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Wednesday, 4 June 2008
Page: 4394


Mr GRAY (Parliamentary Secretary for Regional Development and Northern Australia) (9:46 AM) —I rise to speak today in support of the Wheat Export Marketing Bill 2008, not just as a government member for the seat which contains the Kwinana export terminal but also as a member, albeit by marriage, of an extended wheat-farming family from Western Australia. To pick up some of the points made by the member for New England, it is clear from discussions I have had in my family that there is a generational difference between views on this proposal. The younger the farmer—such as my brother-in-law Rod Birch—the more vocal the support for this legislation, the more thoughtful his consideration and support for this legislation. The older the farmer, I find less confidence. The older the farmer, I accept that there is nervousness about these proposals. Having said that, when I speak of my family, of course it is extremely extended and the member for O’Connor is part of that family, too. His support for this bill is unique among that generation. My father-in-law, Peter Walsh, who spent many years on his tractor up at Doodlakine, tends to take the view that anything that happened in the world since the ABC went from black-and-white to colour is not to be trusted.

As a Western Australian, I am aware of the significance of this bill to the sustainability and future of the Western Australia wheat belt. This bill will introduce competition into the bulk wheat market export industry. It will support farming communities and farming families. We hear lots in this place about working families and there are farming families, too.

WA has a strong history of agricultural achievement in challenging conditions. Colonists arrived in WA in 1829 and planted grain they brought from England. Colonial farmers recorded their first wheat harvest in WA in 1831. Of course the grain had been developed in English conditions and frequently failed to provide reliable and substantial crops. The failure of these first crops was inevitable. In isolated areas such as the Victoria District at Champion Bay near what we now call Geraldton, it was even known that starvation deaths followed crop failure. I quote from Sister Mary Albertus Bain:

By the end of 1873 it could correctly be claimed that there had only been one good season since 1867. The most promising harvest since that date had that year been attacked again by red rust and almost the entire crop in the district was a failure ...

Malnutrition, worry and heat gradually took its toll in the district. The greatest number of deaths from 1870 to 1894 was amongst the children and the most common cause was ‘marasmus’—inability to thrive due to a protein deficiency—

Such was the skill of successive generations of farmers in the Western Australia grain belt that, from failed first crops and starvation, the industry we have today has progressed to a sophisticated, science based, satellite guided, machine driven export industry. The realisation that cheap and efficient bulk-handling systems could reduce handling costs, made effective through the establishment of Co-operative Bulk Handling, known by its acronym as CBH. In 1933, CBH was registered by the wheat pool of WA and divided into 100,000 shares of £1 each. This effectively created the co-operative bulk handling system for grain growers.

From the 1920s to the 1960s, there was significant improvement in Western Australian grain yields through the use of superphosphate fertiliser and identification and amelioration of trace element deficiencies such as zinc, copper and manganese. Science and increasing efficiencies combined with good harvests have seen the grain industry propel itself into the 21st century.

Western Australian agriculture prides itself on being science based. The Western Australian wheat belt not only supports WA’s food needs but also creates an exportable surplus representing 90 per cent of its total grain production. Today, Western Australian grain is now exported to over 20 countries, with major shipments to Japan, South Korea, Indonesia, Iran, Pakistan and China. In WA, as we speak, seeding is still underway with many farmers having a poor start to the season and there is growing concern that this may not be a good year, despite good prices. The rains have not yet arrived.

Farming has few certainties but one thing is for sure: farmers deserve to know how they will market their crop before they put it in and, understandably, want some certainty in what the marketing rules will be before the next harvest. After 30 June this year, if this parliament does not change the current rules, the ministerial veto will disappear and the single desk that the National Party want to keep will vanish under the current law. The law as it stands leaves us with the worst of all worlds and no-one wants that to happen, not even the AWB. We need to create certainty. In the Productivity Commission’s submission to the National Competition Policy review of the Wheat Marketing Act 1989, it was the commission’s view that:

It is unlikely that the current wheat export marketing monopoly generates net benefits for Australia or, indeed, wheat producers themselves. The fundamental reasons for this assessment are that:

  • the current lack of choice for wheat growers is likely to be impairing efficiency and innovation within the industry, and—

The industry in Western Australia prides itself on its efficiency and innovation—

  • most if not all of the potential benefits of the AWB’s single desk could be achieved under competitive selling arrangements.

This bill will remove the fundamental problem with the current arrangements that have created a restriction on participation in the export wheat market and, subsequently, a lack of competition. The Rudd government is committed to addressing the problems associated with export wheat marketing arrangements. Farmers are used to dealing with uncertainty—whether it is their machinery, the supply chain, the weather or varying prices. This government acknowledges that the new arrangements contained in this bill, while market oriented, while providing a new start for wheat marketing after Iraq, will include an element of uncertainty as farmers learn to adapt to life in a competitive selling market.

Of course, farmers already survive in a moving market with a range of market costs and pressures such as labour costs and availability, fertiliser costs that are heavily dependent on the price of fossil fuels and ammonia, diesel costs and exchange rate variability. These often volatile forces make it difficult but necessary to sell in an open market, just as farm inputs are at prices set in open markets. I acknowledge that risks and uncertainties are inherent in surviving in the global marketplace. The government is committed to ensuring support, where possible, is provided to farmers, especially in the transition period. That is why the government has announced new funding of almost $10 million over three years to assist with the transition to the new arrangements, including funding for information sessions for growers and customers, collection and publication of marketing data, seed funding for Wheat Exports Australia, technical market support grants for new exporters and assistance to the National Agricultural Commodities Marketing Association to develop an industry code of conduct.

This bill delivers on the government’s election commitment to give growers more certainty, more choice, to minimise costs, to boost innovation and efficiency, and develop new export markets. These reforms effectively further deregulate the market and replace the single desk marketing arrangements that currently exist with the Australian Wheat Board. This bill has undergone extensive consultation processes, including the release of an exposure draft of the legislation, a Senate inquiry, the work of an independent expert group and private industry and grower briefings.

WA has come a long way since the days when early settlers suffered starvation at Champion Bay. Today, not only do we feed ourselves but we feed the rest of the world. Today it is Australia and Western Australian farmers who are champions. This bill will see the WA wheat belt continue to be a world leader in innovation and ensure that the industry can adapt to the changing global wheat market. I commend the bill to the House.