPROVED FOR 1 JAN 2000 ................................................................ 19

TABLE 8 CURRENT NSW FAUNA DEALER WHOLESALER LICENSEE OPERATORS............................................. 20

TABLE 9 NSW RESTRICTED FAUNA DEALER LICENCE HOLDERS.................................................................... 20

TABLE 10 COMPARATIVE ANALYSIS OF KANGAROO, PRAWN, TUNA AND ROCK LOBSTER SYSTEMS ................ 45

TABLE 11 SUMMARY OF LICENSING OPTIONS..................................................................................................... 63



i

LLiisstt AAbbbbrreevviiaattiioonnss

AFMA Australian Fish Management Authority

AFZ Australian Fisheries Zone

CCSBT Commission for the Conservation of Southern Blue Fin Tuna

CPUE Catch Per Unit Effort

FDW Fauna Dealer Wholesalers

ITQ Individual Transferable Quota

KIAA Kangaroo Industries Association of Australia

KMP Kangaroo Management Plan

KMZ Kangaroo Management Zone

NPF Northern Prawn Fishery

NPFAC Northern Prawn Fishery Advisory Committee

NSW NPWS NSW National Parks and Wildlife Service

NZRLF New Zealand Rock Lobster Fishery

QPWS Queensland Parks and Wildlife Service

RIRDC Rural Industries Research and Development Corporation

RFD Restricted Fauna Dealer License Holders

SARDI South Australian Research and Development Institute

SBT Southern Bluefin Tuna

SFR Statutory Fishing Rights

TAC Total Allowable Catch



1

11 IINNTTRROODDUUCCTTIIOONN

This report was commissioned by the NSW National Parks and Wildlife Service (NSW

NPWS) to review the licensing of Fauna Dealer (kangaroo) Wholesalers (FDW) under section

124 of the National Parks and Wildlife Act 1974. Although the policy restricting the number

of FDW to eleven has been in place since the 1980s the rationale for this policy is not clearly

recorded nor has it been reviewed for some time. The Kangaroo Industries Association of

Australia (KIAA) which represents the majority of FDW requested that the policy be

reviewed and modernised in a letter to the Minister of the Environment. This review is the

outcome of that request.

Requests to remove the policy restricting the number of FDW have been regularly received by

the NSW NPWS. The rationale for most of these requests is that competition in the industry

is being restricted. As a result, either pest mitigation objectives or marketing opportunities are

not being fully exploited, or both, and the full value of kangaroos is not being realised. The

existing FDW maintain that because of a commercial quota that ultimately limits the size of

the industry, there are only a limited number of dealers processing that limited resource. They

also claim that the current policy encourages investment in infrastructure and the increasing

human consumption and carcass take is evidence of that investment.

Hence the aim of this report is to review the current policy in NSW, suggest whether the

current policy should be maintained and propose at least three alternatives for FDW licensing

for consideration in priority order. Any alternative licensing arrangements suggested need to

comply with the objectives of the Kangaroo Management Program (KMP), the National Parks

and Wildlife Act 1974 and any relevant State or Commonwealth legislation to ensure those

recommendations are legally sound.



2

22 OOVVEERRVVIIEEWW OOFF TTHHEE NNSSWW KKAANNGGAARROOOO IINNDDUUSSTTRRYY

22..11 MMaannaaggeemmeenntt ooff NNSSWW KKaannggaarroooo PPooppuullaattiioonnss

The NSW Kangaroo Management Program 2002-2006

� NSW NPWS manage the quota based kangaroo harvest in NSW satisfying the

requirements of the Environment Protection and Biodiversity Conservation Act 1999.

Management of the quota is by way of a Kangaroo Management Program. The current

program has a five year life from 1 January 2002 to 31 December 2006.

� The management program is restricted to the wild take of the Red Kangaroo (Macropus

rufus), the Western Grey Kangaroo (Macropus fulinginosus), the Eastern Grey

Kangaroo (Macropus giganteus) and Wallaroo (Macropus robustus robustus).

� The primary goal of the program is to ensure that the taking of kangaroos is ecologically

sustainable. This is achieved by the application of best available scientific knowledge,

best practice and monitoring of outcomes to ensure the sustainability of kangaroos is not

compromised by any action undertaken in accordance with the program.

� In 2003 the annual quota was set at 2,107,720 representing 13.8% of the estimated NSW

population. In 2004 the proposed quota is 1,341,139. Traditionally, the size of the

kangaroo population is volatile and commercial take has been less than the total quota

available for commercial harvest. Quota is not set with respect to prevailing market

conditions for commercial kangaroo products.

� The NSW Kangaroo Management Program 2002-2006 details the arrangements and

relationships between the stakeholders for the ecologically sustainable adaptive

management and harvest of the kangaroo resource. Harvest management occurs within

annual quota limits (13-15% of estimated populations) set on the basis of best available

scientific knowledge.

� Four species of kangaroos are commercially harvested in 11 Kangaroo Management

Zones (KMZs) (Figure 1). The operations of the various players are controlled by the

National Parks and Wildlife Act 1974 with licences issued to landholders (occupiers

licence), shooters (trappers licence), fauna dealers (fauna dealer wholesalers licence),

kangaroo skin processors and traders (skin dealers licence) and export and importer



3

licences for kangaroo products exported overseas. There is also a provision for

kangaroos to be culled under damage mitigation situations under non-commercial

section 121 Occupiers Licences.

Figure 1 NSW Kangaroo Management Zones

Source: NSW NPWS, 2003

� The disparity between available quota and commercial take creates friction between

stakeholders especially in times of large kangaroo populations, drought or good market

conditions or a combination of all these scenarios. FDW will only process kangaroos for

which they have markets while landholders would sometimes prefer to see full quota

utilisation in an effort to reduce kangaroo populations and subsequent grazing pressure

on their properties. There is a perception, real or otherwise, by people without

investment in the kangaroo industry that the commercial arrangements in NSW are a

“closed shop” with regular calls to open up the industry to new players. Such a situation

currently exists with drought and large visible kangaroo populations.



4

� The fauna dealer wholesaler licences issued under section 124 of the National Parks and

Wildlife Act 1974 has been restricted since the 1980s. The rationale for the restriction

on fauna dealer licences is not clearly recorded nor has it been reviewed for some time.

Direct Monitoring of Kangaroo Populations

The NSW kangaroo population is closely monitored and quota is based on the scientific

assessment of those kangaroo populations. There are three techniques that may be used for

direct monitoring of kangaroo populations.

1. Broad-scale aerial surveys using fixed-wing aircraft (fixed strip-width transect survey

methodologies).

2. Medium / small-scale surveys using a helicopter (line transect survey methodology)

primarily in areas not suitable for fixed-wing surveys, e.g. Barrier Ranges.

3. Small-scale surveys conducted on foot (line transect survey methodology).

Kangaroo population estimates obtained from direct monitoring are used as the basis of

commercial quotas approved annually by the Commonwealth. Quota adjustments are based

on the most recent population estimate and, therefore accounts for all kangaroo mortalities

including those unrelated to commercial use. Full details of survey techniques and data

analysis protocols are contained in the annual kangaroo commercial quota application

submitted to the Commonwealth. Further details can be found on the Australian

Government’s Department of Environment and Heritage website at www.deh.gov.au.

Background to Kangaroo Populations

Kangaroos have been shot commercially and non-commercially in NSW since the 1800s and

bounties were sometimes available. Kangaroos were commercially used for skins-only up

until the early 1960s when the kangaroo meat industry commenced.

The four commercially utilised kangaroo species are widespread and abundant in NSW. The

2003 population estimate for kangaroos in commercial Kangaroo Management Zones (KMZs)

was 8,056,259. Much is known about the biology of kangaroos including their habitats,

distributions, diets and reproduction, and this knowledge is improving. The reproductive

biology of kangaroos has been researched extensively. While there are variations between the

http://www.deh.gov.au/



5

kangaroo species (e.g. gestation period, lactation period and interval between young), these

differences are relatively well understood and accounted for in determining the annual quota

for each species. In addition, there is abundant information from direct (periodic) and indirect

(continuous both temporally and spatially) monitoring of kangaroos.

The commercial take of kangaroos in KMZs varies within zones and over time. Even within a

single property, the rate of take can vary from zero (un-shot areas) to areas being heavily

utilised. Kangaroos may move between areas of different utilisation rates. In heavily wooded

areas, the take can be restricted to the established property tracks only, resulting in the use of

relatively thin strips of land through the property. In other areas the entire property may be

easily accessible and fully utilised.

Generally, commercial utilisation of kangaroos will be biased towards larger animals and

therefore males. Historically, the commercial take in NSW has been male biased. Kangaroo

mortality during drought is also male biased, and female biased populations in un-shot areas

have been observed. Kangaroos are polygamous and females will mate with available males.

In a female biased population (due to commercial use), with favourable seasonal conditions

almost all females will have pouch young.

Results of aerial surveys, since the mid-1980s, show that kangaroo populations fluctuate,

primarily in response to seasonal conditions. However, epidemic mortalities of kangaroos

have been recorded, usually following flooding rain. Reports based on aerial surveys suggest

significant short-term reductions in populations, greater than 50%, have occurred in some

areas.

Determination of Commercial Quotas

The commercial quota for a species is the maximum number of the species that can be utilised

commercially in a calendar year. Quotas are set for each species in specific KMZs, (see

Figure 1 for current KMZs). Any changes to the commercial KMZ boundaries are advertised

on the NSW Kangaroo Management Program web page and described in the annual kangaroo

quota application to the Commonwealth.



6

Each Occupier’s Licence for the commercial use of kangaroos specifies the number of each

species that can be taken (Table 1). When the quota for a species has been reached in a KMZ,

no additional Occupier’s Licences will be issued to permit further commercial utilisation of

that species in that KMZ. Unless undertaken as part of an approved adaptive management

experiment, commercial quotas are set at approximately 15% of population estimate for

Eastern Grey Kangaroos, Western Grey Kangaroos and Wallaroos and 17% of population

estimate for Red Kangaroos. However, quotas are determined considering the most recent

scientific information available and can be adjusted annually. Based on the population

dynamics of the kangaroos, quotas set at 15 – 17% are considered sustainable in the long-

term.

Special Quota

Special Quota for commercial KMZs will be sought in the annual commercial quota

application to the Commonwealth. This is not a pseudo commercial quota. Its sole purpose is

to provide for commercial utilisation of kangaroos that would be shot and left in the field

under the normal non-commercial licensing system. Special Quota therefore minimises the

number of kangaroos shot under non-commercial licences. The Special Quota is only used

when the commercial quota for a particular KMZ has been fully issued. The use of Special

Quota depends on one or more of the following:

� Climatic trends and local conditions;

� Exceptional circumstance declarations; and

� Kangaroo population trends.

A report on use of the Special Quota is provided to the Commonwealth each year.

Indirect Monitoring of Kangaroo Populations

Indirect data on kangaroo populations are obtained continuously from kangaroo industry

returns. Commercial returns monitor the number of each species taken and also include

carcass weights, sex and location. This information is collated and retrieved at a variety of

geographic sites. The relationship between these parameters and kangaroo populations is

being investigated as part of ongoing research in a collaborative investigation between the



7

conservation agencies responsible for kangaroo management in three states (NSW, Qld, and

SA), and external independent scientists.

Table 1 NSW Kangaroo Management Program Flow Chart

Current Licensing Arrangements to Manage the Commercial Harvest of Kangaroos

Only licensed fauna dealer wholesalers can purchase and process kangaroos harvested under

the KMP. Under the current NSW NPWS policy these licences are limited to eleven.

However, Restricted Fauna Dealer Licence holders (RFD) can also purchase kangaroos from a

FDW and process them. Until 1995 there were also specific regional limits on FDW

operations based on the management zones in operation at that time, ie only specific

Landholder applies to NPWS for Occupier’s Licence to shoot kangaroos

Landholder nominates person licensed under section 123 (Trapper’s Licence) to shoot commercially

Landholder nominates non-commercial shooting

Non-Commercial Shooting (State Wide)

Occupier’s Licence (s.121) issued by authorised NPWS officer

• Cloth tags are issued with licence

• Landholder (or person nominated by landholder and licensed under s.120 or s.123) shoots kangaroos

• Kangaroos can not be sold

• Kangaroos can be used by the landholder

The Commercial System (Commercial Zones Only)

• Occupier’s Licence (s.121) issued by authorised NPWS officer

• Number of each species authorised to be shot must be within quota

• Plastic tags issued with licence (Regulation)

• Holder of Trapper's Licence (s.123) shoots kangaroos

• Trapper attaches tags to kangaroos

• Trapper can store kangaroos temporarily at a site registered under s.120 of the Act

• Trapper delivers kangaroo to premises registered by Fauna Dealer (Wholesaler) under s.124 of the Act

• Fauna Dealer (Wholesaler) transports kangaroos to registered premises (in NSW or interstate) for processing or

sells to another Fauna Dealer

• Skin removed and meat processed

• Kangaroo skin processed at registered premises by Skin Dealer under s.125 of the Act

• Tag removed during processing of skin

• Whole carcasses and skins, processed meat and processed skins can be exported from NSW or imported into NSW

under s.126 of the Act



8

authorised FDW could purchase kangaroos from trappers in particular management zones.

After 1995 these restrictions were removed so that FDW can currently register premises and

purchase from trappers at any location they desire. New players wanting to enter the

commercial industry can purchase an existing licence by negotiation with existing licence

holders. New operators obtain licences this way at the rate of approximately one licence per

year.

The NSW Kangaroo Management Program Administrative Appeals Tribunal Decision

The current Kangaroo Management Program has been challenged and passed scrutiny by the

Administrative Appeals Tribunal (Judgement No.N2002/286) on 13 March 2003. The

Tribunal found that “the tribunal affirms the decision of the Minister for the Environment and

Heritage to declare that the Kangaroo Management Plan to be an approved Management

Program for the purposes of the Wildlife Protection (Regulations of Exports and Imports) Act

1982”. Consequently, for the purposes of reviewing Fauna Dealer Licensing it is noted that

comment on the efficacy or otherwise of the KMP is beyond the scope of the terms of

reference of this review. This review relates to those aspects of the KMP that deal with fauna

dealer wholesaler licensing policy and the management of that policy. Those components are

as follows:-

(1) Management (Licensing) of Commercial Use- “Manage the utilisation of the four

kangaroo species in accordance with the provisions of the WP Act ( National Parks and

Wildlife Act) (which contains the framework for Licensing) and Regulation, NSW

Government policies, The Code of Practice for the Humane Shooting of Kangaroos and

this management program”; and

(2) Monitor Industry Compliance – “Monitor the kangaroo industry to ensure compliance

with this management program, licence conditions, the requirements of the WP Act

(National Parks and Wildlife Act) and Regulation and the Code of Practice for the

Humane Shooting of Kangaroos”.



9

22..22 TThhee NNSSWW CCoommmmeerrcciiaall KKaannggaarroooo IInndduussttrryy IInn HHiissttoorriiccaall PPeerrssppeeccttiivvee

The Origins of the Commercial Kangaroo Industry

The origins of the modern kangaroo meat industry occurred in 1959 in response to European

buyers wishing to import the meat for distribution to the local game meat market (Ramsay,

1994). At that time there were no government regulations controlling the commercial

shooting and processing of kangaroos. The export venture failed and kangaroo processors

then began to develop a domestic trade in kangaroo meat for pet food which now represents

about 80% of the domestic market usage of kangaroo meat.

Factors Influencing Commercial Considerations in the NSW Kangaroo Industry

From the perspective of shooters and game meat processors, kangaroos are only part of the

processing and marketing mix that constitutes the supply side of their business. Other key

components are the harvest of wild pigs and, sometimes, feral goats.

