Eric Hutchinson (Lyons, Liberal Party) Share this | Hansard source

It is a real pleasure to speak on the Rural Research and Development Legislation Amendment Bill 2014. I note the member for Indi's comments, but in working towards my contribution today I spoke to Australian Wool Innovation. They are over the moon about the $100 million—$100 million that needs to be used collaboratively. They welcome the fact that there is money on the table there that the federal government has invested in research and development that will need to be leveraged with the private sector and industry and that will need to be leveraged also with the universities and higher education institutions. The essence of this bill is the provision of an extra $100 million over four years to the rural and research development corporations with the clear intention to boost agricultural productivity growth—indeed, in collaboration that will benefit most of all those people at the farm gate.

The bill implements a 2014 budget commitment by this government to change the way that government pays for its membership to international commodity organisations and the regional fisheries management organisations. We understand that that is a fact of life, when we have inherited a budget mess like we have. It also reduces the red tape burden currently imposed on some of the rural research and development corporations. These organisations in turn improve the trading environment for agricultural products by funding activities of benefit to our rural industries and the community in general, including research and development on issues of global significance, not least food security.

Most importantly, this bill paves the way for $100 million in additional funding over the next four years for Australia's rural research and development corporations that will be leveraged with universities and the private sector. Investment in rural research and development is an important part of the Australian government's policy for a competitive agricultural sector. There is a strong link between research and development and agricultural productivity growth, with the research and development investment delivering productivity returns that far exceed indeed the cost of that investment.

However, in recent years the productivity growth of Australian agriculture has slowed somewhat. This additional funding will deliver practical research to help farmers to be more productive and ultimately more profitable. This is funding for on-the-ground research and cutting-edge technologies that support our agriculture, fisheries and forestry industries. It is vital that our Australian farmers and producers remain competitive in international markets where two-thirds of their product goes. We should never forget that, that we are an exporting nation and that two-thirds of the food and fibre, and more so in the case of fibre, ends up overseas.

We expect research and development corporations to form alliances with institutions like the University of Tasmania, to develop exciting projects to keep our farmers and rural producers at the forefront of agricultural research. That leads me to what I want to focus on today—that is, the National Irrigation RD&E Program for Tasmania. Investment in this space is critical for productivity growth. The Tasmanian Institute of Agriculture, TIA, is a collaboration, owned jointly and managed jointly by the University of Tasmania and the Tasmanian state government.

The governance of the irrigation and extension work within TIA is done by an outstanding group of industry representatives, including Marcus McShane from the Tasmanian Farmers and Graziers Association; Allan Barr from the third largest agribusiness in Australia, Roberts Ruralco, and my former boss; Scott Schilg from NRM North, a bike-riding colleague; Richard Gardner, one of my oldest friends who represents the Midlands Water Group; Chris Thompson from Macquarie Franklin who has a wealth of knowledge in regard to the design and implementation of the irrigation schemes that we are already seeing around Tasmania; David Kay from Rabobank, who brings a commercial focus to the governance arrangement; and Caroline Brown from DPIPWE. It is a most formidable and competent governance organisation to support the work of TIA. TIA's director Holger Meinke and Associate Professor Rohan Nelson are responsible for the National Irrigation RD&E Program for Tasmania.

In trying to summarise exactly what maximising productivity out of irrigation investment in Tasmania really means, it is maximising productivity using the least amount of water and the least amount of energy. Essentially, that is what R&D in irrigation is all about. We know that this has a national significance and indeed an international significance, because by 2050 we will have a population of nine million. We have to feed and clothe those people, and that is indeed a challenge. That challenge is not going to be wholly the responsibility of Australia and it is certainly not going to be the responsibility of Tasmania—it simply does not have the capacity.

Already, we have seen in my state $310 million invested by the federal government, the Tasmanian government and private investors in irrigation infrastructure. In addition to that, another $265 million has been made in investments on farm, be that through dams or piping or water application systems—pivot irrigation or, in the case of more intensive horticulture, drip irrigation systems. One hundred and fifty gigalitres of additional irrigation water will be available for irrigators when all the planned schemes are brought into operation. To put that in context, the irrigation capacity within my home state of Tasmania and the irrigable land is comparable to the Ord River and the Gilbert and Flinders schemes, and one of the most significant investments that this nation has seen in irrigation infrastructure since the mighty Murray-Darling rivers development.

