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Wednesday, 25 May 2005
Page: 164

Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (10:33 AM) —I thank the honourable member for Corio, who has indicated opposition support for this legislation, and particularly the honourable member for Riverina for her contribution to this debate. Indeed, I congratulate the honourable member on her well-argued and passionate defence of the rice industry. I very much share her annoyance at the article on the front page of the Australian newspaper today and the distortions that a study of this nature creates for a proper and sensible debate about the usefulness and importance of Australian agricultural industries.

For some time I have been expressing concern about the decline in urban sympathy for rural Australia, a lack of understanding of our rural industries and why they matter so much to our country. It is disappointing that a scientist from the CSIRO is joining this anti-farmer crusade. One would expect that the Australian newspaper will now give equal coverage to the defence of the rice industry, and to the speech today by the honourable member for Riverina, at the top of the very front page of the newspaper tomorrow to put some fair and reasonable balance into this debate. I guess it is a forlorn hope that the Australian newspaper might actually want to fairly cover an issue of this nature, but it is important that the facts be properly put before the Australian people.

Mr Danby —I seek to ask the Minister for Agriculture, Fisheries and Forestry a question.

The DEPUTY SPEAKER (Mr Wilkie)—Does the minister wish to receive a question?

Mr TRUSS —No, but go on.

The DEPUTY SPEAKER —I think that is a yes, member for Melbourne Ports.

Mr Danby —I thank the minister for his graciousness. I do not wish to appear anti-farmer, but can you tell me how many litres of water it does take to produce a kilogram of rice if the front page of the Australian is wrong.

Mr TRUSS —I was impressed by the statistics so instantly quoted by the member for Riverina. Another study has suggested that less than 60 litres of water is required to provide a rice serving for an average Australian meal. There is a vast difference between 60 litres per serving and 21,000 litres per kilogram. I think that demonstrates that the science is anything other than exact and that those sorts of issues need to be appropriately acknowledged when presenting opinions of the nature publicised so extensively in the Australian today. The honourable member is rightly picking on the Australian, because they put it on the front page but, as usual, the usual suspects, such as the ABC, have been quick to follow up on these sorts of issues and make similar comment.

The rice industry has made a significant contribution to Australia. It is important to note that, unlike the rice industries in most of the other parts of the world, the Australian rice industry pays full price for its water. If in fact rice were not an efficient and effective user of water, rice production would have ceased in Australia years ago; they would have gone onto something that delivered better returns for the purchase price of the water. Unlike other countries that generally give their water to the farmers for nothing, Australia has a cost-recovery system. So the rice industry, whilst it uses significant quantities of water, is able to do that in an efficient and effective way, and it does so in a way that competes with other industries that may perhaps use less water but are able to produce less as a result.

I think the record of the rice industry in their use of water is worthy of comment in relation to their savings programs. Few industries have done more to reduce the amount of water they are using. The research and development of their undertaking is likely, in due course, to develop varieties that will have a lower call on water. Indeed, the dream in which there will be no need to have paddy fields at all to produce rice may one day come to fruition. That is why legislation of this nature is of particular importance, because it underpins the progressive work that the industry have already done and ensures that they will have adequate resources to continue their research and development program. I think the rice industry are conscious of the fact that they are subject to more scrutiny than any other industry in relation to their water use, and I commend them on the public way in which they have responded. Their environmental credentials stand well in comparison with almost any other industry in Australia, and they deserve credit for their actions in that regard.

Turning back to this bill, which is about research and development, I think the comments made by the honourable member for Riverina certainly reflect the importance of research and development. The Australian government shares that view, and we have a strong record in encouraging sustainable rural industries through research and development investments under the matching funding program, which this government committed to at the last federal election.

The government is also mindful of the need to encourage rural industries to structure their R&D systems in a way that maximises the benefits of R&D investment to the levy-paying producers and the wider community. It is in this context that the government was happy to support the rice industry’s request to amend the legislation to allow for more flexible management of its R&D program to ensure the long-term viability and sustainability of both the program and the industry, which has used innovation to remain internationally competitive. The rice industry is currently facing financial pressures as a result of several years of drought having delivered record low water entitlements. Consequently, the resulting sharp reduction in rice production has meant that the flow of levy funds to the rice industry R&D program has decreased far in excess of what normal management strategies could have been designed to cope with.

In seeking to assist the rice industry to manage its R&D activities, the purpose of this bill is twofold. It will increase the maximum allowable rice R&D levy from $2 to $3 a tonne and it will replace the way the operative levy rate is enacted and move associated levy administration issues from ministerial declaration to regulations. This change will provide a greater level of accountability back to parliament than the current arrangements and brings the levy arrangements to the rice industry into line with arrangements for other agricultural sectors.

It should be noted that the bill will not actually change the rate applied to the collection of levies from the industry, which the legislation refers to as the ‘operative rate’. The industry will need to come back with a proposal to change the current operative rate under the new maximum cap that is consistent with the government’s levy principles and guidelines. Key to this is the need to demonstrate industry support for changes in the operative levy rate, and I understand that the rice industry is currently progressing this process. This measure is in addition to the government’s decision in April to grant full EC assistance to rice growers in the Murray Valley who have been impacted by the last three years of record low irrigation entitlements. This EC decision will provide assistance to eligible rice producers for a period of 24 months. To date, 155 rice producers have received prima facie assistance worth close to three-quarters of a million dollars.

This is the first time that an irrigation industry like rice has been successful in obtaining EC assistance and it demonstrates the government’s concern that the ongoing drought is impacting on a wide range of rural industries. It is also an illustration of the way in which the government has sought to reform the EC process over the years to make it more responsive to the needs of a wider range of industries. It is not just rice producers who are receiving EC for the first time under this government. We have never really delivered EC before to intensive agricultural industries. I do not think that it has ever gone to irrigators in industries like the dairy industry or horticulture. So we have worked to achieve reform. As I mentioned yesterday in question time, we have not got much cooperation from the states in achieving that reform and so we have acted unilaterally. I noted yesterday that a list of press releases I had put out over the years chronicling those reforms was ridiculed by the opposition, and I think that demonstrates that Labor in Canberra are no different from Labor in the states. They do not really have much concern for drought-stricken farmers and have not shown any willingness to respond to the emerging issues which inevitably occur when you have the worst drought in our nation’s history.

I trust that this bill, which enjoys the support of industry, will help industry to continue its record of innovation over the longer term. In conjunction with EC support, which will assist the rice industry through this period of drought, I trust that the industry can plan for the future confident in the knowledge that they have the support of the government in endeavouring to achieve their objectives. I commend the legislation to the committee.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.