Demand for all carcase components from the commercial harvest of kangaroos (meat and

skins) tends to fluctuate with changes in the price of substitute products and consumer

preferences (Ramsay, 1994). A major influence on the supply of kangaroo products is the

variable patterns of local and regional rainfall. Drought tends to concentrate kangaroos on

water increasing the population density, making commercial shooting more viable as less

effort is required. Prolonged drought also decreases kangaroo skin and meat quality.

Widespread rainfall, on the other hand, disperses kangaroos and can restrict heavy vehicle

access, making it more difficult for shooters to access kangaroos increasing hunting time.

Fauna dealer wholesalers and processors therefore, manage supply volatility by using a

number of options including ranging across a wider geographic area, accessing supply from

interstate or by stockpiling some product in the case of the meat processors and skin

processors. The net result is that commercial take is rarely equal to quota and quota is

significantly less than the total estimated kangaroo population as shown in the following

graph of kangaroo populations and commercial take in Australia (Figure 2). A similar pattern

for available quota and actual take occurs in NSW.



10

Figure 2 National Estimated Red and Grey Kangaroo Population Estimates,Quota and Harvest Figures 1981-2002

National Graph

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,00022,000,00024,000,00026,000,00028,000,00030,000,00032,000,00034,000,00036,000,00038,000,00040,000,00042,000,00044,000,00046,000,00048,000,00050,000,00052,000,00054,000,000

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Population Estimate - Red and Grey Kangaroos

Quota - Red and Grey Kangaroos

Harvest Figures - Red and Grey Kangaroos

Source: Environment Australia, 2003

Figures 3 to 7 show 16 years of NSW commercial kangaroo quota and harvest data by species

and year. During the 16 year timeframe the difference between quota and number harvested

varies for all species across the years. 1996 is of particular interest in that the total number of

kangaroo harvested as a proportion of quota reached a peak, with the number of Red

Kangaroos harvested exceeding the quota.

Figure 3 NSW Red Kangaroo Quota and Number Harvested

0200400600800

1,0001,200

1987

1989

1991

1993

1995

1997

1999

2001

2003

Head

('00

0)

-10%10%30%50%70%90%110%

Harv

est/Q

uota

Rat

io

NSW Red Kangaroo Quota NSW Red Kangaroos HarvestedHarvest/Quota Ratio




11

Figure 4 NSW Eastern Grey Kangaroo Quota and Number Harvested

0200400600800

1,0001,2001,400

1987

1989

1991

1993

1995

1997

1999

2001

2003

Head

('00

0)

0%

20%

40%

60%

80%

100%

Harv

est/Q

uota

Rat

io

NSW Eastern Grey Quota NSW Eastern Greys HarvestedHarvest/Quota Ratio


Figure 5 NSW Western Grey Kangaroo Quota and Number Harvested

050

100150200250300350

1987

1989

1991

1993

1995

1997

1999

2001

2003

Head

('00

0)

0%

20%

40%

60%

80%

100%

Harv

est/Q

uota

Rat

io

NSW Western Grey Quota NSW Western Greys HarvestedHarvest/Quota Ratio


Figure 6 NSW Euro/Wallaroo Quota and Number Harvested

05

10152025303540

1989

1991

1993

1995

1997

1999

2001

2003

Head

('00

0)

0%

20%

40%

60%

80%

100%

Harv

est/Q

uota

Rat

io

NSW Euro/Wallaroo Quota NSW Euro/Wallaroo HarvestedHarvest/Quota Ratio




12

Figure 7 NSW Total Kangaroo Quotas and Total Kangaroos Harvested

0

500

1,000

1,500

2,000

2,500

1987

1989

1991

1993

1995

1997

1999

2001

2003

Head

('00

0)

0%

20%

40%

60%

80%

100%

Harv

est/Q

uota

Rat

io

NSW Commerical Harvest Quotas NSW Kangaroos HarvestedHarvest/Quota Ratio


Pet Food Market

Rural Industries Research and Development Corporation (RIRDC) undertook a study into the

pet food industry in 2002 with particular emphasis on the role of kangaroo meat in the pet

food sector. Some of the key findings of the study (RIRDC, 2003) were:-

� The sales of fresh pet meat were calculated at 20-30,000 tonnes of kangaroo meat plus

and 4,000 tonnes of dairy cadavers per annum. It was felt these figures had remained

constant over the several years to 2002.

� The pet meat market absorbs over 75% of the volume of kangaroos harvested each year.

� The on-going financial viability of the pet food market is therefore critical to the

continuing success of the KMP and its efforts to control the total grazing pressure of

kangaroos in the arid rangelands.

� Export sales were reported to be negligible. There used to be good sales to pet food

manufacturers overseas, however the negative publicity associated with the kangaroo

harvest have caused those markets to contract. Furthermore, chicken is available as a

very cheap alternative. There is a small niche market for kangaroo meat to zoos for

caged big cats because the meat is lean (2% fat content). However, the zoo market is a

low price, low volume market.



13

While the volume of fresh meat in the pet food market was relatively constant over the period

1997 to 2001, the retail dollar sales of pet food trended strongly towards dry food, particularly

the premium varieties. To some extent this was a result of the heavy promotion by pet food

manufacturers. For example, Pet Care Co-Op noted their market mix and dollar sales had

changed as shown in Table 2.

Table 2 Pet Care Co-op Product Type and Value of Sales (1997 & 2001)

1997 2001 Fresh meat 41% 18% Dry Food 48% 60% Tinned Food 10% 22% Source: RIRDC, 2003

Although these results are from only one group of pet shops, they are an indicator of the

significant change that has been taking place in the market. While the volume of fresh pet

meat sales has been steady, more and more consumers appear prepared to purchase the higher

priced dry and canned products. Unless something is done to reverse this trend, sales of fresh

pet meat will inevitably begin to fall and retailers will become less inclined to stock the

product. The task of doing something about this rests firmly at the feet of the pet meat

suppliers, in effect the kangaroo industry. Recently, this challenge has been met with pre-

packaged kangaroo pet food being stocked on supermarket shelves in NSW.

Human Consumption of Kangaroo Meat in NSW

Household consumption of kangaroo game meat in NSW has remained relatively flat since

restrictions on sales for human consumption were lifted in mid 1992. Industry players are

working hard on marketing programs to increase public acceptance. They acknowledge it will

require a long-term commitment to marketing and promotion to have kangaroo widely

accepted as a meat of choice by red meat consumers.

Kangaroo Skin Industry in NSW

From discussions with FDW licence holders, it is clear that kangaroo skins are the mainstay of

profitability for the kangaroo processing industry. Since the cessation of skin-only shooting,

skins are removed in processing works and either salted or pickled and then enter the tanning



14

process either in domestic or export leather or fur-on markets. Depending on supply and

prevailing market conditions, values for large, medium and small skins can vary widely.

Kangaroo skins from NSW are highly regarded for quality.

22..33 TThhee RReegguullaattoorryy FFrraammeewwoorrkk ffoorr tthhee OOppeerraattiioonn ooff tthhee NNSSWW KKaannggaarroooo IInndduussttrryy

The main Acts and Regulations covering the kangaroo industry in NSW are shown in the

following table (Table 3):-

Table 3 Main Acts and Regulations Covering the Kangaroo Industry in NSW

Act or Regulation Intent

National Parks and Wildlife Act1974 and Regulations 2000

Control of NSW macropod harvest. All macropodscommercially traded must be legally taken in accordance withthis Act. Landholders may be issued with occupier’s licencefor control of macropods on their property.

Food Production (Safety) Act1998; Food Production MeatFood Safety Scheme) Regulation2000

Govern the licensing of abattoirs in NSW. Act relates to meatdestined for human and pet consumption. It considersconstruction, hygiene standards, and industry capacity.

Commonwealth Export MeatOrders 1985

Regulations provide stringent standards for harvesting,processing and inspection of game meat.

Firearms Act 1996 Licensing shooters and carriage of firearms.

Protection of the EnvironmentOperations Act 1997

Rendering plants producing in excess of 50 tonnes of tallow orfat are classed as ‘scheduled premises’ and therefore must belicensed and must not exceed the prescribed levels of airpollution.

22..44 SSttaattiissttiiccaall OOvveerrvviieeww ooff tthhee NNSSWW KKaannggaarroooo IInndduussttrryy

This section overviews the population quota and harvest of the commercially taken kangaroo

species in NSW and examines the NSW commercial kangaroo industry with respect to the 11

kangaroo management zones in more detail.

Relativity of Kangaroo Population, Quota and Commercial Take

Table 4 shows the time series analysis of relative kangaroo population, quota and commercial

take across the 11 kangaroo management zones in NSW. During this period actual overall

take for the four species of commercially harvested kangaroos was below the quota. NSW

regions where take equalled quota in this period were the Upper Hunter and Armidale for

Eastern Grey Kangaroos and Griffith for Western Grey Kangaroos. The total NSW kangaroo



15

population of the four commercially harvested species is minimally affected by the quotas and

resulting tag allocation. From 1 January 2002 to 31 December 2002 the total NSW

commercial take of Eastern Grey Kangaroos was 10% of the estimated population, with the

Upper Hunter KMZ experiencing the highest percentage commercial take (23%). The total

NSW commercial take of Red Kangaroos was 11% of the estimated population, Cobar KMZ

having the highest percentage population taken commercially (18%). The total NSW take of

Western Grey Kangaroos was 9% of the total population, with Griffith KMZ experiencing the

highest percentage of population taken commercially (16%). The total NSW commercial take

for Wallaroos represented just 3% of the population, with Broken Hill KMZ having the

highest percentage commercial take (7%).

Table 5 shows kangaroo tag allocation relative to quota and population from 1 January 2003

to 15 October 2003 for the four kangaroo species harvested in NSW by region according to

the 2003 NSW Kangaroo Management Program. Tag allocations are maintaining a long-term

trend to be below available quota and estimated population.

Kangaroo Management Zone Coverage

Table 6 shows the coverage by Fauna Dealer Wholesalers across the kangaroo management

zones in the State. Essentially all zones have some commercial presence with competition for

available kangaroo supply under quota limits. In the more remote zones there is also evidence

of competition for kangaroo supply. Commercial take pressure varies between years with

FDW operating in some zones in some years but not at other times. This operational pattern

was explained by current FDW as being in response to available markets and the relative ease

/ economics of take in those areas to enable business continuity and viability. Quota in most

years exceeds available markets for kangaroo meat and skins, as quota is not set with respect

to market demand factors.



16

Table 4 NSW Kangaroo Take Relative to Quota and Population January 1 2002 –31 December 2002

Zone Name E/Grey Red W/Grey WallarooQuota Take %q %p Quota Take. %q %p Quota Take %q %p Quota Take %q %p

Tibooburra 31,061 9,638 31% 4% 229,200 93944 41% 6% 10,639 6,322 89% 8% - - - -

Broken Hill 38,034 24,511 64% 8% 220,200 158,967 72% 11% 62,966 55,058 87% 11% 6,970 4,617 66% 7%

Lower Darling 23,418 19,310 82% 11% 50,000 49,568 99% 18% 46,710 43,987 94% 12% - - - -

Cobar 53,878 29,092 54% 7% 33,000 32,776 99% 17% 77,622 34,517 44% 6% - - - -

Bourke 114,675 52,804 46% 6% 72,900 55,693 76% 11% 37,525 10,575 28% 4% - - - -

Narrabri 190,479 172,663 91% 12% 79,800 54,547 68% 10% 721 46 6% 1% 2,240 1,760 79% 4%

Armidale 27,000 26,873 100% 15% - - - - - - - - 6,250 1,811 29% 1%

Coonabarabran 230,417 202,868 88% 11% 45,100 43,230 96% 14% 15,383 6,568 43% 6% 2,240 1,905 85% 4%

Griffith 121,500 121,275 100% 13% 50,250 50,131 100% 15% 26,500 26,440 100% 16% - - - -

Glen Innes 43,700 27,923 64% 10% - - - - - - - - 6,250 1,804 29% 1%

Upper Hunter 17,100 17,053 100% 23% - - - - - - - - 5,350 3,000 56% 3%

Totals 891,262 704,010 79% 10% 780,450 538,856 69% 11% 278,066 183,513 66% 9% 29,300 14,897 51% 3%

Source: NSW NPWS, 2003



17

Table 5 2003 NSW Kangaroo Management Program – Tag Allocations to October 15 2003

Zone Name No. E/Grey Red W/Grey Wallaroo

Quota Tag

Alloc. %q %p Quota Tag



Alloc. %q %p

Tibooburra 1 22,633 2,839 13% 1% 124,700 31,997 26% 4% 8,346 2,592 31% 3%

Broken Hill 2 61,477 12,208 20% 4% 166,950 60,695 36% 5% 76,523 20,988 27% 4%

Lower Darling 4 26,923 10,303 38% 6% 69,200 29,832 43% 6% 51,377 26,557 52% 8%

Cobar 6 46,956 21,623 46% 5% 38,600 25,534 66% 10% 67,977 20,551 30% 3%

Bourke 7 89,518 21,801 24% 2% 114,450 23,861 21% 3% 37,195 4632 12% 2%

Narrabri 8 247,091 151,412 61% 10% 103,950 27,669 27% 4% 2,240 2039 91% 5%

Armidale 9 34,621 32,195 93% 19% 6,250 2,922 47% 2%

Coonabarabran 10 339,313 190,584 56% 11% 51,300 31,741 62% 9% 35,698 7323 21% 6% 2,240 2,065 92% 5%

Griffith 11 158,288 82,939 52% 9% 35,200 29,773 85% 13% 36,153 16997 47% 11%

Glen Innes 13 39,955 33,695 84% 15% 6,250 3518 56% 3%

Upper Hunter 14 17,370 17,370 100% 18% 5,350 3,123 58% 3%

Totals 1,084,145 576,871 53% 9% 704,350 261,102 37% 6% 313,269 99370 32% 5% 22,330 13,667 61% 3%

Source: NSW NPWS, 2003. Note: Current to approx. Oct15 2003



18

Table 6 Distribution of Take by Management Zone by NSW Licensed FaunaDealer Wholesalers 2002 - 2003

KMZ Number of FDW Operating inZone 2002

Number of FDW Operating inZone 2003

Tibooburra 4 4 Broken Hill 7 7 Lower Darling 4 5 Cobar 5 5 Bourke 4 3 Narrabri 7 7 Armidale 3 3 Coonabarabran 6 7 Griffith 8 7 Glen Innes 3 4 Upper Hunter 4 4

Source: NSW NPWS , 2003

Relative Market Share Across the Existing Fauna Dealer Wholesalers

The largest four FDW in NSW handle approximately 75-80% of the commercial take. These

larger players service the human consumption and pet food sectors. The other seven FDW

handle 20-25% of the take and operate predominantly in the pet food sector. There is no

compulsion on any FDW to operate if commercial activity would lead to non profitable

operations. The level of activity of individual licence holders is also a reflection of the relative

investment players have in their processing and marketing systems. Like any business, FDW

have to secure an acceptable economic return for their investment. Therefore some players

will operate across a range of market sectors with varying degrees of value added product,

while others will choose to operate in either low cost commodity markets or highly

differentiated low volume niche markets. Irrespective of the market choice a FDW makes, it is

incumbent upon the licensing system to ensure there is a highly professional commercial

industry to process and market the commercial take at all times. Any action that would

jeopardise the existence and growth of viable commercial players would directly contravene

the objective of securing a sustainable economic return from the kangaroo resource base. The

demise of a viable commercial kangaroo industry would make the Kangaroo Management

Program inoperable.



