Mr ANDERSON (Primary Industries and Energy) (9:31 AM) —I move:

That the bill be now read a second time.

The purpose of this bill is to make a number of amendments to the Rural Adjustment Act 1992 to allow the introduction of the farm business improvement program, known as Farmbis.

The government announced its intention to wind up the rural adjustment scheme in the 1997-98 budget, following the findings of the McColl report, titled Rural adjustment—managing change. The McColl committee found that RAS had reached a relatively small proportion of farmers with the exception of education and training support, its effectiveness was questionable.

It also found that overall, the scheme had not had a significant positive impact on the adjustment process and had not met the goal of fostering the development of a profitable and competitive farm sector.

The McColl committee recommended that future government programs to address rural adjustment should no longer use interest rate subsidies or grants to farm businesses for productivity improvement.

It recommended that the government introduce new programs that offered assistance in four key areas—farmer savings, welfare, re-establishment and management skills. The coalition government has delivered already on three of these areas—savings through the farm management deposit scheme, and welfare and re-establishment under the farm family restart scheme.

In relation to the fourth area, the McColl committee recommended a new program be introduced with a focus on promoting a culture of continuous learning and enhancing the capacity of farm managers to identify, acquire and apply the skills and information needed to improve the performance of their farm businesses both in terms of profitability and sustainability.

Having considered the recommendations of the McColl committee's report, the government decided to create the new Farmbis program. It is, of course, one part of the comprehensive Agriculture—Advancing Australia package unveiled by the government in September last year.

The four key objectives of the AAA package are:

. to help individual farm businesses profit from change;

. to ensure the farm sector has access to an adequate welfare safety net;

. to provide positive incentives for continual farm adjustment; and

. to encourage social and economic development in rural areas.

As is well known, Australian agriculture accounts for around 25 per cent of the nation's exports and provides the basis for much of its value-adding food and fibre processing industries. Australia has extensive arable land, a diverse climate suited to a wide range of agricultural and horticultural pursuits, and a high level of expertise in food and fibre production. As a result, this nation is very well placed to take advantage of market opportunities as they emerge domestically and overseas.

The goal of Farmbis is to help individual farm businesses take full advantage of these opportunities by building on their existing business management skills.

Farmbis is a program that will encourage the ongoing development of the farm sector's culture of continuous improvement—a culture that is best evidenced by the significant annual productivity improvements achieved by our farmers over many decades. Our farmers out-rank most other—virtually all in fact—industry sectors in this regard.

This new program will help farmers to take up the training and advice they consider they need in order to improve the productivity, profitability and sustainability of their businesses.

Recent reviews have shown strong links between upgrading skills and the influence it has on levels of productivity, profitability and innovation. For instance, research conducted by the National Farmers Federation has confirmed that a greater investment in training will enable farmers to capture the benefits and better place farmers to maximise the opportunities arising from the changing environment in which they operate.

The farming community itself has identified a need to build upon its existing culture of skills development and to increase participation by farmers in targeted learning activities. There is also a self-identified need to build on the overall business capabilities of farmers so that they can compete effectively in domestic and international markets. Farmbis will assist farmers attain a broad spectrum of business management skills including those for technical, financial, marketing and human resource management in order to meet thechallenges of the future. The objectives of Farmbis are threefold:

. firstly, to increase farmer participation in learning activities which will enhance the profitability, sustainability and competitiveness of their business;

. secondly, to develop greater acceptance of the benefits of continuous learning and skills development, and its relevance to the changing management needs of a competitive farm sector; and

. finally, to enhance farmers' capacity to identify and access appropriate learning activities, and over time, influence more flexible delivery of such activities.

Farmbis will give farmers an opportunity to identify, access and participate in the skills development activities most relevant to enhancing the performance of their businesses. This approach is consistent with rural industries moving to greater financial self- reliance and control of their own future competitiveness. It is not prescriptive.

Very importantly, it will build on the excellent training that is being delivered around the nation by the property management planning campaign—a joint Commonwealth-state initiative that introduces farmers to strategic business planning at the whole farm level and is delivered through farmer workshops. PMP is an excellent program and I commend it to all farmers.