The critical difference is that Tasmania's expansion of irrigation builds on existing high-value, temperate agriculture, which is close to the population centres in my state and close to a ready workforce. Multiple small catchments are managed individually to make sure that they are sustainably governed and managed appropriately on an economic basis but also a sustainable and environmental basis. There will be over $500 million invested in agriculture irrigation schemes within my home state once the tranche 2 irrigation schemes are delivered which includes the southern highlands scheme in my electorate, the Scottsdale scheme in the electorate of Bass, the Circular Head scheme in the electorate of Braddon, the Swan Valley scheme and the north Esk scheme also in the electorate of Lyons.

The contribution of R&D is significant. I note the Tasmanian government's ambitious target to increase the value of the output of agriculture at the farm gate in my state between now and 2050 from about $1.2 billion currently annually to more than $10 billion. It is a very ambitious target. But as the West report in 2009 suggested, increases of this magnitude were indeed technically feasible, if we focus on the things where Tasmania particularly has a competitive advantage. That is around high-value horticulture; dairy, where we have a natural competitive advantage in terms of the cost of production, being able to produce milk with less grain than is normally required; viticulture; and intensive livestock operations. If 80 per cent of the $10 billion target is to be achieved by irrigated agriculture, the value generated from irrigation water needs to be increased from $3½ thousand per megalitre to nearly $16,000 per megalitre. They are enormous challenges; therefore, every bit of R&D is required to make sure that we can deliver on that potential and that opportunity.

The basis for some of the projects that we will see and the way we will achieve that significant increase in the value of the agriculture and horticulture sectors at the farm gate involve a few major projects: soils and drainage; agronomy and the different varieties appropriate for my state—grains and the different horticultural crops; precision agriculture, which will be increasingly important; whole-farm system modelling; value chains and food processing; and extension and education.

Probably no better example of the importance of education is my own experience and the work that I did before I came to this place, particularly around price risk management and encouraging the use of forward selling, encouraging the use of futures—contracts for wool growers to control one of the variables that they have within their businesses. They cannot often, as you would well understand, Deputy Speaker, control whether it rains or it does not rain. One of the ways they can have an impact—it is a bit like fixing a fence with a set of wire strainers; there are certain jobs you can do with certain tools—is understanding what is a good price, an average price or a poor price helps farmers make better decisions, and that comes with education. So there are many opportunities and the benefits will be enormous and wide ranging.

Indeed, the dairy industry will expand to meet growing world demand, through increased pasture production and better utilisation of feed grain, particularly around the expansion of the grains industry. A very large proportion of the grain use within the dairy sector is imported into our state and we are looking at ways of using irrigated grain crops to take some of those yields from about four tonnes a hectare, which traditionally is the case in non-irrigated grain varieties, to up to 12 tonnes per hectare, which is a significant increase. That is what we need. The benefits that will flow to the dairy industry as a result of being able to grow more grain in Tasmania will be significant.

Expansion of intensive horticulture and viticulture, cool climate fruits, vegetables and wine and the government's investment in infrastructure—such as $38 million to extend the Hobart airport—will give increase our exports of horticultural products into parts of Asia which at the moment are difficult to access. Tasmania has always had a reputation and a capacity to produce and be involved in very high-value specialist plant crops like, for example, opium poppies, a very important industry in my state where real knowledge has been built up by producers and processors alike. Then there are pyrethrum, essential oils, specialty grains and the production of pasture and vegetable seeds as well.

It is an enormous task. I look forward to seeing the application which no doubt the university and TIA will make through a collaborative approach to, I suspect, the Grains Research and Development Corporation and some of the other and research development bodies. As I said before, R&D, when it comes to irrigation, essentially means maximising our productivity, using the least amount of water, being smart and efficient with it, and using the least amount of energy. This is indeed what irrigation R&D is all about.

It would be remiss of me in the small time I have left not to mention the industry of which I was apart from nearly 25 years—that is, the wool industry. There are some great examples where there has been collaborative investment through AWI. As the member for Indi said, there are some excellent examples. In the case of Tasmania, it used to be the eight by five program. It is now Sheep Connect Tasmania, the leading sheep program, which works with both MLA and also Australian Wool Innovation to do some really great work. Indeed, with some of the projects we are seeing at the moment in Tasmania on the extension network, a staggering 97 per cent of farmers said they would make changes to their business and that these changes would result in more than $5,000 worth of benefits directly to their business. There is indeed value in collaboration. I cannot speak highly enough about what has been invested by the Minister for Agriculture and the federal government through this $100 million. It will be used smartly.

We must make the most of our scarce resources. There is no more important issue than productivity and research and development if Australia is going to be competitive in future in a space where we have always been very strong, but we cannot rest on our laurels. Thank you for the opportunity.

See this speech in context