19

33 CCOOMMPPAARRIISSOONNSS OOFF FFAAUUNNAA DDEEAALLEERR LLIICCEENNSSIINNGG IINN NNSSWW aanndd OOTTHHEERR

AAUUSSTTRRAALLIIAANN SSTTAATTEESS

33..11 CCuurrrreenntt FFaauunnaa DDeeaalleerr LLiicceennssiinngg AArrrraannggeemmeennttss iinn NNSSWW

Fauna dealer licensing regulation is contained within section 124 of the National Parks and

Wildlife Act 1974. Related licensing provisions for skin dealers licences come under section

125 of the National Parks and Wildlife Act 1974. The components of the relevant licensing

procedures have been previously discussed (Section 2.1). Licences are issued by an

authorised NSW NPWS officer. Each premises engaged in fauna dealer wholesaling or skin

dealing must be registered. Premises of restricted fauna dealers must also be registered. There

is a further tier of licensing, an import and export licence, which is covered under section 126

of the National Parks and Wildlife Act 1974.

The current licence fee structure approved under the NSW KMP is shown in the following

table:-

Table 7 Fee Structure for KMP as Approved for 1 Jan 2000

Item Fee Section 120 (General) Licence No charge Section 121 (Occupiers) Licence – Non-commercial No charge Section 121 (Occupiers) Licence –Commercial No Charge Section 123 ( Occupier Trapper )Licence $50 per year Section 123 (Professional Trappers) Licence $200 per year Section 124 (Fauna Dealer Wholesaler) Licence (includesprocessing works)

$1,000 per year

Section 124 (Fauna Dealer Wholesaler – Restricted) Licence(includes processing works)

$600 per year

Section 125 (Skin Dealer) Licence (includes processing works) $360 per year Meat retailers Licence $50 per year Registration of chiller premise (trapper or wholesaler) $240/premises/year Registration of premise (skin dealer) $180/premises/year Non-commercial tags No charge Commercial tags $80 per 100

The range of licence fees has been shown in the above table to demonstrate the relativity of

fees and charges for various aspects of operations under the Kangaroo Management Plan.

FDW obviously bear the highest individual licence cost. This fee level for FDW is an

effective means of ensuring that FDW have the financial means to pay licence fees and



20

operate, thus excluding those opportunistic, less financially viable operators who may want to

operate in a lower cost licence and perhaps less professional environment. Table 8 lists the 11

operators who are the current Fauna Dealer Wholesaler Licensees in NSW.

Table 8 Current NSW Fauna Dealer Wholesaler Licensee Operators

Licensee Location Red Gum Commodities Pty Ltd Broken Hill Murrumbar Pet Meat Dubbo Vacik Distributors Pty Ltd Sydney Walgett Game Meat Processing Pty Ltd Walgett Australian Meats Pty Ltd Dubbo Pet Care (Co-op) Pty Ltd Sydney Balranald Game Meat Trading Co Pty Ltd Balranald P&A Game Meats Pty Ltd Morven, Qld Stokari Pty Ltd Sydney David Stanborough Curlwaa Aussie Game Meats Pty Ltd Brisbane

The NSW Licensed FDW operate by purchasing kangaroos in NSW that have been harvested

under quota by licensed trappers. Those kangaroos are predominantly processed in NSW,

although some operators process NSW sourced kangaroos in other States, i.e. SA and QLD.

The following is a list of Restricted Fauna Dealer Licence Holders in NSW.

Table 9 NSW Restricted Fauna Dealer Licence Holders

Restricted Fauna Dealer Name Location V.O.R. Management Pty Ltd Cronulla Highland Pet food Guyra Brett Chambers Penrith Adrian Cridland Milparinka Master Game Meats Pty Ltd West Gosford

In NSW, in addition to restricted fauna dealer licence holders, some FDW allow other

operators to operate on their licence on a sub-licence basis. These sub-licensing arrangements

work where a non-licence holder approaches an existing licence holder to access a supply of

kangaroos from trappers for processing into pet meat, human consumption meat or skins. The

“fee” for operating under a sub-licence is either on a per head charge or the return of the skin



21

to the licence holder. These arrangements enable non-FDW licence holders to operate chiller

boxes and processing plants or to give access to interstate operators wanting to source NSW

kangaroos for their businesses, albeit under the provisions of a licensed FDW. This informal

system is in fact a de facto open system, over which the NSW NPWS has little control, apart

from the submission of returns by the principal licence holder.

33..22 FFaauunnaa DDeeaalleerr LLiicceennssiinngg iinn QQuueeeennssllaanndd aanndd SSoouutthh AAuussttrraalliiaa

The following includes an overview analysis of the fauna dealer licensing arrangements in

other States. Each State is bound by that State’s respective legislation pertinent to the

commercial take and marketing of kangaroos. The legislation differs significantly between the

States resulting in different kangaroo management plans/programs in each State.

Consequently, it is difficult to draw a direct comparison between the plans/programs.

However, Queensland and South Australia warrant comment given the different approaches

taken in those States and the impacts their plans have on the commercial kangaroo industry.

Queensland

Queensland made the decision in the mid 1990s to de-regulate fauna dealer wholesaler

licensing, principally in response to National Competition Policy imperatives. Now anybody,

provided they are a fit and proper person, can apply for a commercial wildlife licence. Once

the licence has been obtained, for a cost of $413.50 for each site, licensees can operate at an

unlimited number of registered sites across the State. It is important to note that Queensland

does not have a zone management system as in NSW. The quota still prevails but the

operation of the harvest and accompanying business and market dynamics sit outside the

conservation regulatory control of the Queensland Parks and Wildlife Service (QPWS). There

are some moves to facilitate mobile chiller registrations in the draft Macropod Harvesting

Conservation Plan which, if implemented, could see a further decrease in the number of

registered sites across the State. There is, however, industry opposition to this concept.

Consultations with industry players during the course of this review indicated that the impact

of this change in licensing policy initially saw an increase in the number of FDW but also an

increase in the failure rate of some commercial players when wrong market decisions were

made. The entry of new players, who were without access to market or were undercapitalised,



22

sought market share by increasing the offer price for kangaroos bought from trappers and

lowering market price for kangaroo products into the market. This approach has often

destabilised the market and when the new player fails the established players absorb the

components of the failed business into their own. The net effect is that the commercial

industry further rationalises and concentrates. However, not all new players fail and some new

players have gone on to establish viable businesses, opening and developing new market

sectors.

The deregulation of the market in Queensland also had a negative impact where well-meaning

government agencies supported non viable regional development projects. Rather than

provide support to existing players to expand or improve operations and find new markets,

development funds often went to new entrants to the industry without any previous sustained

commercial experience. These projects failed for a number of reasons including under

capitalisation and poor economic viability in pursuing poorly defined market potential that

failed to materialise. The overall effect of the government agency activity was to destabilise

the market.

Statistics indicate that there are now fewer kangaroos taken in Queensland relative to quota

availability since licence deregulation, and that there has been a concentration in industry

ownership. The QPWS is not overly concerned about market dominance. Instead, it sees

moves towards industry concentration as the market place at work. Business operators are

following traditional norms of consolidation and rationalisation to the point where there are

generally financially viable levels of capacity utilisation and sustained profitability of the

commercial stakeholders.

Queensland is also characterised by provisions for skin-only shooting. Skin-only shooting can

occur in the same area as carcase shooters but occurs predominantly in areas where it is

uneconomic or impractical to shoot and transport kangaroos for the pet food or human

consumption meat trade and to comply with food safety standards between time of kill and

chiller box receival. In recognition of the growth of the human consumption meat trade there

is an impending variation in licence to that of Commercial Wild Life Licence (Meat

Processor).



23

South Australia

The South Australian Kangaroo Management Plan is administered by the Department of

Environment and Heritage. The plan covers the common species of kangaroo that are

harvested under quota provisions including the Red Kangaroo, Western Grey Kangaroo and

Euro or Hill kangaroo. The SA equivalent of a NSW Fauna Dealer Wholesaler is a Kangaroo

Meat Processor and Kangaroo Skin Tanner. In SA the quota based harvest is managed on a

property-by-property based quota allocation and a system of licensed field processors

(shooters) operating on individual properties supplying meat processors. The landowner

makes the decision as to whether the kangaroo harvest will be commercial or non-commercial

in choosing to utilise or not utilise the commercial harvest authority. The landowner has to

nominate the meat processor who will service each property and the tags are sent to the meat

processor. The field processor negotiates with the processor where they can shoot and the

take is therefore dedicated to the processor controlling quota. This system has an inherent

problem in that some landowners do not want to or are not interested in selling quota which

results in low commercial takes. The focus of the SA Management Plan is on long-term

sustainable harvest of kangaroos within the State’s 31 regions, where regional quota

determinations are currently 20% of population for Red Kangaroos and 15% of population for

Western Grey Kangaroos and Euros. Kangaroo carcases imported to SA from Qld or NSW

have to be identified using import permits.

As in Queensland, the deregulation of the industry attracted new players who have sometimes

failed but not before there was a period of industry destabilisation. Following the failure of

these new players the industry has further rationalised and consolidated.



24

44 OOVVEERRVVIIEEWW OOFF TTHHEE EECCOONNOOMMIICC TTHHEEOORRYY CCOONNCCEERRNNIINNGG WWIILLDD

RREESSOOUURRCCEE BBAASSEEDD IINNDDUUSSTTRRIIEESS

44..11 IInnttrroodduuccttiioonn

This section examines the economic theory concerning wild resource based industries as a

basis for considering what future licensing options may be practical in the NSW context. In

the Australian context the various fisheries industries have been subject to extensive economic

analysis as authorities and industry attempt to resolve matters of quota setting and allocation

where full quota entitlements are generally taken and the wild based population is under

threat.

44..22 FFiisshheerriieess EEccoonnoommiiccss

A fishing ground that is open to all comers (open access) is likely to be overfished, sometimes

to the extent that the fishery collapses. Individual harvesters have an incentive to catch as

much as they can before someone else does. This is likely to lead to investment in boats and

fishing gear. The fishery will become over capitalised, resources such as fuel will be wasted

and any potential profits (including royalties or rents) will be dissipated. Hence we have the

dual environmental and economic problem.

Economic efficiency relates to both the use and the allocation of resources1. In the use of

resources, economic efficiency requires that any given output is produced at minimum cost

which implies that both waste and technical inefficiency are avoided. In the allocation of

resources, economic efficiency requires that it must not be possible to change the existing

resource allocation in such a way that someone is made better off and no one worse off. If

this is possible, the existing resource allocation must involve a waste.

In the context of the fishing industry, economic efficiency in the use of resources can be

explained with the aid of some simplified cost and revenue functions, as illustrated in Figure

8. As will be discussed in the following section, this analytical framework can be applied to

kangaroo harvesting.

1 These are the factors of production used in an economy to produce and distribute goods and services. They

are conventionally classified into land, labour and capital, where ‘land’ includes natural resources includingmarine resources.

Review of Kangaroo Fauna Dealer Wholesaler Licensing in NSW 25

Figure 8 Long Run Revenue and Cost Curves for a Fishery

The vertical axis represents

The horizontal axis represe

operating in the fishery, the

days fished, etc.

The cost curve represents fis

constant for each unit of effo

wages, materials, depreciati

an allowance for what is usu

The revenue curve relates

Assuming a constant price

shape of the yield curve (n

Initially, each additional uni

increases the fisheries total

each additional unit of effor

Maximumeconomic yield

Maximumsustainableyield

Free marketequilibrium(zero rent)

Max

rent

Cost curve

Revenue curve

1

E4
E3
$

R

E2

both fishing revenue and the

nts fishing effort which is

size of boats, engine powe

hing costs which, for the pur

rt. This means that the cost

on and normal returns to ca

ally termed profit.

the level of effort used in t

for fish, the shape of the re

ot shown) which relates the

t of fishing effort increases t

fish stocks are reduced and t

t declines.

E1

c


cost of fishing (shown in dollars ($)).

determined by the number of boats

r, quantity and effectiveness of gear,

pose of exposition, are assumed to be

curve is a straight line. Costs include

pital. This implies that costs include

he fishery to the value of the catch.

venue curve will be the same as the

level of effort to the level of catch.

he total catch and revenue. As effort

he additional catch and revenue from

Fishing effort



26

Maximum sustainable yield is the point where an additional unit of effort will not increase

total catch or revenue any further. If effort is further increased, both total catch and total

revenue from the fishery will be decreased. In Figure 8 this point corresponds to fishing effort

E4.

Economic rent is the difference between the total revenue and total cost curves. As noted

earlier, costs include direct operating costs such as fuel, labour (including the opportunity

cost2 of a self employed fisher’s own labour), bait, overheads such as administration and

licences and the cost of capital invested in the boat and gear (excluding licence). Capital cost

includes depreciation and the opportunity cost of the capital applied to the fishery. What

remains after the value of these inputs (labour, capital, materials, services) has been netted out

is the economic rent generated by the fisheries resource (sometimes known as the resource

rent). Economic efficiency corresponds to the maximisation of economic rent.

Initially, in an open access fishery3, fishers will be capturing significant economic rents

(excess profits4). In Figure 8, the level of fishing effort E2 illustrates such a point. The total

costs are shown to be well below the total revenue (R1). As it is an open access fishery and

fishers are making excess profits, there are incentives for others to enter the fishery and for

existing fishers to expand their capacity. With increased fishing effort the size of the fish

stocks will decline and the available economic rent or excess profits will also decline. (In

Figure 8 economic rent will begin to decline when fishing effort exceeds E3.) However, the

incentive to further increase effort will remain while there exists the opportunity to earn

excess profits. Indeed the incentive to increase effort will be there until point C on Figure 8 is

reached. At that point (effort = E1), total revenue equals total cost and the economic rent

generated by the fishery will have been dissipated.

Clearly, the commercial incentives in an open access fishery do not lead to an economically

efficient level of fishing effort. At point C, the effort E1 required to generate revenue R1

2 The opportunity cost of a resource refers to the next best (or next most profitable) use of a resource. The

opportunity cost of a self employed fisher’s own labour is the amount the fisher could earn in his or her bestpaid alternative to fishing. The opportunity cost of the capital invested in a fishing business is equivalent towhat the fisher’s investment could have earned in the next best alternative use.

3 Open access is a term used to describe common property. A common property right gives non-exclusive useof a natural resource (e.g. a fishery); anyone is free to use the natural resource.

4 Excess profit is profit over and above normal profit. Normal profit is profit sufficient to induce an investor toremain in his or her current activity.



27

involves the use of far greater resources (labour and capital) than the resources required to

generate the same revenue at effort E2. If a level of effort equivalent to E1 is being applied in

the fishery, then resources are clearly being wasted.

Free market equilibrium (point C) will result in resources (labour and capital) being

inefficiently used. This is a type of market failure and a situation where government

intervention to prevent excess effort and the dissipation of potential rents is quite appropriate.

Consideration of maximum economic yield (Figure 8) will further demonstrate the point. If

the fishery was owned or controlled by an individual (i.e. the individual had exclusive access

to the fishery), fishing effort would be set at a level where excess profits could be maximised.

As shown on Figure 8, this point is where the revenue from the catch exceeds the cost by the

most (i.e. where distance between the revenue curve and the cost curve is at its greatest (effort

= E3) and economic efficiency is maximised.

What this discussion does demonstrate is that the problem of over-exploitation of a fishery

and the inefficient use of resources results from the absence of exclusive individual rights.

With an open access fishery there are no exclusive individual rights and the commercial

incentives at work will result in the dissipation of potential economic rents and the inefficient

use of economic resources.

Clearly, there is a role for government to introduce measures that control the activities of

fishers to prevent excess effort and the dissipation of potential rents. In implementing

management controls which maximise the economic efficiency of the fishery as a whole, the

fishery manager also facilitates the profit making of fishers as a group. This broad

management objective cannot be achieved, however, without the clear specification and

enforcement of access rights to the fishery. The first step in this process is to move the fishery

from an open access to a closed access management system.

In summary, economic efficiency requires that resources applied to a fishery (i.e. the labour

and capital) are used efficiently and are not wasted.


