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Thursday, 24 June 2010
Page: 6629


Mr WINDSOR (4:42 PM) —When I was first running for the seat of New England, one of my people suggested that a good bumper sticker might be, ‘The Windsors have done a great job in Old England; give a Windsor a go in New England.’ It was decided not to proceed with that bumper sticker. I support the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. The trial that is being pursued in Western Australia is very significant. All of us, particularly those from country areas, should look closely at how this trial works. I have some concerns. I will not get into expressing too many of those today because I do not think that it pays to be negative when we are trying to assess a different way of looking at drought policy. It seems to me that both sides of parliament and, to a growing extent, the farm organisations are coming to recognise that the existing drought policy may not be the best way of addressing drought into the future. Particularly if climate change is a reality, there are going to be changed circumstances in some areas. So people are genuinely looking at various options in terms of drought policy.

I have been involved with the parliamentary committee that has been looking at some of these options and the potential impact of climate change on agriculture. Those who do not believe in climate change can substitute the word ‘drought’ and they will be able to make their own arrangements in terms of what sorts of policies should be occurring into the future. I think there are some significant things that do stand out, but before I get to those issues I would just like to reflect on the existing policy, which has been in place now for something like 18 years. I think it was the Keating government that put in place the arrangement where a drought that was greater than one in 25 years was deemed to require an exceptional circumstances response. Over time that has grown into what is called household support and also the EC interest rate subsidy assistance.

I have been in this parliament since 2001 and I have heard the previous government and the current government—I even heard it this morning from a country member of parliament—perpetuate a myth. I am not suggesting that the current system is correct, as we can always improve upon it, but a myth has developed in this parliament that somehow billions of dollars have been expended in country areas in relation to drought assistance. If you walked out into the street now people would say, ‘You cannot keep giving the farmers these vast amounts of money.’ The coalition did it brilliantly because they wanted to suggest that they were doing an enormous amount for the farm sector during the worst drought in living memory. The Labor Party did not do anything to fix the problem either. It seems to me that it has been in the interests of the major parties to paint the farm sector into a corner where it is seen to be in some sort of begging bowl arrangement, with the eventual goal of removing exceptional circumstances as a drought policy.

I would like to elaborate on that if I could. The exceptional circumstances arrangements are broken into two parts. The first part is household support, and the bill we are addressing today, the Farm Household Support Amendment (Ancillary Benefits) Bill 2010, is to do with the trial that is occurring in Western Australia. The household support is no different to Centrelink payments or unemployment benefits. The farmers who are getting that benefit are unemployed in the sense that they are not earning any income. They do not earn an income, but they are still working. They received the Centrelink payment because they needed to work to maintain the farm even though they were not earning any income. That is the same treatment that any unemployed person or any person who is not able to earn an income would receive.

The second part of the existing policy is the assistance to businesses through interest rate subsidy arrangements. There is a myth out there that this particular interest rate assistance has been propping up the broken-down farmer, that this has stopped a natural transition of people out of agriculture. There are viability requirements—the Minister for Agriculture, Fisheries and Forestry would be fully aware of them, and I thank him for being here—with exceptional circumstances interest rate assistance. If you are broke, you cannot get it. You have to show that during this exceptional circumstance you are viable enough that with some assistance you will tread water and, when the major event removes itself from the premises, you will be ready to produce again and be a productive contributor to the economy. I repeat: if you are a broken-down farmer, you cannot get assistance because the viability requirements disallow you from getting it. You might be able to get some household support, which any unemployed person who is not earning an income can avail themselves of.

The coalition perpetuated this myth—and I used to pick them up every time—that they were spending billions of dollars on propping up agriculture. That was the message and the farmers were all supposed to be out there saying, ‘Thank God you are here looking after us.’ When you look at the business assistance to agriculture over the first seven years of the drought—unfortunately I have left all my notes up in my office so I will operate on memory; I think you will find I am pretty close—the average assistance was $217 million a year. Two hundred and seventeen million dollars, in the worst drought in living memory, to one of the biggest contributors to our economy is a pittance, but this myth has developed that an enormous amount of money is being poured into agriculture and therefore we have got to look at different ways of doing it. I am not arguing about some of the other more positive things that the trial is looking at, but this myth annoys me because it puts the farming community in a position it should not be placed in. If you take it out to eight years, I think the average number went to about $250 million. If you bring in the last one or two years, the average over that period of time is about $280 million a year. The assistance that government gave to other industries during that period of time is somewhere between $11½ billion and $13 billion annually. There has been this mythology developed out there that you cannot help these people while they are going through one of the worst traumas from a climate event that we have ever seen, yet the money that has been presented out there is a pittance.

As I said, I agree with some of the changes. I agree with the trial. I think it is very worth while and we should look very closely at it. But I do not think we should use any financial argument to suggest that there are not circumstances where some direct assistance in terms of business assistance should be perpetuated. These are viable farmers who are becoming severely stretched. If you let them slip through the system, the productive activity that comes out the other end will be far less, and the investment of some money into the system to keep them ready to go, when eventually the drought breaks, would cost far less.

