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Monday, 26 November 2012
Page: 13293


Mr RAMSEY (Grey) (12:11): I would like to take the opportunity today to try to show why the agricultural sector is still such an important part of the Australian economy; the huge contribution rural Australia makes to our wealth; and yet, despite incredible productivity increases, the difficulties that many farmers and farming communities find themselves in. We are used to hearing the debates concerning our nation's productivity and, when discussing our agricultural output, a number of different figures are used. For instance, should we consider the productivity per hectare, per hectare sown, or per capita? Whichever it is, agriculture is impressive, but most particularly so on a per capita basis.

I will take the wheat industry, for example. In 1920, 2.6 million hectares were sown and 1.2 million tonnes were harvested. In 1950, it was 4.9 million hectares sown for 5.9 million tonnes harvested. By 1980, it was 11 million hectares producing 16 million tonnes of grain. By 2010, it was 13.8 million hectares producing 21.8 million tonnes of wheat. Over the last 60 years, from 1950 to 2010, there has been a 300 per cent increase in the value of that crop in today's dollars—from $1.7 billion in 1950 up to $6.5 billion now. Very few industries could boast such growth.

I could supply the same for almost any agricultural product but, in a nutshell, total agricultural production in Australia is around $48 billion and, after value adding and processing, this rises to $192 billion a year, 60 per cent of which is exported—or around one third of our total exports. Export dollars are the ones that pay our bills in the world. They are the hard currency which underwrites our standard of living. With the agricultural sector providing a third of that income, its value to every Australian should not be underestimated.

However, at the same time that this miraculous increase in production and productivity has occurred, many of our rural communities have shrunk. Some have disappeared altogether. In fact, these communities are the victims of the productivity increases that have been demanded by the sector, and it is not likely to stop. Every year, farmers produce more product with fewer people because they have to. In 1920, the population of Australia was 58 per cent non-metro and 32 per cent rural. By 2010, 38 per cent of our population are non-metro and only 13 per cent now live in rural communities, yet this sector produces one third of our export wealth.

It is plainly obvious that a significant part of Australia's economic success rides on our strong agricultural sector, and while I hear many worry about food security in Australia, I am not so sure that this is cause for great concern. Simply, when we and the world want to pay enough for food, then we will produce more. That is not what happens in our marketing arrangements. In fact, the growers are pushed down to the bottom of the line. The hollowing out of the sector—often accompanied by a loss of dynamism within our communities—will ultimately hamper the sector's ability to respond to those demands and the great opportunities that will present themselves in a world population approaching nine billion—that is going to be one of the nation's biggest opportunities. The production of food is one of Australia's greatest strengths and opportunities, and it is worth noting that Australia has one of the lowest levels of government support for agriculture in the developed world. Subsidies are often hard to identify and come in various guises, including direct subsidies, tariffs, quotas and trade barriers disguised as something else. Our biggest agricultural competitor, the United States, pumps around $20 billion a year in direct subsidies into US agriculture, plus it imposes stringent import quotas to a range of products, including beef and sugar. The EU spends 57 billion euros a year on agriculture. In comparison, Australian agriculture has very little support notwithstanding the recent emergency exceptional circumstances arrangements during the drought. Traditionally, a modest amount of government support has come in the form of research subsidies, and it is easily argued that the net recipients of this important funding are the general public.

It is a great concern, however, that agricultural programs across the nation have been wound back. Over the last five years the federal government has abolished CSIRO Land and Water, and has cut tens of millions from agricultural research, including from the Rural Industries Research and Development Corporation. At the same time, collectively, those opposite make grand announcements about feel-good targets of greatly increased production and profitability in a sector with absolutely no plan of consequence or any idea how to achieve these targets. The states are no better. The state plan in South Australia calls for an increase of $20 billion by 2020 with no plan to get there. Time expired.