Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on a motion that I have moved. There has been much debate around the world about food security in recent years. This debate has centred mainly around the need to feed a world that is expected to contain nine billion people in a few decades time. In Australia the debate has mostly centred around how our food producers can contribute to that global food demand. The level of debate and concern this year forced the government to develop and release the national food plan green paper. However, the paper, like the government, unfortunately is long on rhetoric but short on substance. It is a paper that demonstrates again no understanding of the problems facing food production and food producers in Australia.

The problem is not complex; it is simple market economics. If a business cannot make a profit then the business closes, and frequently that is what is happening to agriculture and food producers in Australia. On the land we need to make sure that every hectare counts, but many of those doing the work cannot make a living. According to the Western Australian Department of Agriculture, the broadacre region of Western Australia averaged a rate of return to capital of around two per cent over the period 1998 to 2002-03. In comparison, the business world usually works on a minimum acceptable rate of return, or the hurdle rate, of around 12 per cent. There is no doubt that the income drive from food production does not reflect in any way, shape or form the amount of investment required or the work or risk involved. Farm incomes compare poorly to the average Australian income, as demonstrated by the fact that farming families are overrepresented in incomes under $52,000 a year. Members should know that many farming families exist on the income equivalent of welfare incomes despite arduous and often dangerous working conditions. We take these people for granted and expect them to keep producing some of the best quality food and fibre in the world. This should be of significant and pressing concern to the government. But worse still is the number of farming families with a negative income.

So how does the government's green paper demonstrate its understanding of these issues? Well, it does not. The government never puts the words 'farmers', 'growers' and 'viability' together in the 274 pages of the green paper—not once. There is no link even between farm viability and market access in that paper. Nor does it mention rising costs of production, nor farm-gate price, nor return on capital. These are core issues for those in the food production sector. It has one mention of return on investment, but that is in relation to production in other nations. The carbon price is mentioned six times, but it is never mentioned as an additional cost of production for farmers. I read in recent weeks that the managing director of Coles visited Perth to try to mend some of the bridges the company has burned with our farmers and farm producers. The coverage quoted Mr McLeod as saying: 'In the last four years we have seen food deflation for the first time and that is because we are working with suppliers at becoming efficient.' As a farmer said to me on Saturday night, what this actually means is that Coles is working at driving down prices for our suppliers, meaning food producers are looking at further cuts. It strikes me as odd that a man the newspaper has said has earned more than $43 million in salary and bonuses in last four years, which apparently included $15 million last year, appears to be so strongly opposed to farmers making a commercial return. I look at the cuts the government has made to research and development which aims to improve the productivity of farmers, to assist them in continuing to improve their productivity. Improving productivity is the key to what farmers need to do. Cuts that the government has made in a range of core programs certainly do not help food producers in this country. Year upon year, productivity of our farmers has been 2.8 per cent compounding, but in recent times it is back to one per cent. This is why the R&D component is so important, Madam Deputy Speaker. I am very concerned about the viability of farmers, as are those who speak to me on a regular basis. I would encourage other members in this place to get out and actually talk to those doing the work, those who have no capacity to pass on the additional costs of production such as those through the carbon tax, for one example, red tape and green tape. Every cent that adds to growers' costs of production means they are less likely to be able to produce the food and fibre we need into the future.

Sid Sidebottom (Braddon, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

We all know there are sections in the Australian economy that are under great strain, particularly due to issues like the high Australian dollar and increased imports. I do not need to remind members here that the agricultural community is far from immune to these forces. This includes sectors like the processing and fresh vegetable sector, which has a big presence in my electorate. To assess where we are and discuss options for the future, the Australian government is well on the way to delivering the nation's first ever national food plan. This is a commitment that we made at the last election. Following the release of the national food plan green paper by Minister Ludwig on 17 July, extensive stakeholder consultation has been undertaken and continues at this very moment. Feedback from this process is being used to inform the development of the national food plan, which will be released as a white paper in 2013.

The green paper is a discussion document intended to seek the community's views, to stimulate debate and launch the second part of the government's consultation process to develop the plan. The first part was the issue paper released in June 2011. Contrary to the assertions made by the member for Forrest in this motion, the green paper does address producer viability and outlines how current policy addresses issues affecting the food system including agricultural productivity, market access and skills and development. It also discusses potential changes the government may consider to policy programs and governance arrangements. The national food plan green paper sought feedback on a number of possible policy options in relation to improving producer viability, including increasing public expenditure on rural research and development, R&D, over the next 10 years, improving the rural research and development corporation model to enhance its effectiveness and efficiency, which we can do, ways government and business can expand food trade opportunities particularly with Asia, and an industry led working group to prepare a workforce development strategy focusing on ways to better use existing labour and skills initiatives in the agricultural sector.

