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Thursday, 15 September 1983
Page: 874


Mr TUCKEY(11.14) —The Barley Research Levy Amendment Bill is about increasing levies for research into barley varieties and assisting the barley industry. I do not think there is a person in this Parliament who for a minute would object to the principle of additional research to improve the competitiveness and the productivity of the grain growing industries which are so significant in the economy of Australia. Of course, this type of approach to the funding of research in Australia is traditional. We have consistently imposed levies on growers, made a dollar for dollar government contribution and, consequently made these funds available with the assistance of a research council. But we find that, when we look more closely at the industry, although funds levied in this fashion are said to match government contributions, that is far from the case. I am not complaining about this matter but I think the taxpayer should know that it is probable that in the wheat industry alone the growers contribute less than 10 per cent of the public funding that is expended on wheat research. As I say, I do not object to that situation; it just happens to be a fact that when we make cash funds available for research they are generally expended directly on research. Of course, all the infrastructure that is necessary to conduct research, including the additional cost of the properties of the Commonwealth Scientific and Industrial Research Organisation and the universities, is funded under other votes in the Budget. I am advised that $40m is more like the level of expenditure that goes into research in the grain industry alone. That is compared, as I said, with probably $4m of direct contributions.

So we are looking at a large expenditure. I think it is reasonable that we ask ourselves whether the money is well spent. Currently, and because of the system that we are extending and entrenching today, research in Australia is almost entirely the preserve of the public sector. I do not say that that is wrong. Significant arguments can be brought forward for public sector involvement. Private sector involvement will naturally be more commercial. It can be argued that some of the more pure forms of research that are necessary in these areas are best done by people who do not have commercial restraints. Nevertheless, we will have almost a monopoly on research in Australia and, I might say, a monopoly which is jealously protected by the public sector.

The levy system that we are discussing today is basically one of putting the money up front. The farmer and the taxpayer pay first with no guarantee of results. They put up their money but is is a lottery; maybe they will get a good result, maybe they will not. Of course, if I might add a small point of politics , that seems to me to be what is happening with a lot of things in the operation of government at the moment-after sales service is something we have yet to see. I refer honourable members to the first difficulty of the system to which I refer honourable members which is based on a levy on production and the Government's matching of that levy. That reduced production, which could be caused by our inability to have the latest varieties through research, automatically means reduced research. A drought year, such as the one we have just had, results in a reduced production of barley. One of the reasons for this Bill to increase the levy per tonne is that we have produced fewer tonnes of barley. Consequently, we do not have enough money to conduct research by way of this system, and therefore suggest that the system is not necessarily good in that regard.

I think we should look further at what the system has achieved for Australia and Australian farmers. In 1975 Evenson and Kiesler in the United States conducted an excellent inquiry. They set out to measure the value of research where it counts by comparing it against production and productivity gains. I have to admit that the figures they produced over the previous 10 years go only to 1975, but my advice is that nothing much has changed. The researchers looked at figures in three significant areas: The production in tonnes per hectare; the percentage of productivity gains present, and the percentage of that country's research expenditure per unit of product value. In other words, if it is to be presumed that research will improve productivity then that measure is the most significant. It appears to me that, of those three figures, the two most significant are how much we spend and how much we get by means of productivity gain. Quite clearly the climate, land type, et cetera, could have significant influence on the actual production in tonnes per hectare, so that figure is not as interesting as the other two I have mentioned. In an established agricultural area productivity gains can be significantly measured by the amount of money spent on research.