Farmbis will achieve its objectives through a range of strategies:

. by assisting farmers to participate in learning activities;

. by coordinating flexible, responsive delivery of learning activities to farmers;

. by communicating to farmers the benefits of continuous learning;

. by contributing to farmers establishing a planned approach to their learning needs;

. by contributing to a more integrated rural training delivery framework; and

. by improving farmers' access to information on learning activities; and

Farmbis will operate through partnerships with local farmer groups, industry organisations, community groups, state agencies and service providers. It will use existing networks to facilitate participation in learning activities driven by farmer and industry needs. Farmbis will not of itself be a service provider.

The focus of Farmbis will be on short- and medium-term contributions to farm sector training and development activities. It is expected that, over time, some activities under Farmbis will be linked to industry competency standards to facilitate cross-industry credit transfer. Farmbis will consist of two components, a national component and a state based component. The Commonwealth will administer the national component.

It is anticipated that the majority of Farmbis funds will be allocated through the state based component to fund state, industry and community agreed priorities in relation to training and education within their regional communities and the rural sector. A partnership agree ment between the Commonwealth and each state will set out the requirements for program objectives, performance, monitoring, funding and other obligations. Negotiations are currently under way in the development of these agreements.

Each state will be required to undertake a consultative planning process through the establishment of a state planning group to recommend priorities, target group strategies, delivery and funding arrangements consistent with the framework set out in the partnership agreement. The program administrator in each state will be responsible for managing the program consistent with the priorities determined by the state planning group and within the framework set out in the partnership agreement.

State planning groups may recommend the use of existing coordination arrangements or new program coordinators. Where program coordinators are employed, they will ensure that the learning priorities of individual farmers and/or groups of farmers can be effectively and efficiently matched with those providers who can best meet these needs. Program coordinators will act as organisers and brokers but will not themselves deliver learning activities.

Farmbis will partly contribute to the costs of farmers' participation in learning activities which address the skills development needs they have identified. Support may be on an individual or on a group basis such as to a group of producers identifying a common training requirement or a learning need. Learning needs can be established at the level of an individual farmer, farm family or group of farmers. Some ways of establishing learning needs include development of a farm business plan or conducting an individual skills audit. By taking a planned approach to learning and establishing their needs, farmers would maximise their return on participation time and the benefits accruing to their business. In determining the eligibility criteria, each state planning group will match their state's own priorities against those expressed by the farmers.

Training would be delivered on a competitive basis seeking the best value for money, best available provider, public or private, and promoting, over time, best practice. Participants would be expected to contribute to the cost of learning activities in which they participate under Farmbis because it is widely accepted that, where a contribution is made, there is greater commitment from participants. Consideration may also be given towards contributing to incidental costs such as travel for farmers in isolated areas. Farmbis will also provide reference tools and materials as a resource for farmers and interested persons to access information on available courses, other learning activities and providers' costs and contact numbers.

The principal target group for Farmbis will be the farm management team comprising principal operator, spouse, family members, partners, staff employed in a management capacity and farm contractors whose operational support is integral to improving business management on the farm. Participants should be bona fide farmers as defined by the respective state planning groups. Each state planning group will make recommendations regarding the eligibility criteria operating in that state.

Activities supported under Farmbis would focus on addressing the training needs identified by the management team including those related to financial, marketing and human resource management of the farm business. Specific types of activities that may be supported include farm business and financial planning and advice, farm performance benchmarking, leadership development, quality assurance activities, skills audits and specialised management areas such as risk management, although this is not an exhaustive list by any means of activities which could be funded under Farmbis. Other activities may also be supported if they meet the objectives of the program.

The allocation of funding under Farmbis between the Commonwealth and state for the state component is 50-50. Participants would be expected to contribute to the cost of individual Farmbis activities in which they participate, although the contribution to individual activities would be flexible and recommended by the state planning group. Additional funding for Farmbis activities from corporate sponsors and other bodies will be actively encouraged.

The Commonwealth is in the final stages of negotiations with each state and territory on how the Farmbis program will operate in each of those jurisdictions. Farmbis will operate for three years from the 1998-99 financial year. I commend the bill to honourable members and present the explanatory memorandum.

Debate (on motion by Mr O'Keefe) adjourned.