The government is developing a national food plan to ensure its policies support its vision for a food system where Australians continue to enjoy a sustainable, globally competitive, resilient food supply that supports access to nutritious and affordable food. It is an important step to ensure a more integrated, coordinated and strategic focus to food related policy along the supply chain. The national food plan will link and complement the recently released R&D policy statement and the Australia in the Asian Century white paper.

In addition to the food plan, the government has released the Australia in the Asian Century white paper, which includes a national objective for Australian agriculture and food, and a case study showcasing the significant opportunities for the sector. I draw your attention to chapter 7 of that paper. The national objective outlines the vision for the agricultural and food sector and identifies pathways that will be taken to position Australia to meet the growing demand for food and capture the opportunities of the Asian century. Global food demand is expected to rise by over 30 per cent by 2025, with most demand coming from Asia. Our agriculture and food sector is extraordinarily well-placed to build on its strengths and to capture a healthy share of these growing markets, despite fierce competition. The white paper outlines how Australia can make the most of these opportunities through lifting productivity, enhancing capabilities, securing better access to markets—that in particular is crucial—having a shared interest in food security and building relationships in the region, again, is absolutely essential. Australia can build a food and production system that is globally competitive with productive and sustainable agriculture and food businesses, and a reputation as a reliable supply of safe, high quality food, agricultural products, services and technology to Asia. It also emphasises the importance of leadership and strong policy frameworks.

Productivity growth has been a main driver of the profitability of Australian agriculture and future productivity growth will be a key determinant of future income growth. Productivity growth in Australian agriculture over 25 years to 2011 has been about three per cent per year compared to one per cent across the market sector overall. R&D plays a vital role in supporting productivity growth in Australian agriculture, and the government's matching contributions are a key factor in leveraging industry contributions. We are a strong supporter of R? investing in the order of $700 million a year for rural R&D through cooperative research centres, the CSIRO, universities, RDCs and many other programs.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I would like to take the opportunity today to try to show why the agricultural sector is still such an important part of the Australian economy; the huge contribution rural Australia makes to our wealth; and yet, despite incredible productivity increases, the difficulties that many farmers and farming communities find themselves in. We are used to hearing the debates concerning our nation's productivity and, when discussing our agricultural output, a number of different figures are used. For instance, should we consider the productivity per hectare, per hectare sown, or per capita? Whichever it is, agriculture is impressive, but most particularly so on a per capita basis.

I will take the wheat industry, for example. In 1920, 2.6 million hectares were sown and 1.2 million tonnes were harvested. In 1950, it was 4.9 million hectares sown for 5.9 million tonnes harvested. By 1980, it was 11 million hectares producing 16 million tonnes of grain. By 2010, it was 13.8 million hectares producing 21.8 million tonnes of wheat. Over the last 60 years, from 1950 to 2010, there has been a 300 per cent increase in the value of that crop in today's dollars—from $1.7 billion in 1950 up to $6.5 billion now. Very few industries could boast such growth.

I could supply the same for almost any agricultural product but, in a nutshell, total agricultural production in Australia is around $48 billion and, after value adding and processing, this rises to $192 billion a year, 60 per cent of which is exported—or around one third of our total exports. Export dollars are the ones that pay our bills in the world. They are the hard currency which underwrites our standard of living. With the agricultural sector providing a third of that income, its value to every Australian should not be underestimated.

However, at the same time that this miraculous increase in production and productivity has occurred, many of our rural communities have shrunk. Some have disappeared altogether. In fact, these communities are the victims of the productivity increases that have been demanded by the sector, and it is not likely to stop. Every year, farmers produce more product with fewer people because they have to. In 1920, the population of Australia was 58 per cent non-metro and 32 per cent rural. By 2010, 38 per cent of our population are non-metro and only 13 per cent now live in rural communities, yet this sector produces one third of our export wealth.

It is plainly obvious that a significant part of Australia's economic success rides on our strong agricultural sector, and while I hear many worry about food security in Australia, I am not so sure that this is cause for great concern. Simply, when we and the world want to pay enough for food, then we will produce more. That is not what happens in our marketing arrangements. In fact, the growers are pushed down to the bottom of the line. The hollowing out of the sector—often accompanied by a loss of dynamism within our communities—will ultimately hamper the sector's ability to respond to those demands and the great opportunities that will present themselves in a world population approaching nine billion—that is going to be one of the nation's biggest opportunities. The production of food is one of Australia's greatest strengths and opportunities, and it is worth noting that Australia has one of the lowest levels of government support for agriculture in the developed world. Subsidies are often hard to identify and come in various guises, including direct subsidies, tariffs, quotas and trade barriers disguised as something else. Our biggest agricultural competitor, the United States, pumps around $20 billion a year in direct subsidies into US agriculture, plus it imposes stringent import quotas to a range of products, including beef and sugar. The EU spends 57 billion euros a year on agriculture. In comparison, Australian agriculture has very little support notwithstanding the recent emergency exceptional circumstances arrangements during the drought. Traditionally, a modest amount of government support has come in the form of research subsidies, and it is easily argued that the net recipients of this important funding are the general public.