Let us look at how different countries have performed in this regard. Canada has a productivity of 1.4 tonnes per hectare. Its productivity gain is 0.011 per cent, and its research expenditure per unit of product value is 1.28 per cent. If I can quickly throw some figures around, the United States of America has a productivity of 1.5 tonnes per hectare, a productivity gain of 0.027 per cent, and research expenditure of 0.81 per cent-significantly less than Canada. Spain, which has an agricultural climate very similar to our own, has a productivity of one tonne per hectare, which is comparable with 1.2 tonnes per hectare in Australia, and a productivity gain of 0.022 per cent, while Australia has a productivity gain of 0.001 per cent. Spain's expenditure per unit of product value is 0.23 per cent while Australia's expenditure per unit of product value is a whopping 2.11 per cent. I might add that figures for Australia exceed those for every other country on my list. For Italy the figures are productivity 1.8 tonnes per hectare, productivity gain 0.823 per cent, and 0.4 per cent expenditure for each unit of product value. In every case, only Australia got up over two per cent. Canada's figure was 1.23 per cent and that for the United States was the next highest at 0.81 per cent. They were all under one per cent of their expenditure per unit of product value, all of them nevertheless gaining substantially more than Australia for each dollar spent. So it is pretty clear that some questions have to be asked about how we are doing the job. On an international comparison it could clearly be said that Australia's performance is not very good. In fact it could almost be said that, contrary to all the good words of the entrenched monopoly, the system is a failure. Even with that huge contribution of $40m in that area we certainly are not producing the goods for the taxpayer.

Wheatgrowers, whilst accepting this up front system of pay now and hope, claim that it is time the system reflected a more competitive view. They complain that these barley and wheat research councils should not have any contribution from the people who receive the money, the researchers. They have said to me that it is time that the people who pay the money, namely, the farmers and the taxpayers , the people who consume the research-in this case I guess it is the farmer- should be the ones to decide. They do not need significant pressures from the people who want to spend the money. They should be at arm's length; they should go to the councils with their proposals. Applications should be called, submissions should be received, and their performance measured and monitored constantly against the activities of others in this field. At least then people would be seen to be competing to produce the goods. People in my electorate constantly complain about how long it has been since they have seen new wheat varieties of a significant nature. There are adjustments at the margin; mostly they are getting the same types of grains with slightly new names.

There are problems in the system. Whilst it has become traditional to fund research by this upfront arrangement the wheat industry and others concerned would go no further than to say: 'For goodness sake, let us have a situation where at least these public sector people who do this research are competing with themselves'. Ideally in that arrangement, if some private institute wanted to get into the business of breeding and researching cereal grains, and barley in this case-they should be able to come to these wheat and barley research type councils and say: 'Here is our proposal. This is what we think we can do with this. If you will guarantee us grants over five years we will deliver you some goods'. This, of course, is happening in other countries. It is significant that some of the countries I mentioned earlier which have vastly better research performances than Australia, have a substantial private enterprise component. If we stick with this upfront type of funding, that is the way we should do it.

Nevertheless, their is an alternative that has been considered by this Parliament at length; that is, where we do not have upfront funding but pay for results. That is the situation where a royalty is paid to an inventor who has created the goods, who has put his money upfront, has gone down the very risky track of invention or research, and has said: 'Here is a superior product. I wish to get a small financial return for doing it'. We need in Australia a system which is now common in many countries of the world, such as Argentina, Austria, Belgium, Czechoslovakia, Denmark, France, Hungary, Israel, Italy, Japan , the Netherlands, our neighbour New Zealand, Poland, Romania, Russia-some nice left wing style countries-South Africa-a nice right wing style country-Spain, Sweden, Switzerland, the United Kingdom, the United States of America and West Germany. The United States of America and West Germany are two of the international leaders in both the commercial and agricultural fields.

All those countries have already decided on the necessity to give the incentive to the private sector to research, in particular, the agricultural, and plant variety areas. This Government has come to the conclusion that we can no longer gain the benefits of private enterprise in the countries I have just mentioned. Quite sensibly, those countries will not send to us, a country that gives their inventors no protection, all their magnificent inventions. Barley research has been so significant in the United Kingdom in recent times that, I believe, no barley being used today was in existence six years ago. Productivity has increased by massive amounts.

