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Address to National Country Party of Australia (SA) Inc. conference/workshop, Bordertown



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PR IM A R Y INDUSTRY M EDIA RELEASE

STATEMENT BY THE MiNISTER FOR PRIMARY INDUSTRY THE RT. HON. IAN SINCLAIR M.P.

CANBERRA

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ADDRESS BY THE RT. HON. IAN SINCLAIR, DEPUTY LEADER OF THE NATIONAL COUNTRY PARTY AND MINISTER FOR PRIMARY INDUSTRY, TO THE NATIONAL COUNTRY PARTY OF AUSTRALIA (SA) INC. CONFERENCE/WORKSHOP, BORDERTOWN, 10.20AM SATURDAY, 26 MAY 1979.

The current financial year has seen a significant upturn in the

rural sector generally.

The recent release by the Bureau of Agricultural Economics of

forecasts establishing higher expected incomes for rural producers

throughout Australia was indeed good news.

Earlier forecasts of a marked upturn in rural sector profitability

in the current season, fortunately, have now been confirmed. ■

Gross value of agricultural output is forecast to rise by 43% to

$10,000 million, the value of agricultural exports by 15% to

$5,800 million, and total farm income by 101% to $4,500 million.

Income per farm for 1978/79 is forecast to be $26,850, which is

double the figure for 1977/78.

Substantial increases in output, especially wheat, and in commodity

prices, especially beef cattle, are the major factors underlying

the forecast improvement in the overall rural economy.

Gross value of wheat production in 1978/79 is forecast at a

record $2,030 million, more than double last year's value of

$940 million. The increase is due mainly to the sharp rise in

production, now estimated at a record 18.3 million tonnes, although

average prices are also expected to be slightly above those in the

previous season.

The gross value of wool production in 1978/79 is forecast at

$1,345 million, a 12% increase over 1977/78. Because of the recent

surge in the wool market, auction prices for the 1978/79 season

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are now expected to average 330-335 cents/kg clean — about

205 cents/kg greasy.

The gross value of sheep and lambs slaughtered during 1978/79

is forecast at $505 million, an increase of 25% on the previous

year's figure.

The gross value of cattle and calves slaughtered in 1978/79 is

forecast at $2,375 million, double the figure for 1977/78.

Buoyant market conditions arising from a combination of strong

export demand and smaller yardings of cattle are forecast to

result in average saleyard prices in 1978/79 being about 110%

above the previous year's levels.

This buoyant expectation, however, should not delude the community

at large into believing that all the problems of the rural sector

are behind them. ,

Regrettably, there is no guarantee that present conditions will

always continue.

After many years of below average returns, the current welcome

reversal of farmers' fortunes should be seen against the background

of the continuing pattern of fluctuations characteristic of the

rural sector.

The cycle of seasons and of markets will, of course, always be

part of the farmer's lot. The former applies in every agricultural

country.

Markets are more sensitive for Australia as a major exporter than

for countries where agriculture is essentially produced for

domestic consumption.

In any assessment of the rural sector however, it is most

important to examine domestic economic conditions.

The Government's program has reduced inflation substantially

although unemployment remains at a worrying level.

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This week' s ecoriomic statement has been intended to try and contain

the deficit to ensure the Government's control of inflation can

be still kept as tight as possible.

We are very conscious of the extent to which Australian primary

producers dependent on export markets must maintain their

competitiveness. This involves very much the extent to which

they are able to produce their commodity at a price which enables

it to be sold in world markets and yet for the Australian farmer

to make a profit.

In the measures announced by the Treasurer on Thursday night

there have been a number of reductions affecting assistance to

primary industry for 1979/80 and a number of new levies imposed.

Favourable rural conditions have afforded an opportunity to

scale down some programs of assistance.

These are not going to in any way mean a withdrawal of support

for primary industry by the Government but rather they indicate

that the Government is prepared to provide assistance in years :

when assistance is needed but to adjust to enable producers to

be more self sufficient at a time when there is not the same

basic requirement for welfare and assistance measures to the rural

sector.

There are a number of particular commodities of specific interest

in this community and I would like to talk a little about them

today.

WHEAT

The Government is a t .this stage looking at recommendations around

wheat stabilisation. . Negotiations have been undertaken with the

Australian Wheatgrowers1 Federation and State Minister's for

Agriculture.