Macarthur Agribusiness & EconSea

28

44..33 KKaannggaarroooo HHaarrvveesstt EEccoonnoommiiccss

The introduction to the previous section noted the incentive that individual harvesters have to

catch as much as they can before someone else does, leading to the duel environmental and

economic problem. The situation with the commercial utilisation of kangaroos in New South

Wales is slightly different as, currently, there are not the harvesting pressures on the resource

that are threatening its sustainability. Nevertheless, the logic underlying the basic fisheries

economics theory can be applied to the kangaroo harvest industry. A similar diagram

illustrating the relationships between cost and revenue for kangaroos is provided in Figure 9.

Figure 9 Long Run Revenue and Cost Curves for a Commercially HarvestedKangaroo Population

The vertical axis represents both revenue from kangaroo harvesting (i.e. revenue to ka

trappers and FDW) and the cost of harvesting (shown in dollars ($)).

The horizontal axis represents kangaroo harvesting effort (including processing by

which is determined by the number of trappers and FDW operating in the industry

shooting per annum, the size/power of vehicles, effectiveness of equipment, numb

location of chillers, servicing of chillers, processing capacity, etc.


Maximumsustainable yield


Maxrent

Kangaroo harvesting ef E4

Cost curve

Revenue curve

$

R1

c

fort
E2 E3 E1
rch, 2003

ngaroo

FDW),

, days

er and



29

The cost curve represents kangaroo harvesting costs which, for the purpose of exposition, are

assumed to be constant for each unit of effort. This means that the cost curve is a straight line.

Costs include wages (including retained earnings for the owner operator), materials (fuel,

ammunition, power, etc.), depreciation and normal returns to capital. This implies that costs

include an allowance for what is usually termed profit.

The revenue curve relates the level of effort used in the industry to the value of the kangaroo

harvest. Assuming a constant price for kangaroos (i.e. it doesn’t change with the quantity

harvested), the shape of the revenue curve will be the same as the shape of the yield curve (not

shown), which relates the level of effort to the level of harvest. Initially, each additional unit

of kangaroo harvesting effort increases the total harvest and revenue. As effort increases (past

effort level E4) the total stocks of the kangaroo population are reduced and the additional

harvest and revenue from each additional unit of effort declines.

Maximum sustainable yield is the point where an additional unit of effort will not increase

total harvest or revenue any further. If effort is further increased, both total harvest and total

revenue from the population will be decreased. In Figure 9 this point corresponds to kangaroo

harvesting effort E4. If quota is the primary tool used for sustainable resource management,

then the quota is likely to be set at, or just below, the maximum sustainable yield (given good

knowledge of the population dynamics and the yield function). Quota itself will not affect the

shape or position of the cost or revenue curves, it will simply influence the level of harvesting

effort and thereby affect the economic efficiency of resource utilisation.

Maximum economic yield is the point where the revenue from the kangaroo harvest (including

processing) exceeds the cost by the most (i.e. where distance between the revenue curve and

the cost curve is at its greatest (effort = E3) and economic efficiency is maximised (i.e.

marginal cost equals marginal revenue).

A number of general conclusions can be drawn from the relationships illustrated in Figure 9.

� While the cost of harvesting kangaroos is positive, the effort required for the maximum

economic yield will always be less than the effort required for the maximum sustainable

yield (i.e. E3 < E4). This implies that long-term economic efficiency will always be

consistent with resource sustainability.

Review of Kangaroo Fauna Dealer Wholesaler Licensing in NSW 30

� The lower the costs of harvest, the closer E3 (effort required for the maximum economic

yield) will be to E4 (effort required for the maximum sustainable yield).

� The higher the price received for kangaroos, the closer E3 will be to E4.

The key objectives of the kangaroo management program require sustainable resource

management and economic utilisation of the resource. For some stakeholders (e.g. many

landholders) pest mitigation outcomes are also important in the management of the resource.

The theory shows us, however, that pest mitigation will not be achieved when prices are low

and costs are high. Figure 10 illustrates the point, demonstrating the impact of lower prices

on the level of effort put into harvesting.

Figure 10 Long Run Revenue and Cost Curves for a Commercially HarvestedKangaroo Population: Impact of Lower Prices

With a fall in prices:

� The revenue curve is lower (bold broken curve).

� The effort required for maximum sustainable yield

� The effort required for maximum economic yield

� Kangaroo harvesting effort and, therefore, pest mi


Maximumsustainableyield

E4

Maximumeconomic yieldwith lower prices


$

R1

Revenue curvewith lower prices

E2
E3 E1
c

E5

Macarthur Agribusiness &

is unchanged at E4.

falls from E3 to E5.

tigation are reduced.

Kangaroo harvestin

Cost curve

Revenue curve

EconSearch, 2003

g effort



31

Note that a similar set of conclusions can be derived for a cost increase rather than a price

decline.

What does the theory tell us that is relevant to the licensing of kangaroo FDW?

1. The kangaroo management sustainability objective is met by quota. Limited entry to the

industry has been used as a management tool (in conjunction with input control

measures) in fisheries to control effort. In fisheries where limited entry is applied it

would normally apply to fishers rather than fish wholesalers or processors. In the

kangaroo industry, although the trappers are relatively independent of the FDW, the

nature of the commercial relationship and location of chiller boxes means that FDW do

have a high degree of influence over the level of harvesting effort by their supplying

trappers.

2. Limited entry can also help pursue the economic efficiency objective because, with

open access to a resource, there is an incentive for new operators to enter the industry

and existing operators to invest in more and better equipment. With a limit to the

amount of the resource that can be taken, individual harvesters have an incentive to take

as much as they can before someone else does. This is likely to lead to over-investment

and an inefficient use of resources. The quota management system currently in place

does not remove incentives for over investment because it is a competitive quota5. It

would be different under a system of individual transferable quotas (ITQs), which

would involve the creation and allocation of tradeable statutory kangaroo harvesting

rights.

3. So the existing management system, with its competitive quota and restriction on the

number of FDW licences, does not help pursue economic efficiency in the utilisation of

the resource. Would it do so any better if the restriction on the number of FDWs were

removed? If the restriction on the number of FDW licences limited the amount of

investment (and therefore capacity) in the wholesaling and processing sectors, then the

licence cap would help pursue the economic efficiency objective. However, as a licence

5 Trappers are allowed to “compete” for kangaroos until the quota is harvested.



32

does not carry with it any restriction on the number of chillers or number of chiller sites

that can be registered, the cap on licence numbers has no real impact on the industry’s

capacity6. Further, the practice of sub-licensing by existing licence holders undermines

any benefit that the cap on the number of licences might provide.

4. The extent to which the cap on licence numbers adds to costs (it certainly adds to the costs

of sub-licensees) will work against economic efficiency in the industry. This is well

illustrated in Figure 10, as higher costs for FDW and processors will mean lower prices

for trappers. This, in turn, will restrict harvesting effort at, for example, point E5 rather

than E3. This has two important outcomes: the economic rent will be lower at E5 than E3

(i.e. lower economic efficiency) and the pest mitigation objective will be less well met.

An important difference between the kangaroo industry and fisheries is that the level of

investment by kangaroo trappers (vehicle, guns, etc.) will generally be much lower than

investment by fishers (hull, engine, electronic equipment, gear, vehicle, etc.). The major

investment by a trapper is a vehicle and this can readily be sold or put to other uses (which is

not always the case with boat and gear of a fisher). Hence the problem of overcapitalisation is

potentially much greater for fishers than for kangaroo trappers. In the kangaroo industry,

however, the problem of overcapitalisation is more likely to arise among processors. As noted

earlier, because of the strong interrelationships between the processors and the trappers, and

the level of harvesting effort is dependent on investment by FDW in chillers and processing

capacity that directly affect harvesting effort.

6 This can be contrasted to the situation in fisheries where limited entry will normally involve a limit of one boat

per licence holder.



33

55 NNAATTUURRAALL RREESSOOUURRCCEE MMAANNAAGGEEMMEENNTT IISSSSUUEESS IINN OOTTHHEERR AAUUSSTTRRAALLIIAANN

WWIILLDD CCAATTCCHH IINNDDUUSSTTRRIIEESS

Other wild catch industries in Australia are confined predominantly to the fishing industries.

The following examples summarise a range of issues facing managers in fisheries in various

parts of Australia. As is demonstrated in the following sections there are several issues

common to the management of the fish and kangaroo populations: ensuring sustainability of

the resource; difficulties with stock assessment; meeting obligations under international

agreements that deal with wild populations; ensuring compliance with and enforcement of

relevant regulations; cost recovery to Government agencies for resource management

services; indigenous interests; conflicts with recreational users of the resource; and facilitating

financial viability of commercial users of the resource.

A distinguishing feature of fisheries is that full quota entitlements are generally taken (where

quota management systems are in place) and the wild based population is under threat. To

move toward a more economic efficient resource utilisation, extensive management time has

been devoted to definition of access rights to the resource and the allocation of those rights.

This issue has not as yet been critical in the management of kangaroo populations in NSW but

if market conditions improve to the extent that quota entitlements are regularly taken, access

to and allocation of quota will become important management issues.

55..11 NNoorrtthheerrnn PPrraawwnn FFiisshheerryy ((NNPPFF))

The NPF is one of Australia's most mature and valuable trawl fisheries. On average 8,500

tonnes of prawns are harvested annually with a production value of between $100 - $170

million. More than 90 percent of the catch is exported with Japan, China and other South-

East Asian countries being the principal markets.

Located off Australia's northern coast, the fishery extends between Cape York Peninsula in

Queensland to Cape Londonderry in Western Australia. The NPF has undergone major

restructuring since the late 1980s which has seen the size of the commercial fleet reduced

from 302 vessels to approximately 96 today.



34

The commercial catch also includes white banana, Indian banana, brown tiger, grooved tiger,

giant tiger, blue endeavour, red endeavour, western king and red spot king prawns. Other

species taken include bugs, scampi and squid. Banana prawn catches are thought to be

influenced by environmental conditions, with high rainfall a key factor in many areas. During

2001, catches were extremely high but based on current information, are believed to be

sustainable.

Management Objectives

The objectives of the Northern Prawn Fishery (NPF) Management Plan are specified in its

Section 4 as:

"(a) To ensure that the use of the Northern Prawn Fishery is consistent with the

principles of ecologically sustainable development;

(b) To maximise economic efficiency in the Northern Prawn Fishery; and

(c) To implement efficient and cost effective management of the Northern

Prawn Fishery.”

These objectives are consistent with objectives of Australian Fisheries Management Authority

(AFMA) identified in Section 6 of the Administration Act and in Section 3 of the

Management Act.

Resource Management Problems

For a number of years the Commonwealth’s fisheries agency and since 1992 AFMA, through

the Northern Prawn Fishery Management Advisory Committee (NORMAC), have been

implementing a range of changes in order to better manage the fishery so as to achieve the

objectives of the Management Plan.

The changes implemented over the past decade or so have included a voluntary buy-back

scheme, a limit on the number of nets per boat and later still, a compulsory buy-back scheme.

None was thought sufficient to satisfy the legislative objectives, in particular the need to

balance ecologically sustainable development and economic efficiency. The problems

specifically identified by AFMA are:

� Overfishing;



35

� Effort creep, that is, increased effective fishing effort as a result of, among other things,

technological advances; and

� Ability to adjust fishing effort.

Clearly, uncontrolled measures in fishing effort create a serious threat to ecologically

sustainable effort. This is particularly relevant to stocks of tiger prawns. Effort creep is a

principal factor leading to overfishing. It is brought about by more efficient vessel design,

improved equipment, enhanced skipper skills and improved catch handling, mother ship

services and storage facilities. The extent effort creep contributes to overfishing is hard to

assess. In particular, it is impossible effectively to police engine power because, for instance,

fuel pump settings which limit engine output can readily be changed at sea. Adjusting fishing

effort was hard to do under the previous scheme because the hull and engine components of

the Class A Statutory Fishing Rights (SFRs) could not readily be reduced. The closure of the

fishery is an effective means of reducing effort on fish stocks but it produces economic

inefficiencies, with expensive trawlers lying idle for substantial periods.

Current Management Arrangements

The current management tools involve a series of input controls, including limited entry to the

fishery, gear restrictions, by-catch restrictions and a system of seasonal, spatial and temporal

closures.

After considering various options, AFMA decided in 2001 to introduce a gear management

system. The main difference between the gear management system and the previous system is

that a gear based system regulates the fishery through the amount of net that can be towed,

rather than through vessel and engine sizes.

To fish in the NPF operators must hold Statutory Fishing Rights (SFRs), which control fishing

capacity by placing limits on the numbers of trawlers and the amount of gear permitted in the

fishery. There are two types of SFRs:

� A Class B SFR, which permits a boat to fish in the NPF; and

� A gear SFR, which limits the amount of net a fisher can use.



36

A gear SFR represents 7.5 centimetres of operational head rope and 8.625 centimetres of

operational footrope. Operators need Class B SFRs and the necessary amount of gear SFRs

for the length of net they wish to use to operate in the fishery. There is a minimum holding of

100 gear SFRs1 for each Class B SFR. The total number of Class B SFRs in the fishery is

102. However, because of insufficient numbers of gear units available, only 96 trawlers are

active in the second season of 2002. There is no mechanism in the plan for Class B SFRs to

be reactivated once falling below the minimum holdings.

Season and Area Closures

The fishery has two open seasons where fishing is permitted. The seasons may vary but have

generally fallen between April - May/early June and August – November.

Closures of the fishery between seasons generally coincide with the spawning and recruitment

phases of prawns to ensure individuals are at an acceptable size for harvesting. Shortening of

the season has also been used as a method to reduce effort in the fishery. Other closures

include permanent closure of seagrass beds and other sensitive habitats and seasonal closures

of juvenile prawn stock habitat.

In addition to management closures of the fishery there are a number of other areas protected

by legislation located within the NPF. Most of these occur within areas that are already

closed off to any fishing activity, are close to the shore and/or are part of terrestrial parks.

The only marine park in the NPF is the Cobourg Marine Park, which is located in the waters

surrounding Cobourg Peninsula, approximately 220km north-east of Darwin. The Park

occupies an area of approximately 229,000 hectares and is protected under NT legislation.

There are also a range of indigenous interests that affect or potentially affect access to the

NPF.

Native Title

Although no exploitation of offshore prawns is carried out by indigenous people in the NPF,

there appears to be an indigenous interest in other fishery resources within the NPF area.

Consequently there are a number of native title claims over marine waters.



37

Aboriginal Land

Over 84% of the Northern Territory coastline including land down to the low water mark is

owned by Aboriginal people. This land has been granted to Aboriginal people under the

Commonwealth Aboriginal Land Rights (Northern Territory) Act 1976. A permit is required

to go ashore on this land unless there is a genuine emergency at sea.

Closed Seas and Areas

There are presently two area closures under the Northern Territory Aboriginal Land Act 1990.

These are the Milingimbi Crocodile Island and Glyde River area and the Castlereagh

Bay/Howard Island area. A permit issued by the Parks and Wildlife Commission of the

Northern Territory on behalf of the Cobourg Peninsula Sanctuary and Marine Park Board is

required to enter Gurig National Park.

Sacred Sites

In the Northern Territory all places which are sacred or otherwise of significance according to

Aboriginal tradition are protected under the Land Rights Act and the Northern Territory

Aboriginal Sacred Sites Act. This means that sacred sites are protected whether or not they

have been ‘Declared’, ‘Registered’ or otherwise brought to official attention. Previously the

Aboriginal Areas Protection Authority has received repeated complaints from traditional

owners about breaches of the Northern Territory Aboriginal Sacred Sites Act by NPF trawlers

anchoring in ‘No Access’ areas. Each season AFMA provides operators with the Aboriginal

Areas Protection Authority contact details and all operators are requested to find out in

advance where sacred sites are located before commencing their operations and to ensure that

their activities do not interfere with these sites.