It is a great concern, however, that agricultural programs across the nation have been wound back. Over the last five years the federal government has abolished CSIRO Land and Water, and has cut tens of millions from agricultural research, including from the Rural Industries Research and Development Corporation. At the same time, collectively, those opposite make grand announcements about feel-good targets of greatly increased production and profitability in a sector with absolutely no plan of consequence or any idea how to achieve these targets. The states are no better. The state plan in South Australia calls for an increase of $20 billion by 2020 with no plan to get there. Time expired.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My interest in rural communities is in my electorate of Bass, and the fantastic work that is being done, largely by the Australian government in irrigation schemes, is making and will make a significant difference to the producers in my electorate. I have been at, and participated in, the recent opening of the Winnaleah Irrigation Augmentation Scheme and the Headquarters Road Dam Irrigation Scheme in my electorate.

I have some reservations about the rural communities, and I know that it comes down to education because I have spoken to several farmers about the proposed approval by the Tasmanian government to import poppy straw to one of the poppy processors in Tasmania that looks like getting up. I have spoken at these irrigation schemes about farmers diversifying. In that north-east area of Tasmania they largely produce milk. It has fantastic soils for growing grass, but if we are going to put irrigation schemes in they need to multiply the value of that land. I said to them that it would be really good if you could diversify and do a bit more poppy growing—and I know some do, and they do a fantastic job—but I spoke to one farmer from Scottsdale and he said to me: 'I'm sort of 63, 64. I don't really know that I want to go into poppies. I'd rather just run beef cattle, have a fairly easy life and work my way into retirement.' This is a problem in our rural communities. We have an ageing workforce, and it would be fantastic if we could be really innovative, and get into those new crops. And what a place Tasmania is for those innovations.

One of our local producers in Scottsdale is doing a fantastic job producing rhubarb for Australia—fantastic. One of the innovations coming out of that rhubarb crop that they are producing in Tasmania is a thing called 'Rhu Bru'. What they are doing is taking the waste from the rhubarb and making a fantastic drink, and if you have not had one of these refreshing drinks, then you should get Rhu Bru, produced in Scottsdale. It is fantastic. It is one of the most refreshing drinks you could ever hope to get.

An honourable member: I am not sure it will replace orange juice.

This is an innovation—I think Rhu Bru is better than orange juice and I am quite happy to bring some bottles of Rhu Bru up here to deliver to every member of parliament because it is just such a fantastic, refreshing drink. Rhu Bru is one of the innovations—this is where we need to be in Tasmania with these great irrigation schemes that we are putting in. We also need to maintain our great production of dairy products in our area. It is a pity that we have not got any processors in North-east Tasmania; we send most of our product to the north-west coast and that is produced into various cheeses and all sorts of wonderful dairy products coming out of Tasmania—fantastic. We have to look after the member for Braddon because that is his electorate. The federal government has been a great supporter of those producers both in the Smithton area and in Burnie—fantastic support that the government has given for those dairy products many of which are produced in the north-east.

I really wanted to talk about the Tasmanian exports and the difficulty we have had with the Victorian government imposing a $75 million penalty on Tasmania—it is a real tragedy that the Victorian government is putting that tax on Tasmanian exporters. Exports from Tasmania now probably cost about $3½ thousand per container to get out of Tasmania, whereas once it was about $1,300. This has made a tremendous difference to our rural producers, and we do need to find a solution for Tasmania's export freight industry. We do need to find a long-term, viable solution. All I can say is: food and wine in Tasmania has the most sensational potential of anywhere in Australia, and if you have not tried Tasmanian wines and Tasmanian cheeses, you have really missed out. And I promise to bring every member of parliament a Rhu Bru. (Time expired)

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

The electorate of Flynn does carry a lot of rural products, farmers and people trying to make money off the land. I would not say that dairy farmers are a dying race, but there are a lot of dairy farmers dropping out of the industry. The thing with Australian dairy farmers is that we know Victoria produces the most milk and we produce about nine billion litres of milk a year, with four billion used locally for Australian consumption and the rest being exported overseas. This is the problem dairy farmers have in my area, as with dairy farmers in New South Wales. In my electorate, there are only 29 dairy farmers left, and they produce about a million litres of milk per year per farmer. That milk is processed in the Port Curtis Dairy Co-op in Rockhampton. There is going to come a point in time when that 29 million litres of milk is no longer viable to go through that PCD plant. So what happens then to those 29 farmers? They are currently having their contracts drawn up again. They have been getting about 60c a litre for the primary milk and about 16c for the class 2 milk. This is hardly making it viable, and with the new contracts they face through their processors, Parmalat and so forth, they do not think the industry will be viable for a very long time. Two have closed down in the last two weeks.

