Wednesday, 23 June 2010
Farm Household Support Amendment (Ancillary Benefits) Bill 2010
Before I was interrupted I was focusing on the areas in my electorate that had missed out on a good season and who, unfortunately, had their EC cancelled in March following a visit from the National Rural Advisory Council during November. I pointed out that NRAC visited the upper north cropping district in the first week in November and in the second week of November we were hit with a record heatwave. The crops that looked so good had many of their yields halved. There was a late change to the season after the assessment had been made.
On Eyre Peninsula around the Cowell, Cleve, Arno Bay and Ceduna areas, they simply missed out on a good season. The EC declaration was cancelled on the strength that the greater area—in the case of Cowell, Cleve and Arno Bay; that is the central Eyre region—had a good season. The centres of Kimba, Wudinna and Elliston had excellent seasons. It was taken on the balance. About one-quarter of the farmers missed out in those areas that I have already pointed out.
For the western region, it was pretty much the same. It was a great season, except if you happened to live just to the north of Ceduna. Indeed, about 20 farmers there, or a few more, experienced a very poor season. Once again, the area was judged on the balance. Those farmers have not exited the drought. They are still well and truly dealing with the effect of it.
With that in mind, I met with the relevant task force. We decided to approach Minister Burke. They came to Canberra and I accompanied them. Minister Burke encouraged the regions to reapply for EC support and to go back through the state minister. So we went back to South Australia and with the support of PIRSA a new application was lodged. I must congratulate the new minister for agriculture in South Australia, Michael O’Brien. He approved the application and it was sent to Minister Burke’s office. Following his commitment to make this process as speedy as possible, it was forwarded to NRAC.
I must say that NRAC have now had that submission for almost two months. I am continually contacted by people under stress within my region wondering how the process is going. I urge them to put their foot on the pedal and make a decision. The stress of the people contacting my office is quite concerning. I have visited a number of the people involved. To watch people lose this lifelong investment and see the pressures that their families are being put under is quite disturbing.
Exceptional circumstances has two components. Those two components are the interest rate subsidy and household support. Almost surprisingly, the household support seems to be the one that is most keenly missed. That is the one that puts food on the table. That is an indication of how difficult the circumstances are for some of these people. In many cases, farmers are just trying to hang on long enough to sell their farms to qualify for exit grants. The exit grants are another difficulty with the current EC package, in that if a mortgage is foreclosed on it is too late to apply for an exit grant. You must have made the decision to leave of your own free will before that day. What happens is that, once people reach this unfortunate position, they put their properties or portions of their properties on the market. But that does not mean to say that they will sell. For the time they are not selling, the debts just keep accumulating. Eventually, if they do not sell quickly enough, the debts reach that trigger point when the banks will move in on them and issue a foreclosure. Then they have no chance to qualify for the exit grant.
As I said, some people are under terrible stress, watching their lifetime’s work and the future of their children go down the drain. As I have said previously, the process of winding down EC across Australia can be supported if other appropriate arrangements are in place. That is what this bill is leading to. I believe that at the moment it as if these people have been taken three-quarters of the way across the desert and left without a horse or a waterbag and expected to make the rest of the distance. The drought has not ended. They are still clearly in the same drought that they were in last year, the year before and the year before that.
To return to the legislation and the trial in Western Australia, it will include farm family support, farm social support, grants of up to $60,000 for building farm businesses, farm planning support, support for stronger rural communities, a farm exit package up to $170,000 and a new measure to put current farmers in touch with former farmers to work through some of the opportunities outside farming.
In an overall sense, this is an admirable range of options—it is just a case of whether or not it will actually make the difference it needs to. I support it in so much as it focuses on trying to build better businesses and better business models and I think that is a good move. Will it meet the demands of the next exceptional drought? I would have to say probably not because, once again, when governments are faced—as almost inevitably they will be, in these kinds of circumstances—with large-scale business failure there will be calls for them to intervene. I am not sure this is going to foot the bill, but it is certainly worth a try. Hopefully, it will promote better and stronger businesses, more aware of their financial position and able to manage the increasingly complex business of farming. Farming involves a good knowledge of electronics, soil analysis, marketing, finance and staff management—just to name a few.