Compliance and Enforcement

AFMA co-ordinates compliance arrangements for Commonwealth fisheries. Specific

compliance functions in the field are undertaken by State and Territory fisheries and police

officers employed by AFMA on an agency basis. AFMA has developed a Memorandum of

Understanding with each of the States and the Northern Territory which commits AFMA to

sourcing compliance services from those States/Territory. Each Memorandum of



38

Understanding is supported by defined Terms and Conditions which, among other things,

specify State/Territory responsibilities.

AFMA also develops a Compliance Plan for each major Commonwealth fishery. As part of

this process, AFMA assesses both the potential risks of non-compliance with management

arrangements and the impact or consequence of a particular act of non-compliance on the

integrity of those arrangements. Strategies to manage these risks are then identified and

incorporated into the Compliance Plan. Details of compliance activity (commensurate with

the perceived risk of non-compliance), performance measures and a proposed budget are also

included in the Plan.

Other Management Issues

International Commercial Fisheries

Until recently, Australian-flagged NPF vessels were able to fish in Indonesian waters, with

many operating in Indonesia during and after the NPF season. This situation changed in early

2000, with only Indonesian-flagged trawlers now authorised to operate in Indonesian waters,

making it difficult and expensive to operate trawlers in both areas. Most NPF operators

restrict their fishing to the NPF only. This situation is similar for Papua New Guinea and

other nations immediately north of Australia.

Recreational Fisheries

Recreational fishers are allowed to use hand-held seine or bait nets of restricted sizes for

catching prawns in both Queensland and the Northern Territory. The NPF area is popular

with recreational fishers targeting species other than prawns. Operators and management

regard the impact of recreational fisheries on the NPF as insignificant.

Aquaculture

An Offshore Constitutional Settlement (OCS) agreement exists between the Commonwealth,

Northern Territory and Queensland governments, which permits licensed aquaculturalists to

contract NPF entitled operators to trawl for gravid prawns for use in the aquaculture industry.



39

Tourism

There is a small but increasing tourism component in the NPF. Tourists to Darwin, Weipa

and Karumba often display an interest in commercial fishing activities, including trawling,

and may participate in recreational fishing within the NPF zone. In addition to recreational

fishing for visitors, commercial fishing camps and eco-tourism are becoming popular and

there are a growing number of isolated resorts established in coastal areas bordering the NPF.

Mining

There is presently no mining at sea in the NPF area although exploration for oil, gas,

diamonds and gold is underway or proposed in Joseph Bonaparte Gulf and the Gulf of

Carpentaria.

Shipping

There is considerable sea-borne transport of bulk commodities (especially bauxite,

manganese, lead and zinc ore), live cattle and other general freight through some of the NPF

fishing grounds. Supporting this transport in several locations along the coast are port

infrastructures which indirectly benefit the NPF fishing industry by providing improved port

facilities but which may also pose some risks to the fishery (eg. dredging and spoil dumping,

transhipment of metal concentrate at designated Gulf of Carpentaria roadsteads, and ballast

water and exotic pests).

The Northern Prawn Fishery Management Advisory Committee has expressed concern about

the potential impact on the NPF of contamination of prawns and sediments from zinc dust and

other potential spillages when transferring cargo at the designated Gulf of Carpentaria

roadsteads. Of particular concern is the south-east Gulf roadstead used by Pasminco’s mining

operations, as trawling also occurs in this area.



40

55..22 SSoouutthheerrnn BBlluueeffiinn TTuunnaa

Industry Overview

Principal Species Southern bluefin tuna (Thunnus maccoyii) No. of Statutory Fishing Right (SFR) ownersas at October 2000

99

Australia's national catch allocation 5,265 tonnes Estimated catch for 1999-2000 5,262 tonnes Estimated value of production for 1999-2000 $A87.962 million Main market Japan Fishing methods Purse seining (mainly for catching southern bluefin

tuna for farming), pole, pelagic longline and trolling


The objectives of the Southern Bluefin Tuna (SST) Fishery Management Plan are specified in

its section 4 as:

(a) Implementing efficient and cost-effective fisheries management on behalf of the

Commonwealth (the cost effectiveness objective); and

(b) Ensuring that the exploitation of fisheries resources and the carrying on of any related

activities are conducted in a manner consistent with the principles of ecologically

sustainable development and the exercise of the precautionary principle, in particular the

need to have regard to the impact of fishing activities on non-target species and the long

term sustainability of the marine environment (the ESD objective); and

(c) Maximising economic efficiency in the exploitation of fisheries resources (the economic

efficiency objective); and

(d) Ensuring accountability to the fishing industry and to the Australian community in the

Authority's management of fisheries resources (the accountability objective); and

(e) Achieving government targets in relation to the recovery of the costs of the Authority;

and

(f) Implementing Australia’s obligations under international agreements that deal with fish

stocks.

These objectives are consistent with objectives of AFMA identified in section 6 of the

Administration Act and in section 3 of the Management Act.



41


The most recent stock assessment undertaken by the Commission for the Conservation of

Southern Bluefin Tuna (CCSBT) in 1998 suggested that the parental biomass of SBT is at

historically low levels, in the order of 7-15% of the 1960 level.

Scientists from Australia/New Zealand and Japan do not agree on certain fundamentals of the

stock assessment and have widely different views on the probability of the stock recovering to

the established reference point of 1980 levels by the year 2020.

When a new stock assessment is undertaken in the near future this will be reviewed by a

group of independent scientists appointed by the CCSBT.


The Australian domestic SBT Fishery is managed through output controls (individual

transferable quotas (ITQs) allocated as Statutory Fishing Rights (SFRs) under the Southern

Bluefin Tuna Fishery Management Plan 1995 (the Management Plan).

The Management Plan provides for access to SBT in all waters of the AFZ (Australian

Fisheries Zone) and extends to high seas for Australian fishers.

Management of the global SBT Fishery is undertaken by Australia, Japan and New Zealand

under the Convention for the Conservation of SBT. The Convention establishes the

Commission for the Conservation of SBT (the Commission). The Commission sets a total

allowable catch (TAC) and determines national allocations for its member countries. The

Commission is also responsible for determining management measures and key strategies for

the SBT Fishery at the international level.

55..33 SSoouutthh AAuussttrraalliiaann NNoorrtthheerrnn ZZoonnee RRoocckk LLoobbsstteerr FFiisshheerryy

Industry Overview

The area of the northern zone rock lobster fishery extends from the Murray Mouth, north and

west to the West Australian border. A number of marine protected areas have been



42

established within the waters of the fishery, consequently not all waters are available to

fishing.

There are 69 licence holders in the fishery which operates between 1 November and 31 May.

The fleet operates from a number of ports in South Australia between Victor Harbour and the

far west coast. Vessels fish for between one and ten days per trip, with vessels on the west

coast fishing further from port and therefore having longer trips.


Section 20 of the South Australian Fisheries Act 1982 (as amended) (‘the Act’) provides that

the Minister, the Director of Fisheries and Management Committees shall have as their

principal objectives:

� Ensuring, through proper conservation, preservation and fisheries management

measures, that the living resources of the waters to which the Act applies are not

endangered or over exploited; and

� Achieving the optimum utilisation and equitable distribution of those resources.

Accordingly, it must follow that management with respect to the northern zone rock lobster

fishery must pursue those objectives.


The recent stock assessment advice from SARDI (2002) reports the following:

� The catch for the 2001/02 fishing season was 674 tonnes, which is 24% below the lower

reference limit identified in the Management Plan (891 tonnes in 1994) and the lowest

catch for the NZRLF since 1985.

� The CPUE (calculated from season totals of catch in weight and pot lifts) for 2001 was

1.08 kg/pot lift, which is 14% below the lower reference limit identified in the

Management Plan (1.25 kg/pot lift in 1995 and 1996) and the lowest in the history of the

fishery.

� The mean weight of lobsters for the 2001 season (calculated from season totals of catch

in numbers and weight) was 1.16 kg, which is 3% above the upper reference limit



43

identified in the Management Plan (1.07 kg in 1992) and the highest mean weight since

1982.

The decline in the exploitation rate for the 2001 season suggests that the 7% reduction in

effort implemented at the start season succeeded in reducing the catch. However, the high

mean weight of lobsters and low levels of recent recruitment suggest that this decrease will

not be sufficient to prevent further reductions in the fishable biomass over the next few

seasons (SARDI, 2002).

In order to (i) minimise the rate of depletion of the biomass over the next few seasons, (ii)

maximise the rate of recovery of the biomass in the medium-term, and (iii) maximise the

long-term yields for the fishery, effort should be reduced significantly below the 2001 level

(SARDI, 2002).


Current management arrangements include:

� Limited entry,

� A legal minimum size of 102 millimetres (for both males and females),

� A closed season from 1 June to 31 October,

� A number of boat specific time closures during the season,

� A maximum of 60 pots per licence,

� A maximum pot weight of 40 kilograms,

� No double pulling of pots within 24 hours,

� A prohibition on taking of berried females, and

� Restrictions on boat size (18 metres) and engine capacity (1,200 BHP).

Other Management Issues

To address the decline in industry stocks, the industry is in the process of moving to output

control measures i.e. introducing a TAC (total allowable catch) and ITQs (individual

transferable quotas).



44

55..44 CCoommppaarraattiivvee AAnnaallyyssiiss ooff KKaannggaarroooo,, PPrraawwnn,, TTuunnaa aanndd RRoocckk LLoobbsstteerr SSyysstteemmss

The following analysis (Table 10) utilises the preceding sections and attempts to identify the

similarities and differences in the management of seafood and kangaroo wild harvest species

within Australia. While there are many similarities there are also some significant differences

based on the practicalities of managing the take from these wild populations. This is

particularly so with respect to the commercially harvested kangaroo population that is subject

to seasonal impacts on population quantum (although there are similarities with fisheries such

as the Northern Prawn Fishery which is subject to significant seasonal fluctuations in catch)

and, more particularly, the issues of pest mitigation and a commercial industry that does not

harvest the full quota entitlement except in rare severe drought conditions.

What does the comparison with fisheries tell us that is relevant to the licensing of kangaroo

FDW?

The most telling lessons relate to issues that arise when there is harvesting pressure on the

resource. While this may not be of immediate concern to the management of kangaroos and

related licensing arrangements in NSW, it could well become critical in the future as the

markets for kangaroo products develop.

1. If the commercial kangaroo take consistently approaches the quota, there will be a need

for a clear definition of access rights to the resource and an appropriate allocation of

those rights.

2. There are many issues that impinge on management of wild stock resources but it is

clear that the viability of the commercial licence holders is inextricably linked to the

resource’s ecological sustainability. However, not only does the viability of licence

holders depend on a sustainable resource, but the ecological integrity of the resource

depends upon a suitably structured and managed commercial sector. This, at a

minimum, requires that access rights to the resource be appropriately defined (as secure

property rights) and allocated.

3. The experience of fisheries has shown that most difficulty lies with the initial allocation

of property rights. However, it is much better to tackle this issue early in an industry’s

development when the financial incentives for protracted disputes are not as great.



45

4. If property rights are well defined and secure then the market will sort out how those

rights are best distributed among individual operators. Importantly for the kangaroo

industry, this will overcome the problem of administratively determining the number of

licences, as the mechanism will be in place for industry to adjust over time to changing

market conditions.

Table 10 Comparative Analysis of Kangaroo, Prawn, Tuna and Rock LobsterSystems

Criteria NSWKangaroos

Northern Prawns

Tuna SA NorthernZone Rock

Lobster InternationalRegulationRequirements

� � � �

FederalRegulationRequirements

� � � �

State RegulationRequirements

� � � �

Science Basedpopulationestimates

� � � �

QuotaRestrictions

� � � �

Zonal HarvestSystem

� � � �

OperatorLicensing System

� � � �

Restriction onnumber ofharvesters

� � � �

Restriction onnumber ofprocessors

� � � �

Tradeability oflicences

� � � �

Abundantresourceavailabilityrelative to marketdemand

� � � �



46

66 OOUUTTCCOOMMEESS OOFF TTHHEE SSTTAAKKEEHHOOLLDDEERR CCOONNSSUULLTTAATTIIOONNSS

UUNNDDEERRTTAAKKEENN DDUURRIINNGG TTHHEE RREEVVIIEEWW OOFF TTHHEE CCUURRRREENNTT NNSSWW FFAAUUNNAA

DDEEAALLEERR WWHHOOLLEESSAALLEERR LLIICCEENNSSIINNGG SSYYSSTTEEMM

66..11 TThhee CCoonnfflliiccttiinngg OObbjjeeccttiivveess IInnhheerreenntt iinn MMaannaaggeemmeenntt ooff tthhee KKaannggaarroooo

MMaannaaggeemmeenntt PPrrooggrraamm aanndd FFDDWW LLiicceennssiinngg

There are understandable conflicting objectives between conservation management, pest

mitigation and kangaroo product marketing and likewise between the objectives of the various

players in the kangaroo product supply chain from landowner, shooter/harvester, Fauna

Dealer Wholesalers and the domestic and export consumer markets for kangaroo based

products. NPWS has the difficult role of being both regulator and conservation manager

responding to State and Federal legislation imperatives while seeking to ensure sustainable

resource use and commercial utilisation of a government mandated harvest of kangaroos that

are seen by land owners as both an essential component of the pastoral rangelands but also as

pests when populations rapidly increase.

Clearly, the kangaroo management program for NSW is a requirement of the State complying

with Federal legislative obligations and has been validated by the recent Administrative

Appeals Tribunal judgement. An essential component of that program is the licensing of

fauna dealer wholesalers without whom any kangaroos harvested in a pest mitigation context

would be simply left in the paddock. Equally, such a situation would incur the wrath of the

animal welfare and protection lobbies.

The compromise is that the population estimate basis of the kangaroo quota needs to be

scientifically based and then have a regulatory regime that ensures no more kangaroos are

commercially harvested than that allowed under the quota. This is managed effectively in

NSW by adjusting the quota annually to allow for all forms of mortality under a proportional

harvest strategy. Under this strategy the key issue is determination of how many kangaroos

there are in each year not how they die.

66..22 KKeeyy IIssssuueess RRaaiisseedd iinn CCoonnssuullttaattiioonn

During this review, stakeholders from government, the commercial industry, landholders and

people responding to an advertisement calling for submissions were consulted. A list of those



47

people consulted, the advertisement calling for submissions and the list of questions used as

thought starters in face-to-face interviews is contained in the attachments to this report.

An individual or firm’s position along the supply chain will affect their preferred position or

view of any particular issue. The following table shows the preferred position/consensus view

arising from stakeholder consultation in this review.

It should be noted that the views expressed as preferred positions are those of the stakeholders

consulted and do not necessarily reflect the views of the NSW NPWS or the consultants. In

developing this table we are mindful that some issues clearly relate to the Kangaroo

Management Program and its implementation whereas other areas clearly focus on licensing

issues. However, our assessment is that the licensing issue cannot be viewed in isolation and

has to be seen with in the context of KMP issues.



48

Key Issue Preferred Positions/Consensus View Population Dynamics and Estimations

Aerial survey in August toestablish populationnumbers and the quota setat end of year

The lag between the surveys to set quota and its implementationmeans that because of seasonal changes the location ofkangaroos can be dramatically affected once the annual harvestyear commences. However, while the full quota continues to berarely taken in any zone, this is not a problem.

Publication of data It would help FDWs in the management of their businesses tohave the quota take statistics published monthly.

Frequency/accuracy ofpopulation counts

There seems to be a problem in that the one in 3 yearpopulation counts are not matching reality or that trapperreturns are not being matched to population quota estimates.

Cross zone allocation ofquota

Tags should be allocated to kangaroo management zones butthere needs to be flexibility to move tags across zones askangaroo populations migrate in drought years. Six monthlypopulation/ quota reviews are needed, based on returns acrosscontiguous zones e.g. if one zone is fully using quota andanother zone is under-utilised. The system needs better on-ground feedback to enhance conservation and sustainable useobjectives.

