The State Government will support farmers who want to grow opium, one of the most dangerous but extremely lucrative crops, after the Abbott Government decided to allow poppies to be grown outside Tasmania.
Federal Cabinet has decided to open up the cultivation of opium to other States and Territories, subject to Australia meeting its international obligations to combat drug trafficking and misuse under the 1961 Single Convention on Narcotic Drugs.
Tasmania produces half the world's supply of opiate alkaloid, which is used to produce painkillers including morphine and codeine and 85 per cent of the global supply of thebaine, an extract used to make OxyContin.
Health Minister Peter Dutton wrote to State and Territory counterparts last week to seek approval for a five-year agreement on expanding production, with a review after three years on reporting obligations, security and chain of supply.
The opiate alkaloid industry generates at least $100 million for Tasmania, or about a tenth of the Apple Isle's farm revenue, but global giants GlaxoSmithKline and Johnson & Johnson want some production on the mainland in case of crop failure.
Victoria and the Northern Territory have legislated to allow the production of poppies on the expectation demand for medical opioids will grow in line with a burgeoning middle-class in Asia, especially in India and China.
State Agriculture Minister Ken Baston has offered encouragement to farmers considering growing poppies.
"No one has contacted my department in recent times with a proposal to grow opium," he told The West Australian.
"However, if it is shown the production of poppies was a viable and profitable crop for WA producers, then we would support it."
GlaxoSmithKline ran a two-year opium poppy trial in the Ord River irrigation area in 1999 with a view to a "non-seasonal" alkaloid supply in May-October but results were disappointing because of hot weather, insect attack and mineral deficiency.
General manager of GSK's opiate division Steve Morris said poppies were ideal for rotation in irrigated land used for potatoes and other vegetables. He said the push to get into the mainland was driven by a need to secure supply in the event of extreme weather.
"We're focused on Victoria, but once that is established we will consider elsewhere, depending on demand," Mr Morris said.
Tasmanian Liberal senator Richard Colbeck, the parliamentary secretary to the Minister for Agriculture, said opium was a dangerous product subject to tight controls and oversight.
"The Commonwealth's strongest desire is to ensure that Australia retains its high reputation as a secure location to grow this product," Senator Colbeck said.
"We don't want to disadvantage the Tasmanian industry or economy and negotiations with other States will have that in mind."
The Federal Government controls licensing of opiate alkaloid facilities, production and export.