In my view, part of what the Minister for Agriculture, Fisheries and Forestry is trying to achieve—and I think it is a good idea—is to look at some of the ways in which we can pre-empt drought, remove drought. There is absolutely no doubt in my mind that, particularly with the better soil types, there are ways and means of doing that. The minister spent a few days in my electorate, where one of the things that we looked at very early in the piece was the advent of no-till farming. That has been an extraordinary adaptation to climate change that has taken place in recent years. I was fortunate enough to be interested in that sort of technology many years ago, and we have a block of land that is currently one of the longest blocks of land that has been no-till farmed continuously. That is coming up to 33 years. So I have some idea about what that actually does in terms of drought—the member for Parkes, who is at the table, would have a lot of knowledge of that too—and removing from the scenery the potential downside of weather events or dry spells, from climate change or whatever else. With the better soils, it produces the equivalent of another six inches of rainfall. That is due to a change in technology that has occurred over time. In a theoretical sense at least, with the advent of that technology you could effectively have a reduction of six inches of rain through climate change and break even in terms of the moisture available to plant with nothing else happening, so we have got to encourage that. There are such technologies in farming, and in grazing as well, that we should look very closely at and encourage.

There are various other landscape technologies that the minister is aware of. A man called Peter Andrews and others are looking at variations on the theme of how we keep more of the water in the landscape rather than letting it rush out to sea. There are some conflicts there, particularly with the Murray-Darling Basin Authority and the inter-valley caps and things that are being produced at the moment through the accountancy process that is going on in relation to water. If you were to encourage technologies that retain water on the land, reduce erosion and increase infiltration—all these very positive things to produce food or fibre—what would happen to the accountancy process in terms of the water that used to run off through bad management? I do not think they have really come to grips with that in some of their accounting processes. Take plantation forestry, for instance, which will have a significant impact on the availability of water downstream when you remove land that would have allowed run-off so you can plant on it trees that do not allow run-off.

So there are these conflicting policy areas that are starting to develop. Maybe that will put pressure on the irrigation water that is available, particularly in the Murray-Darling system. So I would suggest that, as part of this policy—and I am sure that it is in place—we should really look at encouraging the technologies that remove moisture loss as being a problem. We will never negate drought totally—nor should we try, as we are in a dry nation—but there are technologies to which funding could be provided to encourage the people involved. It might be through machinery, or it might be through the investment allowance that is out there at the moment, or it might be through reducing certain taxation of the various chemicals that are particularly good for various agricultural systems, or there might be management techniques that suffer from various taxation issues and government could play a role by removing those issues—so not giving money but removing increases in variable costs.

The other thing that I would like to do is to briefly note, Minister, while you are at the table in the chamber, that you are fully aware of the Bundarra area exceptional circumstances arrangement. It highlights some of the great difficulties with the existing system as to where the rain falls, the rain gauges, the rain events and the lines on maps. The people in Bundarra are looking for some answer as quickly as possible so that they can have some certainty as to where they are actually going, so I would encourage you to take that on board. It is a pocket of land in my electorate that unfortunately has been dealt a fairly bad hand in recent years, whereas other areas around it have been doing quite well. This area of little doughnuts is not doing very well at all in terms of rainfall.

Another issue I would like to raise is in conjunction with land use. We have developed this theme in Australian agriculture and in our parliaments that all land should be used for food production, that the world needs our food and that if we do not use that land for food production our own food security will slip. Anybody who is involved in agriculture realises that the world might need our food but it will not pay anything for it. Society has downgraded the value of food. Those who really need it have not got any money. Sudan is a classic case. Sudan has magnificent black soils. It has a dry land, like Australia’s, but it has the capacity with our technology to produce six times what Australia produces in grain. Moving into a carbon economy when there is the carting of grain all over the world to those who need the food, when in fact they could produce their own, inadvertently or deliberately corrupts some of the cost structures that have developed in relation to international trade.

When we talk about land use and carbon, we get this mixed message. I am not having a go at New South Wales farmers, but agriculture is all about food production. They are also talking about property rights. If I have the right to a thousand acres of land, why can’t I grow trees on it? Why can’t I grow second generation biofuels? That would have a more positive impact on the carbon economy, though it does not help the food economy. One of our great problems with drought policy—and this completes the circle in a sense—is that when the good years are on there is not enough money being made. We have to look at these technologies that are out there. There is this devotion to using all land for food production, but our problem is that we produce too much of the stuff. We have to find markets. We bribe Arabs occasionally to buy the stuff from us. Then we go down and buy a boatload of oil and so we have this carbon footprint coming across the ocean, whereas in a lot of ways we could use some of that food production land for agroforestry or biofuels—second generation ethanol or sugar for fuel. The sugar industry was nearly destroyed a few years ago, until the Brazilians decided to take enormous amounts of sugar off the world market and grow their own renewable energy instead. Suddenly our sugar producers were saved—not by our policy, but by the Brazilians saying, ‘We’re sick of this; we are not going to accept this global market; what else can we do?’ The world price went up, and our sugar producers were saved. There are enormous opportunities.

Today the shadow minister was talking about renewable energy targets—but nothing about agriculture, nothing about land use. It was all about solar, wind and waves. The coalition put in place some renewable energy targets back in 2001, but there is less renewable energy produced now than there was nine years ago, before they established the target. We have to get serious about this, and if we are serious about drought we will acknowledge that you can afford to grow a quarter of a tonne of wheat to the acre if you are getting paid big prices for it. It is payment for food that is the issue. We can fix it with technology, and I think this bill will go some way towards doing that. If people are not prepared to pay for our food products, we have to look at alternative land uses—whether it be trees or biofuels or whatever—to produce energy for us. We need energy. At the moment we ship our food overseas, cash the cheque, buy energy and bring it all the way back again. In a carbon economy that is going to be terribly detrimental to a country like Australia with its geographical location.

I encourage the minister to look at some of these issues and particularly to look very closely at the Bundarra issue. (Time expired)