Normal & Drought Season Operations Impact of recent drought Recovery of kangaroo numbers from drought will take quite a

while: 3-5 years depending on seasonal conditions over thattime. Kangaroo numbers were at historically high levels prior tothe 2002-2003 drought.

Requirement to process(as a licence condition)

If operating a processing plant was required as a condition of aFDW licence, there should be flexibility in the system to allowprocessors to adjust to seasonal conditions. A processor shouldnot be forced to operate (as a licence condition) if they arelosing money.

Quota /Take Trends Quota Take It is a limitation in market demand that prevents full quota take

each year. Another factor is the number of properties that aretied up by trappers that prevent access by other trappers tosupply alternative FDW.

Flexibility in quota setting Increased flexibility would be beneficial in having an ‘oversand unders’ system, i.e. allow over quota one year (up to afixed percentage), but that amount to come off the next year’squota.

Take level response toprice

The way to increase the proportion of the kangaroo quota takenis to increase the prices paid to trappers. In a normal year theywould shoot approx 1 tonne per night. If paid $0.55/kg theywould earn approximately $550/night. A higher price wouldencourage a greater take per night and perhaps bring in moretrappers. But with a greater quantity on the market, the marketprice will decline and the licence holders won’t be able tosustain the higher prices to trappers. Ultimately the number ofkangaroos shot will be determined by market demand for theproduct.



49

Quota /Take Trends (cont.) Use of returns to monitorkangaroo populations

The use of returns to monitor population and thereby adjust thequota during the year would add a lot of administrative work tothe system – and for what purpose? Apart from the occasionalzone in some years, there generally isn’t a constraint on catchcaused by quota limitation. Perhaps it would help with resourcemanagement in the future but that would only be if the marketimproves substantially and incentives for shooters/processorsincrease.

Effectiveness of quotasystem on total grazingpressure

The effectiveness of the quota system in restricting kangaroonumbers is uncertain. It could even accelerate populationgrowth, rather than reduce it, by leaving a larger proportion offemales. The question of competition for feed betweenkangaroos and domestic animals is a contentious one. Someresearch has shown that in a good season there will be plenty offeed for all – only when leading into a drought will there becompetition between kangaroos and domestic animals.

Pest Mitigation Kill Entering the commercialsystem

Drop and lie kill, if carried out by a licensed trapper, should beallowed to enter the commercial system rather than have theresource wasted when a proven markets exists and supplies areconstrained, e.g. during drought.

Employment andprocessing throughput

An important issue is making sure there is continuity ofemployment for shooters and process staff to maintainprocessing sector infrastructure in remote locations. Utilisationof the drop and lie kill will help achieve this employmentobjective.

Hobby shooters Hobby shooters should not be allocated normal quota butallocated special quota and ensure hobby shooters have adefined link to a processor.

National parks The logic of not allowing drop and lie kill into the commercialsystem is the same as not being able to access kangaroos shot innational parks, e.g. in Victoria.

Special quota Use of drop tags is a waste of the resource and processingshould be allowed. This has been facilitated in recent years witha special quota.

Conflicts Between Conservation Management, Pest Mitigation and CommercialViability Quota is the managementinstrument for kangaroosnot FDW licences

There is a conflict between conservation management, pestmitigation and commercial use of wild life objectives with no‘silver bullet’ solutions. The objectives of the supply chainplayers and NSW NPWS are different. Landowners want toreduce total grazing pressure, particularly in drought years.Trappers are seeking to optimise income by accessing andsupplying kangaroos all year round to FDW and FDW arelooking to supply markets to optimise profits by being reliablesuppliers year round. NSW NPWS is seeking to have effectiveconservation management & kangaroo population managementby facilitating a sustainable harvest at quota levels.



50

Conflicts Between Conservation Management, Pest Mitigation and CommercialViability (cont.) Capacity utilisation Ideally, throughput would be relatively constant throughout the

year to satisfy consistent supply to markets and be at a levelabove breakeven for the plant. Volatility in a wild populationleads to variability in quota/seasons and can make breakevencapacity utilisation difficult to achieve.

Chiller location –servicing isolated areas

Chiller location needs to be flexible and location is dependanton kangaroo numbers relative to quota to service market clientsthroughout the year. However, in good seasons there needs tobe some means to ensure that the more isolated areas areserviced.

Sustainable use There is an inherent incompatibility (in the short-run at least)between the needs of landholders wanting to reduce totalgrazing pressure and trappers and FDW wanting to ensuresustainable harvest and on-going supply to meet marketdemand throughput year.

Management of nationalparks

Management of national parks does impact on kangaroopopulations, particularly at a local level, e.g. when dams werepushed to limit waters for wild pigs, a lot of kangaroos wereflushed out onto grazing lands.

Carcass quality It is in the interests of the pest mitigation objective to have acommercially viable industry. If trappers can’t get numbers orquality when prices are low then they won’t go out. This willlead to more part-timers operating which can create qualitycontrol problems with lower levels of expertise. It is better forthe industry in many ways to have trappers out shooting on aconsistent basis.

NSW Kangaroo Industry Structure Competition in sourcingkangaroos

There is strong competition in sourcing from trappers and manytrappers will change FDW for a few cents per kilogram extra.

Competition in HC(human consumption), petfood and skin markets

For FDW there is strong competition on the selling side as well.For HC and pet food not only are there the other licensedprocessors but also other meat products. In all kangaroo productmarkets (HC, pet food and skins) there is competitive productnot only from NSW but interstate (SA, Qld) as well.

Impact of HC on market Human consumption is improving the professionalism of theindustry but is increasing commercial vulnerability (risk)because of the relatively large amount of capital required tooperate (compared with pet food).

HC market impacts on thepet food market

Current system encourages competition. HC will eventuallyabsorb full quota and pet food will revert to sheep and beefmeats.

Comparison with otherstates

There is plenty of competition in NSW with 11 licence holdersplus the interests from interstate. By comparison the other statesseemed to have a higher concentration of processors, which isdetrimental to the industry (lower throughput) and theobjectives of the landholders (pest mitigation).



51

Role of NPWS and SafeFood Need for Governmentinvolvement

There needs to be some government involvement, as industryself-regulation will not be effective. For there to be market andcommunity confidence in the quota system, it needs to bemanaged and controlled by Government. The FDW licence hasto have regulatory teeth and penalties for non-compliance.

Relationship betweenNSW NPWS andSafeFood

Currently the two organisations have a memorandum ofunderstanding but there are not enough compliance officers.There are enough people to issue and manage licences but notenough staff and other resources to ensure compliance.SafeFood covers all food groups but its staff needs to haveskills pertinent to the needs of the kangaroo industry.

Tag issue and retrieval Tag issue and retrieval system in NSW is cumbersome, e.g. itonly occurs for 2 weeks/month and unused tags have to bereturned at the end of each 3-month period to obtain an unusedtag refund. Zone differences could be much better managed ifthere was a move to an electronic database system with codedtag numbers applicable to relevant returns and electronic dataretrieval and feedback to supply chain players.

Documentation The system should be the same as in Qld where the first pointof sales is the recording point not the trapper/chiller/ chiller/FDW/ process plant duplications. Licence structure should bechanged to eliminate the current paperwork overload.

Interpretation ofregulations

NSW NPWS field officers have interpretations of someregulations different to those of officers at NSW NPWSofficers in Dubbo. This can create problems for FDWs.

Trapper compliance Trapper compliance and QA are not policed effectively.Current inspectors need people skills training. Inspectors aregenerally perceived as tax revenue collectors. GovernmentDepartments such as NSW NPWS and SafeFood should workbetter together. Currently NSW NPWS and SafeFood do notknow each other’s requirements at a field officer level.Trappers control the harvest of kangaroos but they are the leastregulated.

Sub-Licensing It is unclear the extent towhich sub-licensingoccurs

If sub-licensing is to be acknowledged as part of industryarrangements then it should be formalised in a transparentprocess.

Impact of sub-licensing onlicence values

Sub-licensing arrangements undermine the value of the primarylicences. As the number of businesses operating under sub-licensing arrangements increases, the value of primary licencesis diminished.

Impact of sub-licensing ontake

Sub-licences increase the capacity of the industry to draw out ofan area and hence has a positive impact on take. The number ofsub-licensing arrangements currently in place make it a de factoopen system.



52

Sub-Licensing (cont.) Sub-licensee has nosecurity – dependent onthe good-will andcontinued licence of theprimary licence holder

Those currently operating under sub-licensing arrangementswould like to obtain a full licence to remove the uncertainty oftheir current arrangements.

Entry of New Players Unfettered entry of newplayers

Existing licence holders believe this would result in high rate ofbusiness failure, including some existing licence holders. Withrelatively low throughput (and high overheads) prices paid toshooters would eventually fall – trappers will leave the industryas will the small processors (both new and existing) and onlythe larger ones will survive. The smaller number of processorsand less trappers would mean a reduction in the area coveredand in the size of the kangaroo take.

Path to business failure ofnew entrants

When new entrants come into the industry they try to buysupply share by offering above going market rates forkangaroos on a per kg basis. They also buy market share in themarkets into which they are selling by supplying at pricesbelow going rate. This is not financially sustainable and theyultimately fail but in the process have significantly destabilisedthe market.

Unfettered sub-licensing Unfettered sub-licensing arrangements would undermine theexisting licensing system and therefore the value of licences.

Compliance with foodsafety regulations

If the licence system was opened up then compliance levelscould suffer as new players attempt to cut corners while tryingto buy market share. More players does not necessarily meanbetter standards, as some new entrants will be under-fundedopportunists who tend to compromise quality and food safety.This highlights the need for a properly regulated and enforcedindustry. In the longer term, however, consumer perceptionswill drive compliance as the industry will not survive withoutpublic perceptions of a safe and properly regulated system.

Kangaroo Product Markets Market Acceptance ofKangaroo Products

HC market has been slow to develop in Australia – itsexpansion would be a big boost to the industry. Market growthis still constrained by consumer perceptions about kangaroosaided by excessive media hype by opponents of the kangarooindustry. Less than 10% of the carcass goes to high priced striploin cuts. 90% are secondary cuts which force kangaroo meatinto the spot price manufacturing meat market.

Expanding overseasmarkets

Existing exporters work hard to sell product but more can bedone. It requires considerable resources, persistence andmarketing skills to sell kangaroo meat overseas. The existingmarket is for generic meat (world commodity). Kangaroo meatloses its identity once it crosses the import border, e.g.kangaroo meat exported to France becomes game meat goulash.The market is subject to variation in seasonal supply fromelsewhere and exchange rate fluctuations. Consequently thereare significant risks for those operating in the export market.



53

Kangaroo Product Markets (cont.) Pet food market Pet food made from kangaroo meat is used extensively in the

greyhound industry. Kangaroo meat is lean and can be blendedeffectively with other meats to produce pet foods of varying fatlevels. A significant change driver is the fact that Cryovac™pet food in smaller packs can now be sold in supermarkets.Nevertheless, in NSW fresh kangaroo pet food is perceived tobe a declining market as competition is coming from dry petfood, supermarkets and canned product. A pet food kangarooprocessor cannot sustain operations in their own right and thepet food business is increasingly being managed out ofQueensland. Commercial Industry Viability

Cost of Governmentregulation

SafeFood inspection costs for chillers, even when they arededicated and numbered for pet food only, unnecessarily add toviability pressures.

Licensing arrangements Licensing system in NSW provides confidence to the licenceholders - this helps maintain industry investment and long termviability. Regional Importance of Industry

Generation of income andjobs

Industry does have an impact in remote areas and has potentialto increase the impact.

Jobs and income notnecessarily confined toNSW

A NSW FDW licence does not restrict the location of kangarooprocessing– under both licence and sub-licensing arrangementsa proportion of the annual take is sourced in NSW andprocessed in SA and Qld.

Value and Tradeability of Licences Value of licences Licences are considered an asset by all licence holders but the

value is uncertain as it will usually be sold together with plant,equipment and business goodwill, which will include anexisting network of trappers. Although a licence providesaccess to the resource it does not guarantee access at any level(unlike an individual quota). The value of a licence is the valueof the total business system and relationships.

Tradeability of licences Most licence holders would like to see the process for tradinglicences become more transparent.

Skin Only Shooting Alternative to drop tagsystem

Until kangaroo meat becomes more valuable, landholders willnot earn any significant income from the resource. However,they do not want to lose the opportunity to make some moneye.g. skin only shooting when below quota. If the managementobjective is to provide some pest mitigation service to all areas,then some regulation to that effect may be helpful. If thelandholders had some incentive to either take kangaroosthemselves or entice trappers, it may be a better alternative tothe drop tag system.



54

Skin-Only Shooting (cont.) Landholders’ view on skinonly shooting

Landholders are strongly of the view that skin-only shootingshould be allowed especially during drought when averageweights are down and processors are not interested in taking thelight animals. Also, it would be appropriate in areas that aremore difficult for trappers to access (e.g. scrub country) whereaverage numbers/night are low compared to clearer areas.

Past experience The skin market is larger than that for meat and attractsopportunists. When skin-only shooting was stopped in NSW,demand flowed to Qld with skins being sought by theinternational market. High prices were paid for low qualityskins leading, eventually, to pricing resistance. The market thencollapsed with the opportunists leaving the market. However,despite these difficulties, skin-only shooting should be acontingency measure that can be activated for either a limitedtime or with quota allocation with the skin-only componenttaken by licensed trappers and FDWs. This approach wouldbring additional value to the industry and eliminate the waste ofthe farmer-based drop tag system as it is currently managed. Government Support of Industry

Government assistance fornew operators

Governments do not understand the kangaroo business andconstantly fund proposals by new comers that generally fail. Inthe process the established players have to cope with significantmarket instability.

Government support role Government needs to be prepared to stand by the kangarooindustry more often to assist in industry growth, e.g. nokangaroo is used in the conventional small goods andoperations, yet in Europe it is often used in manufacturing meatand salami. Government needs to keep working to overcomethe negative market perceptions about kangaroo products.



55

77 DDEEVVEELLOOPPMMEENNTT AANNDD AANNAALLYYSSIISS OOFF AALLTTEERRAATTIIVVEE FFAAUUNNAA DDEEAALLEERR

WWHHOOLLEESSAALLEERR LLIICCEENNSSIINNGG PPOOLLIICCYY OOPPTTIIOONNSS

The preceding analysis has examined the existing requirements of the NSW Kangaroo

Management Program, the requirements of FDW licence holders, their commercial

performance, economic theory and its practical application in wild resource based industries

and the key issues raised by stakeholders consulted in this review. These elements have all

been considered in deriving suggested amendments to the existing fauna dealer wholesaler

licensing system in NSW. The existing arrangements and five alternative options are

presented in turn. The options are then assessed in terms of the key kangaroo management

objectives.

The options presented are as follows:-

1. Business as Usual

2. Business as Usual with Endorsement of Sub-licences

3. Business as Usual with Fully Tradeable Licences, No Sub-licences

4. Bring all Sub-licences up to Full License Status and Cap Number of Licences Subject to

Periodic Review

5. No Licences and No Commercial Utilisation of the Take

6. Open Licensing of Fauna Dealer Wholesalers

Individual transferable quotas (ITQ’s) are also considered as add-ons to the above options in

all cases except Option 5. Each option is detailed as to its respective advantages and

disadvantages to determine its merits as an alternative licensing policy option. A multi criteria

approach has been used to assess the alternative policy options to enable those options to be

ranked.