The plant variety rights legislation was responsibly introduced in this country because we thought, as a Government, that there was good reason to introduce it, not as a replacement for private sector research but as an extension of the total research situation. We all know how plants grow. We all know that, without protection, the private sector cannot possibly invest in plant research when it knows that the end product, the wonderful things that it brings to humanity, can be taken by any individual and put in the ground the next day. That person is thereby going into the same business for nothing. Ten or 15 years of research, with the huge costs involved have been for the benefit of someone else. By the way, this is a significant criticism of our present system.

Today, if a barley grower has not contributed to the research of the previous 20 years all the payments that have been made and all the efforts of those people have been for nothing. I am not saying that we should change that. I would dearly love to see the public sector hang in there. I presume that in time , as in other countries that have plant variety rights, our people will benefit from royalties. The user pays concept could be extended to such a point that hopefully, the taxpayer could back away from this area of public research. If the message that the public researchers are giving us of their great ability is true, then they too would attract significant royalties in the future.

I ask the Government to reconsider the plant variety rights legislation. The history of the legislation is that when it was introduced it was known to be sensitive and a major lobby arose against it. What happened? Our Government, which introduced it, put it on the table for six months. At that time the wheat industry and the grain industry said: 'We do not want a bar of it'. They had been caught up in the criticism. But while it lay on the table some of their members went off and found out about the gains that their international neighbours were getting. They came scurrying back and at their request and demand, when the Bill came back into this House six months later, it included a provision to cover the grains industry. This was because the industry representatives wanted it. They had measured the success. My constituents were also deeply concerned with all the furphies that floated about.

What happened to the Bill? It went to the Senate and the Australian Democrats had to satisfy their greenies. Being fairly politically aware people, they knew that the people who generate income for Australia wanted the legislation. They had excellent reasons for that view. I have since corresponded with the Democrats on behalf of the berry industry which tells us that we are finished in Australia. We are so far behind in the invention business and our productivity on the ground is so low that there is no way we can compete. What did the Democrats do? They were not game to throw the legislation out; they had to satisfy the greenies. So they referred it to a committee and there it stuck. They completely ignored the legislation in the previous six months when they could have been doing that sort of thing. They waited until the legislation got to the Senate. They did not know how to handle it. Then an election came along and saved them having to make any decision at all, which is something they are always very happy about. The situation is that we have not got any legislation. We are going to go further and further down the track of hitting the producer and the taxpayer for a system that patently is not making the grade. Without major change it is not going to make the grade. I hope enough courage will be shown.

I am aware that the Minister for Primary Industry (Mr Kerin) has said: 'Why should I bother with plant variety rights? Not one Labor Party branch in Australia has written to me supporting it'. That is a really good reason, is it not? The country's agriculture is suffering. Our agricultural industries can no longer benefit from the ever increasing list of countries that have introduced plant variety rights. We cannot get their products. I have heard all sorts of arguments that we can. We can let them use trade names, et cetera. That might be our view, but it is not theirs. They are the people who have the high producing items. The new products-new barleys and everything else-are locked up in England and in other countries. We cannot get these items and develop them to the stage where they can be of some value in Australia. These people say: 'Not on your nelly. We have spent the money. If you, your politicians and your greenies are too silly to see that you can grow a lot more on the same acre of ground, that is your fault. We are not going to worry about you. You don't vote for us'. Those people are quite right in saying that to us fools.

Finally, one of the big arguments about this has been that the multinationals will lock up the seeds industry. The first thing to say in this regard about the legislation was that there was a cut off point. Anything that was produced prior to the date was free to everyone evermore. If someone comes to a farmer and says : 'Here are two seeds. This one will produce half as much as that one but it will cost you four times as much because I am a greedy multinational', what will the farmer tell him? Farmers are not that dumb. The farmer will say: 'Keep your seed. I will stick with the old variety! It is only when the profitability is such-


Mr Humphreys —He is saying the farmers are dumb.


Mr TUCKEY —That interjection can be put in Hansard. I can make a lot of it in my electorate. The fact is that the commercial aspects will dictate. It is impossible for the multinationals to achieve that purpose.


Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! The honourable member's time has expired!