Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 20 June 1994
Page: 1696


Senator MURPHY —I direct my question to the Minister for Primary Industries and Energy. Given the recent press reports talking up the recovery in the rural economy, can the minister further inform the Senate about the state of the rural sector, both in terms of commodity prices and farm incomes?


Senator Hill —Tell them that they have never had it so good; that is what you always tell them.


Senator COLLINS —No, I am not going to tell them that, Senator Hill. It is more positive news. There has been a good deal of press reporting on the state of the rural economy in recent days. Some of it has been accurate and some of it has somewhat overstated the situation in terms of the analysis that has been drawn. Undoubtedly, Australian farmers have faced very tough financial and physical operating conditions in recent years. This has been brought on mostly by drought, some of it unprecedented in this country's history—the longest period of dry spells ever experienced in a number of locations in Australia. The other problem has been low commodity prices.

  The recent rains in some regions have been very welcome. They have come at a time when both commodity prices and farm incomes are showing positive signs of recovery. Without overstating the improvements—and I think some of the reports have overstated the improvements—for farmers in recent times, it is fair to say that over 1993-94 many of Australia's agricultural and pastoral regions have experienced good to excellent seasonal conditions and steadily improving market conditions.

  The ABARE's latest forecast of commodity prices, which will be released tomorrow, continues the good news. It forecasts that there will be a seven per cent rise in general commodity prices over 1994-95, mainly due to the 12 per cent rise which is expected in rural commodities. Despite the effect of a higher exchange rate, farm export earnings for 1994-95 will also rise strongly by around six per cent. Further evidence of an improved outlook came last week from ABARE's 1993-94 farm survey report, which found that average incomes for broadacre farmers increased by 33 per cent to 37,200—


Senator Calvert —From what? From nothing.


Senator COLLINS —From a low base, following an 18 per cent increase in 1992-93. The increase in farm incomes reflects both stronger commodity prices and growth farm outlook, in particular from increases in the production of grain, oilseed and legume crops, as well as generally better beef prices and increased milk production.

  Opposition senators interjecting


Senator COLLINS —Nothing provokes the opposition like positive news. Recent rains and improved wool prices, although not picked up in the ABARE survey results, should also add to farm performance. There does continue to be a great deal of regional variation in rural Australia—which will always be the case—and that needs to be kept in mind when talking about farm performance. Despite some of the overstatement that I have just referred to, it should be remembered that, despite higher incomes, average farm business profit is still expected to be negative on most farms for the fourth successive year.

  Although the picture is variable across Australia, ABARE's reports reinforce much of the evidence that farming conditions are much better than in recent years and that this important sector will again contribute to the broader economic recovery which is now under way, as well as to Australia's export performance.