56

77..11 OOppttiioonn 11:: BBuussiinneessss aass UUssuuaall

Key Points 11 current FDW licences; unofficial sublicensing; free roaming across State; licensed sites;exclusive access to existing players; passive management by NSW NPWS Advantages• Perceived stability of industry• Low cost administration• Cost recovery• Ecological sustainability• Economically sustainable• FDW profitability in some years• Active investment by existing players• Good working relationship between

industry & NSW NPWS• Competition among existing players for

supply & markets• Competition from suppliers in other

states and other food sources• Facilitates employment in some remote

population centres• Sub-licences are a de facto open system• Underpins value of existing licences

Disadvantages• Questionable pest mitigation• Lack of transparency does not convey

total community support• Barriers to new entrants constrains

perceived competition• Leads to political interference – issue of

new licences issued at discretion ofMinister

• Perceived influence by large players onNSW NPWS

• Limited FDW perceived to influencetheir monopsony with respect to trappers

• Questionable economic efficiency of sub-licence system resulting in less thanoptimal economic output

• Inherent value of existing licences createsproblems for NSW NPWS in issuing newlicences and creating claims forcompensation

• Not universal acceptance of sub-licencesystem

• Commercial uncertainty for sub-licensees• Risk of philanthropic groups buying

existing licences and shutting industrydown

KMP Compliance Status• Complies with KMP apart from resolution of sub-licence issue



57

77..22 OOppttiioonn 22:: BBuussiinneessss aass UUssuuaall wwiitthh EEnnddoorrsseemmeenntt ooff SSuubb--lliicceenncceess

Key Points Business as usual (Option 1) with active endorsement of sub-licence system. Formalisingthe informal system Advantages• May increase the take as sub-licensees

invest when achieve full licence status• Aligns the informal with the formal

system• Increase transparency of commercial

players• Allows transitional arrangements for new

players into industry• Commercial certainty for sub-licensee• Responsibility for sub-licensee activity

vests with full licence holder• Might allow better development of/and

expanded niche markets

Disadvantages• Sub-licensee has to be financially

independent• Licensees still capture rents (through sub-

licences) that may constrain optimumeconomic outcomes

• Precludes those intending players whohave financial capacity and want to havefull licence status immediately

KMP Compliance Status• Complies with KMP apart from confirmation of active endorsement of sub-licence status

and requirements of sub-licence issue which are technically covered under the existingKMP as sub-licences operate under an existing FDW licence

77..33 OOppttiioonn 33:: BBuussiinneessss aass UUssuuaall wwiitthh FFuullllyy TTrraaddeeaabbllee LLiicceenncceess,, NNoo SSuubb--lliicceennssiinngg

Key Points Business as Usual (Option 1) with the number of licences capped at 11 and those licencesmade fully tradeable but with no sublicensing arrangements. Advantage• Formalises licence conditions as per

KMP• Increase transparency• Makes it easier for NSW NPWS to

administrate the system• Better for existing licence holders by

strengthening exclusivity• Improves value of existing licence

holders assets• Recognises value of existing licences and

accompanying business systems andinfrastructure

Disadvantage• Makes entry for new players more

difficult• Increases perception of monopoly power

of existing players• Increases difficulty of industry entry• Maintains the cap on total licensee

numbers• Leads to a closedown of existing sub-

licence operations as purchase of fulllicence may be prohibitive

• Total take likely to be less as sub-licencedemand is extinguished

KMP Compliance Status• Aligns current commercial system with KMP



58

77..44 OOppttiioonn 44:: BBrriinngg aallll SSuubb--lliicceenncceess uupp ttoo FFuullll LLiicceennccee SSttaattuuss aanndd CCaapp NNuummbbeerr

ooff LLiicceenncceess SSuubbjjeecctt ttoo PPeerriiooddiicc RReevviieeww

Key Points Bring all existing sub-licensing arrangements up to full licence status and cap the numberof licences subject to periodic review of kangaroo supply, capacity utilisation, marketdemand, etc. All licences to be fully tradeable. If at review there was deemed scope foradditional licences there would need to be a call for expressions of interest in new licences.If EOI response is greater than recommended increase in number (provided applicants meetconditions – business plan, financial capacity, etc) then would need to allocate the limitednumber of new licences by some method e.g. ballot or tender. Advantages• Transparent system• Aligns formal and informal system• Create certainty for existing sub-licensees• Removes perception of closed shop• Recognises surplus processing capacity

exists in industry• Managed basis for introduction of new

licences based on effective processingcapacity utilisation

• Allows an increase in licences as demandincreases and prevents the rents beingcaptured by a small number ofindividuals

• Industry and government agree on reviewparameters

• Eliminates the possibility forcompensation that may occur in a totalremoval of licence caps

• Funds raised by tender for new licencesquarantined and directed towards marketsupport activities for kangaroo products

Disadvantages• Possible increased administration cost• Determining review parameters that

enable new licences to be issued• Some recent purchasers may feel

disadvantaged but this is countered bystrengthening licences that are fullytradeable

KMP Compliance Status• Aligns KMP with commercial system• Would need to recognise expanded number of licences as sub-licences are converted to

full licence status



59

77..55 OOppttiioonn 55:: NNoo LLiicceenncceess aanndd NNoo CCoommmmeerrcciiaall UUttiilliissaattiioonn ooff tthhee TTaakkee

Key Points No FDW licences or commercial utilisation of the take. Conservation/animal welfaregroups do not support a commercial harvest or the KMP despite ratification byCommonwealth regulations and the Administrative Appeals Tribunal. Conservation groupsargue that there is a greater economic return in eco tourism than a commercial harvest.Currently, the KMP does not permit commercial harvest in National Parks or the non-commercial zone. This option would see those restrictions apply to the whole State. Advantage• Improve the perception of rangeland and

resource management• Might improve demand for eco tourism• NSW NPWS management requirements

would be easier and less expensive• Reduce the need for NSW NPWS to

acquire land for sanctuary National Parks

Disadvantage• No economic evidence that returns from

eco-tourism outweigh harvest benefits –the two aren’t necessarily incompatible

• Limited community support• Ignores pest mitigation objective• Loss of employment opportunities and

economic activity in remote locations• Ignores comprehensive scientific

evidence of an adaptive sustainableharvest level (quota) and over abundancein the commercially harvested species ingood seasons

• Ignores reality of boom bust populationsdynamics and population demise insevere drought years – might be publicpressure to supplementary feedkangaroos in severe conditions

• No cost recovery• Might be compensation issues with

current commercial operators (FDWs)and pastoral landholders

• If it was done in isolation in NSW itcould increase kangaroo harvest pressurein other states

• NSW NPWS already provides sanctuaryNational Parks in various locationsthroughout the western pastoral zone andincreasing the number and area over time

Compliance Status• Ignores KMP and State and Federal resource management objectives of sustainable

utilisation



60

77..66 OOppttiioonn 66:: OOppeenn LLiicceennssiinngg ooff FFaauunnaa DDeeaalleerr WWhhoolleessaalleerrss

Key Points Open licensing of fauna dealer wholesalers. The current cap of 11 FDW licences would beremoved as per South Australia and Queensland; recurring requests for FDW licences byintending entrants to the industry. May require a phasing in period and some transitionalarrangements to allow adjustment by existing players. Bring sub-licensees to full licencestatus initially and then open up to new entrants. Arrangements may include increasedlicence fees for new licence holders and scaling up of fees for existing licence holders overthe phase in period; the phase in period and transitional arrangements would provide anopportunity for existing licence holders that want to exit the industry to do so. Advantage• Market based system that determines the

number of licence holders• Reduces the barriers for new entrants• Perceived increase in competition• Could encourage new investment in

regional and isolated areas which could,in turn, increase employmentopportunities for trappers

• An increase in the commercial take couldsee a reduction in non-commercialshooting

• May bring new commercial concepts intothe industry

• Transparent system• Removes sub-licensing and aligns KMP

formal and informal systems• Create certainty for existing sub-licensees• Removes perception of closed shop• Ecologically sustainable as the quota

system remains• Prevents rents being captured by a small

number of individuals• May lead to increase in pest mitigation if

market conditions allow increase in take• Align with SA and Qld systems of no cap

on the number of licences• Would allow NSW NPWS to focus just

on conservation management• Provides a basis for consolidation and

rationalisation of the industry

Disadvantage• Possible increase in volatility and

business failure rate because of lowerbarriers to entry

• No guarantee that the market can takeadditional meat and skin products

• Could add to existing processingovercapacity

• Decreases the value of existing licences• Might be compensation issues with

current commercial operators (FDWs)• Queensland experience has shown that

the total take declines• Possible increased administration cost

with larger number of operators, althoughthese would be passed on to industry

• Possible demise of existing weakeroperators

• With more players possible increase incompromise of food safety standardsfrom inexperienced new entrants –requiring more intense regulatorymanagement

Compliance Status• Technically covered under the KMP as sub-licenses operate under a FDW licence.

Position should be clarified to enable KMP to reflect current commercial practice



61

77..77 IInnddiivviidduuaall TTrraannssffeerraabbllee QQuuoottaass

Key Points The introduction of ITQs is not an option in itself but could be an “add-on” to each of theoptions discussed above (except Option 5). The ITQ’s would relate to individual FDW. Theadvantages of an ITQ system would not be realised until the full quota is being taken on arelatively consistent basis. The introduction of ITQs would involve the allocation ofkangaroo harvesting rights to individuals. These rights would be in the form of units thatrepresent a proportion of the total quota within a zone (or sub-zone). Quota units could betraded both permanently and temporarily (leased) within a set of trading rules (e.g. tradesrestricted to a certain geographical area within a zone). Advantages• Avoids the over-capitalisation of

operations associated with a competitivequota system (when the full quota isbeing taken)

• Ensures that the resource is utilised in aneconomically efficient way (as long asthe costs of managing the systems are nottoo high)

• Would increase resource access securityfor quota holders

• Increased resource security wouldprovide a better environment for industryinvestment

Disadvantages• From fisheries experience the quota

allocation process can be lengthy,acrimonious and expensive

• Determining a set of workable tradingrules could be difficult (and thus lengthyand expensive)

• Relatively high compliance costs oncethe system is operational

• Unlikely to work effectively unless thetotal quota is being taken on a regularbasis

KMP Compliance Status• Could be accommodated under KMP and quota management provisions

77..88 SSuummmmaarryy ooff AAlltteerrnnaattiivvee LLiicceennssiinngg PPoolliiccyy OOuuttccoommeess

The 6 fauna dealer wholesaler licensing options have been assessed in terms of the following

key objectives:-

1. Ecological sustainability in compliance with federal government regulations

2. Economic sustainability and efficiency

3. Effective pest mitigation

4. System with acceptable transaction cost and positive benefit /cost

5. Cost recovery

6. Community support- equity; transparency and industry /government partnership

7. Compliance with international obligations



62

An analysis of the licensing options is summarised in Table 11. We have used a multi-

criteria analysis approach to examine the options. The coding of compliance with the key

objectives is based on one star being poor compliance and 5 stars being excellent compliance.

This paper does not have as its intention the recommendation of a preferred option but rather

providing the framework for ranking a number of options which then will enable the NSW

NPWS and the principal stakeholders to decide which will be the preferred fauna dealer

licensing option in NSW given the relative advantages and disadvantages associated with each

option.

It should be noted in the analysis presented in Table 11 that all criteria have equal weighting.

However some stakeholders may have differing perspectives of the key objectives (criteria)

and may even consider some objectives irrelevant in light of the relative importance they

place on other issues. The sum of the unweighted scores provides a basis for ranking the

options.

Consequently the ranking of the options is as follows:-

Rank Policy Option

1 Open Licensing of Fauna Dealer Wholesalers

2 Bring all Sub-licences and Restricted licences up to Full Licence Status and Cap

Number of Licences subject to Periodic Review

3 Business as Usual with Endorsement of Sub-licence to Full Licence Status

Equal 4 Business as Usual

Equal 4 Business as Usual with Fully Tradeable Licences with no Sub-licensing

6 No Licences, No Commercial Utilisation of the Take



63

Table 11 Summary of Licensing Options

Criteria Option 1 Option 2 Option 3 Option 4 Option 5 Option 6

Ecological sustainability ��

Economic sustainability &efficiency ��

Effective pest mitigation ��

Acceptable transaction cost ��

Cost recovery ��

Community support ��

Compliance withinternational obligations ��

Score 23 26 23 27 19 30

Rank 4 3 4 2 6 1

Option 1: Business as Usual

Option 2: Business as Usual with Endorsement of Sub-licences

Option 3: Business as Usual with Fully Tradeable Licences, No Sub-licensing

Option 4: Bring all Sub-licences up to Full Licence Status and Cap Number of Licences Subject to Periodic Review

Option 5: No Licences and No Commercial Utilisation of the Take

Option 6: Open Licensing of Fauna Dealer Wholesalers



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Consequences of a Possible Deregulation Scenario in NSW

The highest scoring options were those that involved an increase in the number of FDW. It

should be stressed however that there is little significant difference between Options 2, 4 and

6. The critical issue is maintenance and growth of the commercial kangaroo industry. That

industry however, should operate being mindful of competition policy and the need for

transparency of government operations. Equally a change in government policy should be

mindful of the lessons learned from the deregulation of the commercial industry in

Queensland and South Australia.

Immediate and open moves to a totally deregulated commercial kangaroo industry would

most likely see the entry of new players who may be under-capitalised, and significant market

destabilisation while players fight for market share. This is likely to be accentuated as the

NSW kangaroo population recovers from the 2002-2003 drought. A change in licensing

policy therefore needs to be mindful of timing, commercial consequences and the retention of

a viable commercial kangaroo industry in NSW to enable the objectives of the Kangaroo

Management Program to be achieved. The following section examines transitional

arrangements that will move the NSW industry towards deregulation as in Queensland and

South Australia, while attempting to minimise negative commercial impacts. The existing

players in the NSW commercial industry want to see the continued development of a highly

professional and profitable industry, but also, an industry working in partnership with

government regulatory bodies. This can only occur with a focus on improved competition and

transparency in all aspects of the commercial kangaroo processing and marketing industry in

the State.



65

77..99 TThhee TTrraannssiittiioonn TToo AAnn IImmpprroovveedd FFDDWW LLiicceennssiinngg SSyysstteemm

Whatever decision(s) is taken in resolving the licensing issue, consideration must be given to

the viability of existing FDW businesses and the positive economic and social impacts these

businesses have on remote and regional communities. As such there is no one perfect solution

or “silver bullet” cure to the competing conflicts that are inherent in the sustainable

management of wild life populations. Consequently, there is an argument that any change

should include transitional arrangements with inherent flexibility that reflects the market

volatilities associated with the kangaroo products industries. An example of such a

transitional arrangement is shown below (Figure 11).

Figure 11 Suggested Transition to an Improved Better Managed Fauna DealerWholesaler Licensing System

Kangaroo population volatility and market demand and competitiveness will limit the number

of commercially viable licences to the extent that it is unlikely except in severe population

declines where kangaroo product market demand will exceed supply. What is required is the

Yr 1 Businessas Usual

Yr 2 Business asusual andconvert Sublicences toFull licencestatus

Yr5 Independent Review Convert tolimited opensystembased ontender pricing ofnew licences Tenderrevenue toindustrymarketingprograms

SubsequentYears Regularlyreview licencecapacityrelative tomarket andkangaroopopulationstatus

Rel

ativ

e nu

mbe

r of F

DW

Lic

ense

es

Time



66

maintenance and growth of a professional commercial industry to ensure utilisation of the

quota authorised kill each year. The demise of a commercial kangaroo industry to utilise that

kill is not a viable option.

Given the current population decline because of widespread drought, there is likely to be

excess processing capacity until kangaroo populations recover to pre-drought levels.

Consequently, it is recommended that the only amendments in the short-term would be to

convert existing sub-licences to full licence status. The rationale for this decision is that there

is:-

� Surplus capacity in the industry at present;

� Some players who may want to exit the industry in the short to medium-term;

� Some new entrants willing to purchase existing licences; and

� The need to remove the sub-licence anomaly to a better managed and controlled

licensing system by NSW NPWS.

