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Thursday, 30 September 1971
Page: 1777


Mr LLOYD (Murray) - The type of support for rural industry the Phosphate Fertilisers Bounty Act provides is most valuable because it encourages good farm management practices. Phosphate fertiliser is one of the foundations of improved crop and pasture practice over much of Australia. In addition, increased legume pasture production resulting from superphosphate application injects annually more nitrogen into the soil than the total production of chemical nitrogen in Australia. I was glad to hear the honourable member for Dawson (Dr Patterson) refer to this point and the possibility that this leguminous pasture and phosphatic fertiliser mixture or combination provides for increased productivity in the north.

The form of nitrogen produced by leguminous pastures guarantees increased soil fertility and a stable agricultural system without the dangers attendant upon heavy and continued chemical nitrogen application to pasture. This is now becoming apparent in the United States of America and Europe. I think it should be remembered that when environmentalists, ecologists or pollution experts - call them what you will - talk about this subject in relation to agriculture, they usually use figures of American or European origin. They make some very dangerous comparisons. The comparisons are dangerous because they are not true in the case of Australia because of our far more successful combination of superphosphate and legumes to obtain nitrogen than the application of continued and heavy doses of chemical nitrogen which is applied to pastures in some of these other countries.

In my opinion, Australian agronomists who developed and are still world leaders in legume pasture research have not received due acknowledgment for their work. Several overseas fertiliser companies would possibly now agree with this last statement after they wasted millions of dollars building nitrogen plants in Australia, some of which have never been used. They did this because they were confident in their belief in the superiority of American agricultural technique, and that what worked in the United States just had to work in Australia. They were proved rather disastrously wrong.

The honourable member for Dawson made comments concerning efficient manufacturing, overseas control, consortia and so on. When he talked about these matters he was really referring to nitrogenous fertilisers rather than phosphatic fertilisers. I think it should be remembered that in this debate we are talking basically about phosphatic fertilisers. The largest producer of phosphatic fertiliser in Australia, the Phosphate Co-op Co. of Aust., has just taken over the phosphate interests of 2 other producers in Victoria. I believe this is a very good thing. It is very good for the primary producers in Victoria and southern New South Wales who use this superphosphate. I believe that the farmers will welcome this aggregation into this giant co-operative because it will guarantee cheap cost superphosphate and efficient manufacturing. At a time when other manufacturing interests were losing money, the Phosphate Co-op Co. of Aust, has always been able to make a profit and sell superphosphate cheaper than anybody else in Australia.

I support this Bill which continues the superphosphate bounty for a further 3 years at the present level of $12 a ton for ordinary strength superphosphate. Since the bounty was introduced in 1963 at the rate of $6 a ton this Government's support has enabled fertiliser prices to remain reasonably stable and at a price to farmers possibly as cheap as anywhere else in the world. When the bounty was introduced it represented about 29 per cent of the Australian weighted average ex-works price for bulk superphosphate. In the first year of operation, bounty payments cost the Government $18.1m. In 1968 the bounty was increased to $8 a ton and to the present level in the 1969 Budget. This lifted the weighted average of the bounty to over 45 per cent of the price of superphosphate. Government support during 1969-70 amounted to almost $46m, over H times the level of assistance in the first year. Since then, the usage of superphosphate has declined due to wheat quotas and the fall in wool price, with the result that the Government bounty payment in 1970-71 was down by $5m. The estimate for this year is that it will be about $3m less again. I have taken these figures from statement 9 attached to the Budget Speech of the Treasurer (Mr Snedden). So the overall reduction in costs to the Government since the peak year of 1969-70 will be at least $8m. I do not know the present ex-works weighted average price for Australia but using the present ex-works price of the Phosphate Co-operative, the largest producer, I find that the bounty will provide a level of support of approximately 36 per cent to 38 per cent this year, or about 7 per cent less than when the bounty was increased to the present rate of $12 a ton.

As I said earlier, this Bill continues the bounty at the same level for another 3 years. However, because of the considerable reduction in costs to the Government - that is, about $8m - and because of the rural depression, I thought that the Government may have increased the bounty to keep the support at the 45 per cent level. However, I acknowledge that at 36 per cent this is still well above the original 29 per cent degree of support.

The cost of .production of phosphate fertiliser will almost certainly increase in the 3 years to 1974. In addition to internal manufacturing costs, the cost of rock phosphate from Nauru could easily rise in response to world demand. The ex-Nauru price has risen slightly since the last bounty adjustment in 1969 and Nauru provides, I believe, about half of our requirements. I ask the Government to keep the level of bounty under review and be ready to increase it before 1974. I support the Bill.







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