Mr O'CONNOR (11:40 AM) —The opposition will not be opposing the Rural Adjustment Amendment Bill 1998 . This particular bill gives effect to the recommendations of the McColl report which suggested a refocusing of rural adjustment assistance in this country. It is part of the government's AAA package that was implemented for Australia's rural sector. There are aspects of that particular package that we in the opposition do not support, but this is a bill which has received broad support from us and the farming community across the length and breadth of this country.

The process of structural adjustment in the Australian economy is a process that has intensified over the last two decades. In my own electorate, for example, which is a manufacturing based electorate, we have had significant restructuring in key industries. Textile, clothing and footwear and automotive manufacturing were the two main areas where intensive industry restructuring took place and we have seen considerable job shedding in those particular industries. The processes that were at work in those industries as we refocused those industries to deal with the challenges of the global marketplace have been at work in Australia's rural sector, where over the past two decades we have seen quite monumental structural changes in the rural sector.

Mr Deputy Speaker Quick, I am sure you would appreciate this, given your history and acquaintance with the rural sector. When I cast my mind back to my own upbringing on a dairy farm in the Western District of Victoria, we milked the cows by hand. The milk went into cans and then the truck came to pick them up to take them to the factory. It was a fairly labour-intensive operation at that stage. Now you see dairy farms with upwards of 1,000, 2,000 and sometimes 3,000 head of cattle being milked and quite enormous gains in production. The application of technologies has seen modern dairy farms quite unrecognisable from the old dairy farms that were in existence as far as the new technologies are concerned.

Even the production of hay was a very labour-intensive operation. I can recall the days when we used to stook the hay as well as bale it and pitchfork it onto a truck and then put it in a stack. All of that was quite labour intensive and it provided significant employment for a rural work force who were not owners of capital or the land base. These were farm workers who worked in a variety of areas in the rural sector at the time, be it carting hay, be it relief milking, or be it bagging onions by hand. Even in the potato and onion area, one which I am more familiar with than others, the changed requirement for labour, the application of new technologies, and the advances in transport and packaging and handling, have transformed that industry. And that process of transformation is still fairly intense.

Of course, this puts significant demands on farmers who seek to make their living in the rural sector at the moment. Just sweeping with the broad brush here, we have seen the number of farmers decline, the number of farms decline, production increase substantially, and many of the industries refocusing their efforts in the export area.

But we have also seen an interesting structural adjustment on farm with the diversification of product that is produced on farms or in particular regions. I happened to take a drive a couple of weeks ago to my home area, which was basically a dairy farming area with some cropping—potatoes and onions mainly, but some hays, lucernes and various other crops. As I drove around it was interesting to see the subtle changes that have occurred in my own local area.

On the side of Red Rock we now have vines—there is quite a degree of planting of vines in the area now. There are several small businesses growing flowers quite intensively and making a very good living out of that, and I saw a deer farm where before there had been a dairy farm. Observing the dairy farms that exist there, I cast my mind back to the time when the herds were 30 to 40 head of cattle. Now, the average is around 200 to 300, but some are 1000-head dairies. So there has been significant on-farm adjustment and there has been a reorientation of the rural sector to the export task.

What we have here is a piece of legislation which will be of assistance to farmers as they cope with those adjustments to the new realities of their market environment. I note the objectives of the legislation are to improve on-farm productivity and to improve the management skills of farmers. This is very important. If we look at an industry like the wool industry that is going through a period of quite significant turmoil at the moment, its rate of on-farm productivity improvement is well below that of mixed farms and dedicated cropping farms. The disparities in the annual increases in productivity are quite staggering when you consider some wool properties compared with, say, cropping properties.

There is a real need to educate farmers and retrain farmers in new techniques of production and in other dimensions of their business so that they can become more productive and survive in the very challenging and changing environment that they find themselves in. There is considerable debate in the rural community about the future of the family farm. We know that the family farm at the moment really depends not only on the production on farm but on the capacity of members of the farm to earn off-farm income. This issue of productivity is going to be central to the survival of those family farms in the new millennium.

I note the other objective of the legislation is to improve the management skills of farmers. I am not sure how to put this, Mr Deputy Speaker, but perhaps I can say the `Achilles heel' of the agricultural sector is the resistance to change that has been apparent over the past decades in some sectors. I know there are some very progressive sectors in agriculture today, but certainly in some areas there has been a reluctance on the part of many farmers to take on new technologies, to seek out training, to explore knowledge about their own markets. I guess the problem that many rural industries have had has been changing the culture of production and getting farmers into the broader race to improve skills and to cope with the challenges of their market environment.

Having read through the minister's second reading speech, I would like to canvass some of the activities that will be supported by the legislation. I refer to skill development, farm planning, financial planning, quality assurance matters, performance benchmarking, risk management, marketing and natural resource management. These are part of a lexicon of today's production environment that, I guess, was not there 20 years ago. If you went up to a farmer and said, `We need to give you some skills to benchmark your performance against others,' he would say, `I do that. I take a drive around the district and have a look at other farmers' onions and I have a look at mine.' There was, perhaps, no science in the way which producers benchmarked their performances against others in the industry—and, indeed, others in the world.

Similarly, if you go through any of these terms that describe the activities that are going to be supported by this legislation, farmers would have approached these issues in a very instinctive way in the past, but not, perhaps, in the most rational or scientific way to their own benefit. So that range of activities that has been described really says it all as far as refocusing the Rural Adjustment Scheme, or rural adjustment for the agricultural sector of this economy, is concerned, and I think that it is a worthwhile refocusing at this stage.

I might sound a note of warning here. This is not to pour any cold water on the objectives of the government or the activities that are going to be supported in this legislation, but I think there is a very clear emphasis here on education and training. I would support that, but I think there needs to be some care taken in the way these training programs hit the ground for the benefit of farmers. We certainly do not want training for training's sake, or a plethora of training programs that supposedly focus on improving individual skills of farmers but, in fact, dilute the training effort and do not maintain the sort of focus that is required.

I think that focus can be maintained with proper structures and providers being funded and, of course, a review process of substance put in place to ensure that proper education and training are being delivered. There has been some concern expressed, for example, by Mr Clay Manners of the Victorian Farmers Federation. He had this to say:

. . . farmers will be very sceptical about education and training being seen as the panacea.

I do not think that farmers would see education and training as being a panacea; the problems that are facing the rural sector are broader than that. But the key to the survival of Australia's farm sector in the new millennium is certainly going to be based very much on the capacity of producers to respond to their marketplace and to produce products for that marketplace. Of course, the acquisition of knowledge about that marketplace, and the tools and incentive to obtain that knowledge, will come from a culture where education and training are respected and seen as worth while, and are encouraged by government.

So as far as the opposition is concerned, we will be supporting the legislation that has been put before us here. I think it is interesting to note that the effectiveness and strength of this particular program, FarmBis, and the $50 million that is being allocated—which is not an insignificant amount of money—will lie in the partnerships that will be constructed and developed, in an ongoing sense, to deliver the programs and to support the activities that I have just described.

It is very important that the training infrastructure in rural and regional areas is sustained and developed for the benefit of those who choose to live in those regions. Of course, the funding that is made available in this program, in cooperation with state governments and other institutions, will ensure that that training infrastructure stays in place and is used effectively for the benefit of the rural sector.

We support the general thrust of this Rural Adjustment Amendment Bill 1998 . We are from the opposition and we are here to help you! This is one dimension of the AAA package—a small part of that package that we do support.