While there is a shortfall on quota take, the proposed system will be functional with the

Department and industry working in partnership. However, if the situation arises where there

is full quota take, then a whole new set of issues comes into play in terms of quota allocation.

To date, access to the resource (quota) has not constrained industry output, as evidenced by

the rarity of full quota take in any zone. If market demand increases to the point where quota

does constrain output, the allocation of access rights will become increasingly important. Who

has entitlements and how are they allocated will become issues that are important to the

economic efficient operation of the industry.

The advantages of the suggested transition approach are:-

� The kangaroo population in NSW in the foreseeable future is likely to be volatile.

Consequently, any industry change program has to ensure that outcomes do not lead to a

destabilisation of the commercial industry;

� Recognition of the important role of the commercial kangaroo industry in processing

and marketing the quota take;

� Recognition that existing players have substantial investment in their operations, plant

and equipments and licences and a blanket opening up of the system could significantly

devalue those investments, put remote location employment under threat; that the



67

market outlook for kangaroo based meat products in domestic and export markets is still

fragile and volatile; and that there is currently significant over capacity in the processing

industry that needs to be either fully utilised or withdrawn from the industry;

� That NSW NPWS has to regain regulatory control and management of the licensing

system with respect to sub-licences which are a de facto open system; and

� That any change in the system at the current time should not be precipitous given the

dramatic drought induced decline in kangaroo populations that will see significant

decrease in quota allocations over the next few years.

The disadvantages of the proposed transition system are:-

� Existing players will possibly see the sub-licence conversion to full licence without

payment for licence as increased competition. Equally it can be argued that existing

licence holders have created the sub-licence system and this system needs to be

formalised and subject to the full regulatory control of the NSW NPWS; and

� Some new players who want to obtain a FDW licence will be precluded from this in the

short-term. However, as the weaker players exit the industry as a result of poor supply

and market conditions those intending entrants have the opportunity to buy or access

those licences.

Ultimately the decision on the preferred licensing option needs to be made by NSW NPWS

working with the various industry stakeholders and ensuring that ecological and economic

sustainability objectives are achieved.



68

88 RREEFFEERREENNCCEESS

Administrative Appeals Tribunal, (2003), Decisions and Reasons for Decision [2003]

AATA236.

Australian Wildlife Protection Council, 2002, Comments on the Draft Queensland Kangaroo

Management Plan, 2002.

Environment Australia (1999), Commercial Harvesting of Kangaroos in Australia.

Kangaroo Industries Association of Australia (Inc). 2003, Towards Better Kangaroo

Management.

NSW Department of State and Regional Development and Australian Museum, (2002),

Defining Marketing Opportunities for Australian Native Products- Report from the FATE

Marketing Think Tank Broken Hill, November 27-29, 2002.

NSW Kangaroo Management Advisory Committee, Minutes of Advisory Committee

Meetings 2001-2003.

NSW National Parks and Wildlife Service, New South Wales Kangaroo Management

Program 2002-2006.

Queensland Parks and Wildlife Service, (2003) Wildlife Trade Management Plan for Export –

Commercially Harvested Macropods, 2003-2007.

Ramsay, B.J., (1994) Commercial Use of Wild Animals, Bureau of Resource Sciences

Rural Industries Research and Development Corporation, 2002,Kangaroo Pet Meat Survey,

Report No. 02/145

Rural Industries Research and Development Corporation, 2003, The Kangaroo Industry – Its

Image and Market. Report No.02/166



69

South Australian Department for Environment and Heritage, 2002, The Macropod

Conservation and Management Plan for South Australia.

Western Australian Department of Conservation and Land Management, 2002, Management

Program for Red Kangaroos in Western Australia, 2003-2007”.

University of Sydney, Orange Agricultural College, 1998, Kangaroo Marketing for

Landowners- Exploratory Action Research for the Tilpa Rangeland Investment Company.



70

AATTTTAACCHHMMEENNTTSS

1. List of People and Organisations Consulted During This Review

NAME ORGANISATION

Keith Allison Rural Lands Protection BoardBeryl Anderson World League for AnimalsGreg Bates Vacik Pty LtdRita and Ray Borda Macro Meats Pty LtdKeith Bourke Walgett Game Meat Pty LtdSandy Bright Pastoralists Association of West DarlingJoan Papayanni/Jasmine Cox Animal Societies Federation of NSWPat Cuffe Red Gum Commodities Pty LtdRay Davis Australian Meats Pty LtdSally Egan Queensland Department of EnvironmentCraig Harwood Overseas Game Meat Export Pty LtdJohn Kelly Kangaroo Industry Association of AustraliaJoe Lane NSW Farmers AssociationDuncan Leadbetter SingletonLisa Farroway SA Department of Environment and HeritageJoshua Gilroy NSW NPWSBrian Jackson Highland Pet foodsMrs F. Johnson SydneyDavid Keith Aussie Game Meats Pty LtdAndrew Lewis NSW KMACTheo Livanes P&A Game Meats Pty LtdBill McDonald Stokari Pty LtdDan McInnes Balranald Game Meat Trading Pty LtdRick Laing Dovuxe Pty LtdMichael Mulligan Vacik Distributors Pty LtdNicole Payne NSW NPWSMiss E. Pullin SydneyLou Revelant NSW Agriculture - AgSellDavid Stanborough CurlwaaMandi Stevenson Bombala Rural Lands Protection BoardJoe Sullivan NSW Farmers AssociationTom Thompson Pet Care (Co-op) Pty LtdRod White Walgett Game Meat Pty LtdGeoff Woods NSW Agriculture



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2. Thought Starter Questions Used in Consultations

Questions for NSW Fauna Dealer Wholesalers

1. Describe current operation - current throughput , # of processing plants , employment, #

of chiller boxes, coverage across zones, market focus, processing capacity, capacity

utilisation, cost of procurement network

2. Estimated investment in plant and equipment

3. Operating capital requirements

4. Break even throughput requirements for financial viability

5. How does profitability cash flow vary with changes in seasonal conditions

6. How can the current process and licensing requirements be improved

� Licence requirements

� Compliance costs

� Impediments to operation

� Inconsistencies between departments eg NPWS, Safe Food NSW, NSW Ag

7. If you were to design a new system what options do you think are realistic- define the

options, identify advantages and disadvantages

8. Comments on sub-licensing

9. What is the impact of going to an open slather approach. Why would it succeed or fail

for the industry as a whole? How would it affect your business specifically?

10. If the system were changed (through legislation) to allow freely tradeable licences and

the number of licences were capped (say at 13), would that affect your current business

in any way (structure, operations, etc.)? Short-term? Long-term?

11. Is the market growing – pet food, human consumption, skins - what is needed to grow

the market to match supply and demand

12. What should the criteria / barriers to entry be for new fauna dealer wholesalers

13. Compare the advantages of the NSW system against that in Qld and SA

14. Should the pest mitigation kill be allowed to enter the commercial system if the

kangaroos are shot be professional shooters or land holders that have been accredited to

professional shooter level



72

3. Advertisement Calling For Submissions to the Review

Submissions invited on Fauna Dealer (Kangaroo) licensing policy

National Parks and Wildlife Service (NPWS) is responsible for licensing all facets of

commercial kangaroo harvesting and non-commercial kangaroo culling.

Processors of kangaroo products must be licensed as Fauna Dealers to purchase and sell

kangaroo meat and skins. Currently policy restricts the number of licensed Fauna Dealers in

New South Wales to 11.

NPWS has contracted Macarthur Agribusiness to conduct a review of the Fauna Dealer

licensing policy. The review will involve a comprehensive analysis of the existing policy and

the policies that apply in other states and similar industries, and potential alternative policies

and their implications.

You are invited to make written submissions regarding Fauna Dealer licensing for

consideration during the review.

Further information can be obtained by telephoning Mr Warwick Yates on (07) 3831 7330.

Submissions should be made in writing by 25 July, 2003 to:

Fauna Dealer Review

Mr Warwick Yates

Macarthur Agribusiness

GPO Box 2452

Brisbane QLD 4001

Privacy Statement:

Your comments on this proposed review may contain information that identifies you and is

defined as “personal information” under the NSW Privacy and Personal Information



73

Protection Act 1998. The submission of personal information with your comments is

voluntary.

Please note that all submissions received will be considered by Macarthur Agribusiness as

part of their review, and will be discussed with NPWS in preparing the final report.

Copies of all submissions received will be made available for public inspection, by

arrangement, in the library of the NPWS Head Office at 43 Bridge Street, Hurstville 2220

(telephone 02 9585 6444). All submissions received will be stored in NPWS’s record system

upon completion of the review for a period of two years.



74

4. Historical Populations, Quota and Take Statistics by NSW Kangaroo Management

Regions

RED AND GREY KANGAROO ANNUAL QUOTAS ANNUAL CULL FIGURES AND RELATIVE PERCENTAGES

Year Quota Cull % Quota 1973 213,000 132,000 61.97% 1974 216,000 95,000 43.98% 1975 212,000 123,000 58.02% 1976 319,400 96,000 30.06% 1977 321,000 167,200 52.09% 1978 345,000 220,000 63.77% 1979 645,000 520,000 80.62% 1980 645,000 619,023 95.97% 1981 694,500 488,647 70.36% 1982 843,000 664,342 78.81% 1983 843,000 400,477 47.51% 1984 500,000 229,484 45.90% 1985 300,000 326,028 108.68% 1986 577,000 444,509 77.04% 1987 577,000 473,454 82.05% 1988 730,000 421,200 57.70% 1989 804,000 500,355 62.23% 1990 1,172,000 633,000 62.23% 1991 1,520,000 856,406 56.34% 1992 2,074,000 796,007 38.38% 1993 1,663,600 775,220 46.60% 1994 1,409,100 971,694 68.96% 1995 1,146,626 977,459 85.25% 1996 1,206,000 1,149,917 95.35% 1997 976,000 897,937 92.00% 1998 1,175,140 940,789 80.06% 1999 1,532,916 937,642 61.17% 2000 1,416,285 883,478 62.38% 2001 1,418,212 1,169,500 82.46% 2002 1,920,100 1,441,276 75.06% 2003 2,107,720 Source: NSW NPWS, 2003



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5. Licence Requirements under the NSW Kangaroo Management Program 2002-2006

5.1 Occupier’s Licence

National Parks and Wildlife Act 1974 – section 121

Factors to consider before an Occupier’s Licence is issued

Commercial

� The application must be issued by an authorised NPWS officer.

� The application must have the landholder’s original handwritten signature. Faxes and

photocopies will not be processed.

� The number of each species authorised to be taken is within the commercial quota for

that species in that Kangaroo Management Zone (see section 3).

� The licence will not be issued for skin-only shooting.

� The occupier can nominate only one person licensed under s.123 to shoot the

kangaroos.

Non-Commercial


� The landholder can shoot the kangaroo themselves or nominate one other person

licensed under s.120 or s.123 to operate in accordance with the Occupier’s Licence.

� Faxed copies of non-commercial applications will be processed.

Licence requirements for auditing

� All kangaroos must be shot in accordance with the Code of Practice for the Humane

Shooting of Kangaroos, Appendix 1.

� Non-commercially taken kangaroos cannot be sold. The landholder can use any part of

the kangaroo for their own use e.g. meat for dogs, baiting programs.

� The licensee will not possess or offer for sale any kangaroo carcass containing a bullet

wound (other than kangaroos shot in the brain in accordance with the Code of Practice

for the Humane Shooting of Kangaroos).

� Commercially taken kangaroos must be sold to the holder of a Fauna Dealer

(Wholesaler) licence issued under s.124 of the Act.

� Commercial and non-commercial licensees must supply a return on the form provided

by NPWS.



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5.2 Issue of Tags

National Parks and Wildlife Regulations

Factors to consider before issuing of tags – commercial

� The prescribed fee must be paid to NPWS for the tags.

� Plastic tags must be issued in a quantity equal to the number of kangaroos a person is

authorised to take under the Occupier’s Licence.

� The tags must be from a series issued specifically for that year, individually numbered

and a different colour for each consecutive year.

� Tags are issued for a specific property and are not transferable to another property.

� The tags must be self-locking.

� The landholder can choose to receive the licence and tags or elect for the holder of a

licence issued under s.123 to receive them directly.

Requirements for auditing

� Tags must be attached to the skin of kangaroos commercially utilised and locked in to

prevent removal.

� A tag can only be removed from the kangaroo skin during the skin tanning process.

Factors to consider before issuing of tags – non commercial

� Cloth tags must be issued in a quantity equal to the number of kangaroos the person is

authorised to take.

� Tags are issued for a specific property and are not transferable.

� The landholder can choose to receive the licence and tags or elect for the holder of a

Trapper’s Licence (s.123) or General Licence (s.120) to receive them directly.

5.3 Trapper’s Licence


Factors to consider before a Trapper’s Licence is issued


� Only the four kangaroo species nominated under this management program can be

utilised under the Trapper’s Licence.



77

� The applicant must hold a current Firearms Licence that allows the person to posses and

use the appropriate firearm.

� The applicant must have successfully completed a firearms accreditation for Trappers

through the NSW Firearms Safety Awareness Council, and their accreditation must be

current.



Shooting of Kangaroos, Appendix 1.

� The licensee will not possess or offer for sale any kangaroo carcass containing a bullet

wound (other than kangaroos shot in the brain in accordance with the Code of Practice

for the Humane Shooting of Kangaroos).

� Kangaroos must not be mustered or trapped before they are taken.

� The licensee must provide to the NPWS return/s for each Occupier’s Licence where the

licensee was the nominated Trapper.

� Trappers must attach a plastic tag to each kangaroo taken.

� The licensee shall return all unused tags to the NPWS Area Office of issue within 10

days of the expiry date of all commercial Occupier's Licences upon which the licensee

was the nominated Trapper.

� All kangaroos must be sold to the registered premises of a Fauna Dealer (Wholesaler)

licensed under s.124 of the Act.

� Kangaroos must be sold as whole carcasses with the skins attached.

� A licensed Trapper may temporarily store kangaroos in a chiller prior to sale to a Fauna

Dealer (Wholesaler). Only kangaroos shot by that Trapper can be stored in the chiller.

� The applicant must successfully complete NSW TAFE course 5725 – Australian Game

Meat Hygiene and Handling within three months of being licensed.

5.4 General Licence


Factors to consider before a General Licence is issued (to take kangaroos)

� The person to hold the General Licence has been nominated by the landholder to

operate in accordance with a non-commercial Occupier’s Licence.



78

� The nominated person does not hold a Trapper’s Licence.

� The nominated person holds a current Firearms Licence that allows that person to

possess and use the appropriate firearm.


� The nominated person must operate in accordance with terms and conditions of

Occupier’s Licence.


Shooting of Kangaroos.

5.5 Fauna Dealer’s Licence

National Parks and Wildlife Act 1974 – section 124.

Factors to consider before a licence is issued


� An authorised officer may issue registration certificates for each of the premises at

which a person licensed carries on business as a Fauna Dealer in New South Wales.


� Fauna Dealers must supply a return to NPWS on the form provided by NPWS.

� A Fauna Dealer shall not carry on business as a Fauna Dealer in New South Wales at or

on any unregistered premises.

5.6 Skin Dealers Licence




� An authorised officer may issue registration certificates in respect of each of the

premises at or on which a person licensed exercises or carries on business as a skin

dealer in New South Wales.



79


� Skin Dealers must supply a return to NPWS in the form provided by NPWS.

� A Skin Dealer shall not carry on business as a Skin Dealer in New South Wales at or on

any unregistered premises.

5.7 Import and Export Licence

National Parks and Wildlife Act 1974 – section 126 and Regulation.


� An authorised NPWS officer must approve the application for an import licence or an

export licence.

� The various relevant provisions of the Regulation. Licence requirements for auditing

� Returns provided to NPWS in the form provided by NPWS.

review of kangaroo fauna dealer wholesaler licensing in …€¦ · figure 2national estimated red...

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