I must say as an ex-farmer it is a fantastic job. It has the wide responsibilities and challenges of a large corporation but is still, largely, a hands-on occupation. And you are rewarded—the smarter you work, the more you are likely to earn. I have enjoyed the challenge of farming. It is a fantastic job. But we farmers can be our worst enemies, in fact—from time to time talking down the industry and discouraging those that may join it. Family members are sometimes actively discouraged from farming. Our agricultural training courses are well undersubscribed, and we struggle to attract the top students. Farmers should be proud of what they do and they should be, in an overall sense, optimistic about their future, because we know that there is going to be not only a continuing demand for agricultural products but also an escalating demand. That is why I support anything that supports farmers to become better at the job. The future of farming in Australia hinges around profitability, adaptability and innovation.
I have raised before, in this place, the continual decline of government support for agricultural research. We expect to have eight to nine billion people in the world by 2050 and 11 billion by 2060. Surely, the greatest moral issue of the generation will be how the world will feed this number. Widespread famine is more than just personal tragedy—and it certainly is a terrible personal tragedy—it is a world security issue. The planet will need to double food production. At the same time, we expect to lose 30 per cent of our arable lands. Those who believe agriculture is a sunset industry are wrong. They have to be wrong, because if agriculture is not a new horizon then all else will fail.
Five million dollars of research funding was cut from the Department of Agriculture, Fisheries and Forestry’s budget last year and, in my state of South Australia, the South Australian Research and Development Institute can expect no more than standstill budgets in the foreseeable future. Investment in research and development is the backbone of the agricultural industry but has been diminishing in real terms for the past 25 years. Climate change, the pressures of international trade, the rising cost of doing business in the Australian economy, the likely rises in inputs and the weakness of the American dollar—which will continue to reduce our competitiveness—all present real challenges for the industry. Periodic drought, pestilence and market collapse inevitably will occur. A profitable agriculture sector is the best chance we have of avoiding periodic requests for assistance. Australia must have a commitment to the world and our own nation to ensure that industries are equipped to meet those challenges, and the best way of doing this is to provide the scientific horsepower to drive adaption and adoption of new technologies.
In some areas we are restricted by cheap politics. In South Australia we are held hostage to the green left, who have opposed any advances in technological agriculture as being somehow bad for the general public. Any new technology promoted by a multinational automatically becomes bad. Where else are we going to find money to develop new technology that costs millions of dollars per product except from major multinationals? Some of these people who feel they have the environment in their best interests are driven by this idyllic view of agriculture a hundred years ago—that, somehow, it was better for the environment than today’s agriculture. That is an unfortunate consequence of the urbanisation of the nation, as city dwellers disconnect from rural activities. There was a time in Australian cities when virtually everybody’s father, uncles or cousins resided on farms and people would travel out from the cities for their summer holidays and have some contact with and some understanding of how food is produced. That is becoming increasingly rare, and children tend to think that milk comes from packets and meat comes from the supermarket. That disconnect is a real threat to agriculture in so much as people do not understand what farmers do, how they do it and how it needs to be done. Those who would inhibit the use of new technologies have a charming view of agriculture and farming—but, if we were to adopt their views, millions of people around the world would starve. One hundred years ago, for instance, our topsoil was washing away and blowing away. Modern farming has made farming in Australia environmentally sustainable—and the technology has made it so.
The influence of the Greens scare campaigns means there are still bans in South Australia on growing GM product, when the rest of the nation has moved on. Indeed, the rest of the world is moving on. We will soon see widespread adoption of these technologies in China and other parts of Asia and we all well know that increasingly—and sometimes disturbingly—an increasing part of our food profile is actually coming from these nations. Genetic modification offers lower chemical use, varieties which will grow on and rehabilitate degraded lands and drought tolerance, and certainly in the future there will be health benefits. Blanket bans are nonsensical. Every product should be assessed product by product, just like any other new product in any market. If there is a new chemical on the market we assess the new chemical—we do not just say all chemicals are good or all chemicals are bad. I urge those that have control over the licensing of GM product in South Australia to get on with the job.
To return to the legislation and this limited trial in Western Australia, I think it is well worth a go. I am not fully convinced it will meet the challenges of the next extended drought in Australia, but there is nothing in this package which is harmful and it may well help—it should help—build better sustainable businesses and farming businesses.