There has been no conclusion yetof the details of the new Wheat

Stabilisation proposals to apply from the end of September this

year. However/ legislation wi.1 .1 be introduced in time for the new

scheme to operate from 1 October next.

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The new scheme will be substantially different from the

present one. It is aimed to set a guaranteed minimum price

(to replace the first advance) representing 95% of previous,

current and next year's pool returns. The domestic price for

human consumption will be separate from the price of stock feed

wheat and will be adjusted by a formula designed to protect

wheat growers.

I am certain the new proposals will assist industry profitability.

SHEEP

Another industry of significance in this area is sheep-raising -

both for wool and meat.

With respect to wool it will be necessary before the end of this

selling season to consider a new wool reserve price to be operated

by the Australian Wool Corporation. No decision will be taken

on this until closer to the end of the present season.

Recently there has been a very marked strengthening of the

Australian wool market. This is a bullish indication for next

season and a basis for reviewing the level of price support.

The Government is determined to maintain the floor price into the

future.

Growers will know in addition the AWC operates on a potholing basis

and so maintains a firm market well above the floor.

The Australian Wool Corporation has also introduced the LOPS

proposal which is designed to stimulate greater efficiency

among woolbrokers and private buyers in handling and marketing

the Australian greasy woolclip.

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With the recovery of the wool market, brokers now face a major

challenge to contribute to improving the efficiency of the

marketing chain.

Their position in the industry has been seriously questioned

by growers and others in recent years. While they provide many

services, their justification for preserving their significant

present position in handling the Australian wool clip must be

predicated on their providing an efficient and competitive

service benefiting, wool growers.

Another important area of responsibility of the Australian Wool

Corporation is in its membership of the International Wool ,

Secretariat.

Shortly, a number of Australian wool growers will attend a

meeting of the International Wool Textile Organisation in Europe

There, they will see at first hand the effectiveness of the work

of the I.W.S. '

This Organisation, however, is running into funding difficulties

Its survival depends on increased support from the wool industry

With changed currency relativities and continued competition

from alternate fibres, the promotional efforts of the I.W.S.

are possibly even more significant today than they have been

previously.

This may well need additional levies from growers to fund future

I.W.S. operations.

This year I hope to have discussions with the Australian Wool

Industry Conference about possible changes to the present

levies payable on wool to take account of this demand. _

At the same time, I hope to be able to discuss the possibility

of the marketing levy revolving.

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LIVE SHEEP EXPORTS ,

An indication of the continued interest shown by the Middle East

in purchasing Australian live sheep has been the presence in

Australia of two Ministers from Middle East countries in the last

fortnight — a Minister from Bahrain and a Minister from Saudi

Arabia. ·

Iran is, however, the major market with its population of 40

million people. The political changes which have followed the

overthrow of the Shah make the future of the Iran market a little

more uncertain. However, there is no doubt that there are

certain continued major export opportunities for live sheep in

the Middle East as a whble in the future.

This is an important alternative to carcase meat exports, and it

is a ready way by which prices for cast for age sheep can be

maintained to the benefit of Australian sheep farmers.

OTHER RURAL INDUSTRIES

There are, of course, many other major primary industries -­

the beef industry, the fruit growing industry, and the dairy

industry being three. In each of these the Government is

maintaining its programme of disease control, domestic support,

and export market development.

There is also a need for all rural producers to recognise the

problems associated with each commodity. These include access

to finance for property maintenance and efficient farm operation.

The unexpected high level of demand on funds of the Primary

Industry Bank of Australia is an illustration. These funds are

supplemented by an equal increase in the level of overdraft

demand on the Australian trading banks and the Commonwealth

Development Bank.

There are also other assistance schemes available to primary

producers, including Income Equalisation Deposits, and

modification to the tax averaging provisions.

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This year, with greater cash flows, I.E.D.s provide excellent

opportunities for farmers to set aside capital and tax liability

for less fortunate years. '

In every major rural area, since its re-election in 1975, the '

Government has demonstrated its determination to restore primary

producers to a strong position within the Australian economy.

As members.of that Government, the National Country Party has

advocated that there is a need for balanced economic programmes

for every sector of the community.

It is important that the rural producer is not neglected in the

formulation and implementation of the total Government economic

policy. .

The presence of the Party iri the Federal Government has ensured

that this is so.

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