When I come to citrus farmers, we have the biggest mandarin citrus farm in the Southern Hemisphere at Emerald; it is called the 2PH farms. These guys are struggling because of the high Australian dollar. All their mandarins are exported to Europe, America and South America. They produce a lot of mandarins and they could not survive without hiring the South Pacific labourers from places like Samoa and Fiji. This scheme is very good for them because in Emerald, which is strong in mining and other agricultural areas, they cannot get workers for their citrus farms. So they employ these South Pacific islanders who do a very good job and who are very good community people. They come in, they are allowed seven months to stop and work on the citrus farms and then go back to their homeland. With the citrus farms come big cold rooms and big chillers and they have been hit by the carbon tax, which is making them buckle at the knees. I will be fighting for those farmers. The dairy farmers also suffer from this high carbon tax levy. Wheat farmers are getting about $320 or $280 a tonne; it fluctuates. When I was at Emerald in 1980 they were getting $200 a tonne then, so the wheat price has not gone up a lot but their overhead costs have gone up alarmingly since 1980. The price of machinery has gone up and everything has gone up. For farmers generally their product prices have not gone up.

The beef producers have got much better, as have all our Australian rural producers. They have had to get better or they do not survive. We have ginger farmers in Bundaberg who are going along okay but face the threat of imported ginger from Fiji. As we know, ginger in Fiji has a disease, so we have to be careful with our biosecurity. The product has got to be properly quarantined because one thing we do not want is to have this disease sweep through our ginger farms at Bundaberg. There are macadamia nuts. The wine producing areas of Central Queensland are not big but they still produce wine. Cotton is a very expensive crop to grow but offers good returns if everything goes okay. In the 2008 floods and the 2010 floods in Flynn all the cotton farms were wiped out and it was heartbreaking to see the cotton modules underwater and sucking it up like a big sponge.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I thank the chamber for its cooperation in allowing me to speak at this time. It was a very early start getting here from rural Victoria this morning. I appreciate it and thank the chamber for being lenient in that regard. I start by congratulating Nola Marino, the member for Forrest, for this wonderful motion. It is a fantastic motion and one that all members of this House should take particular note of. Our rural producers are hurting. From what we have heard today, I think it is true right across the country, whether it be from the member for Forrest's electorate in Western Australia, whether it be from New South Wales, whether it be from Queensland or whether it be from the Northern Territory or the Deputy Speaker's own home state of Tasmania. All the feedback and information I am getting at the moment is that it is very hard for our farmers to make a living.

There are three issues on which I think we as federal parliamentarians can make immediate steps to address the problem. This should go to the heart of this motion by the member for Forrest. The first issue is that we have to put downward pressure on interest rates so that we put downward pressure on the dollar. What is the best way we can do that? We have had the four biggest budget deficits in Australia's history in the last four years. We have to get our budget under control because if we get our budget under control it means the Reserve Bank can bring interest rates down so that internationally they are comparable and we will not see money coming into this country and keeping the dollar as high as it is. We have to put downward pressure on the dollar, and as federal parliamentarians what is the best way we can do it? The best way is to end wasteful Wayne's reckless spending. That is the first thing we have to do. The second thing we have to do is get rid of the carbon tax. Whether we like it or not, it has to go to help our farmers. I will give you a couple of examples. In the dairy industry this year alone, on the government's own modelling, each dairy farmer will have a minimum of a $5,000 hit to their bottom line. If you talk to the dairy farmers in my electorate—some of which are larger producers—you are looking at that being $10,000, $15,000 or $20,000 in some instances. In the south-west community, if you take $5,000 income from every dairy farmer, you are taking it off the towns and communities in the electorate as well. We are starting to see it.

The service businesses to our agricultural sector are hurting because the extra money that farmers would spend in local communities is not occurring. When did that start? It happened post-30 June, with the implementation of the carbon tax. Talk to the Murray-Goulburn or talk to Fonterra. The direct hit from the carbon tax on them is bigger. What has happened to their international competitors? They are not being hit by it. We have two issues to start with.

The third issue that we need to address is access to overseas markets. We have to make sure that our farmers can sell their produce and that they can sell it as efficiently and effectively as possible. We have to double our efforts to bring down the tariffs, bring down the duties and bring down the trade barriers behind the border which impact on our agricultural exports. They are the three areas where we as federal parliamentarians can make an immediate impact to help our local farmers.

The message of this excellent motion by the member for Forrest is that farmers are hurting. Our regional and rural communities are suffering. We need to take action and there are three quick ways we can do that. Let's hope that the government is listening and has heard the message of this motion: get rid of the carbon tax, drive the dollar down through stopping the reckless spending, and get us increased access to overseas markets.

Debate adjourned.