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Tuesday, 25 November 1986
Page: 2719


Senator VIGOR(9.38) —I move:

Leave out all words after `That', insert: `the Bill be withdrawn and redrafted to provide for the payment of the bounty to the consumer rather than to the producer'.

The Government in the Fertilisers Subsidy Bill is trying to do two things at the same time. I believe that the Government will achieve neither in this case. It says it is trying to support the local farming industry which is something it promised to do before the Budget and to produce out of the bag a local phosphate fertiliser industry. This I do not believe it will do by this type of process. I believe this Bill results from a misunderstanding of how the industry operates. We currently import phosphate rock which represents something like 70 per cent to 75 per cent of the total content of what are called locally produced fertilisers. This produces what is known as single superphosphate. It is very convenient to produce this local superphosphate very near to the place where farmers are.

The legislation goes so far as to make it mandatory for the manufacturer to distribute the bounty to the farmers. But this imposition is only put upon local manufacturers. Importers under this scheme are no longer eligible to distribute the bounty. The Government in this way is discriminating against certain farmers who need particular high phosphate and nitrogenous fertilisers and who do not want the extra sulphate which is involved in single superphosphate. If the Government came clean and recognised the need for a subsidy to farmers to counteract the devastating effects of its high interest rates and undervalued dollar on exporters, including farmers, it would call this subsidy a farmers subsidy and pay it to the farmers openly and directly. The purpose of this amendment is to say that the Bill should be honest and recognise what the superphosphate bounty is.

To make my point very clear, let us consider certain types of high analysis phosphates, such as di-ammonium phosphate, which contains soluble and available nitrogen and phosphorus. It does not contain sulphate which has, over the years, damaged certain areas through overapplication. Certain areas of Yorke Peninsula in my State require a special type of high analysis phosphate. This phosphate has been imported by the same companies which supply single phosphate. Seventy-five per cent of the fertiliser used in my State is supplied by Adelaide and Wallaroo Fertilizers Ltd. The other 25 per cent is supplied by Hi-Fert Pty Ltd, which is an importer of DAP. It has imported this phosphate on the basis of a need by farmers. If this subsidy is a subsidy for farmers, it is quite unfair that we should discriminate against the farmers of the Yorke Peninsula.

A very strong principle built into Australian Democrats policy is that we should not support import industries by way of bounties. As the Government's Bill removes the subsidy on imported fertiliser, leaving it only on locally produced fertilisers, it follows Democrat policy. This leaves me in a quandary in terms of my vote. I have endeavoured to resolve the situation by getting a positive statement from the Government that the measure is a grant to farmers. If my amendment, which is a way of suggesting to the Government that it present this subsidy in a way which will be acceptable to me, is not supported, I will have to reconsider my vote on the Bill.

It is very important that fertilisers be suitable for specific land. I seek from the Minister for Community Services (Senator Grimes) an undertaking that the Government will consider the matter of high analysis nitrogenous and phosphorous fertilisers in regard to the areas of my State where there is no local producer of DAP, yet there is a demand for DAP, and try to find some means of making this legislation fair for those farmers. Farmers are a very adaptable group. In this Bill we are cutting out one of their sources of fertilisers. They will try to adapt new technologies but will probably be forced back to old technology as a means of staving off the problems that will result from the likely hike in price of high analysis fertiliser. It is Luddite to discriminate against modern farming methods, which include the use of new types of fertiliser.

To attempt to combine a manufacturing subsidy for fertilisers with what traditionally has been a subsidy for farmers is nothing short of a sleight of hand. Yet this sleight of hand is the inherent consequence of hiding a subsidy for farmers in the guise of a fertiliser subsidy. Let us be honest. Let us count the cost realistically of this measure which involves almost the last remaining subsidy to farmers. Until farmers are prepared to receive direct subsidies, which are their due, in compensation for the cost increases they face because of the protection of local manufacturers through the various tariff barriers and until they can honestly call a spade a spade and stop looking for backhanded subsidies which can be distorted and negated without the true cost being counted, as is the case with this sleight of hand, they will not get what they should get if we were properly encouraging their industry.

We should pay the farmers directly. We should be straight. We should give them the money promised to them instead of processing it through a group of manufacturers who funnily enough, are the same people, in most cases, as the importers-the local phosphate producers are importers as well. Because of this, distortions will be introduced into the market by this Bill. I do not know what the distortions will be but they will be deleterious to the market. I seek the Government's view on how it will overcome the iniquity which this Bill will impose on the farmers of my community.