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Monday, 22 September 2008
Page: 8209

Mrs MOYLAN (8:30 PM) —It is a great privilege to be able to raise some matters of concern not only to my constituency but to the whole country—and that is concerns for farmers and food producers and the importance of food security in our country. I think it is fair to say that many Australians—many of us, in fact—take for granted access to an abundance of fresh food. Agriculture has long been the cornerstone of our nation, so we have never really questioned our farmers’ ability to produce the fresh food that we all have access to. Indeed, such is the abundance of food production in Australia that much of it is exported to other countries.

I think it is quite concerning that many Australian children today do not comprehend where milk comes from, for example, or indeed the grain to bake their bread and provide their breakfast cereal. Many young people are unable to identify a variety of fresh vegetables. Therefore, it is vital for us as elected members of this place to ensure that everyone understands the importance of local food production and the value of farming beyond the mere monetary considerations, because this is an issue of national security and national safety.

Times have changed. Many Australian farmers have been battling drought, some for over a decade, and irrigators increasingly battle future water allocations and availability. Those broadacre farmers who have been lucky enough to receive reliable rainfall struggle with the flow-on effects of an industry going through immense change, including cost pressures—as do those who faced drought, which was an added difficulty for them to cope with. Aside from marketing changes and the vagaries of international trade and global markets, one of the largest and most alarming hurdles confronting Australian growers today—our primary food producers, indeed—are sharply rising costs. These are the costs of farm inputs such as chemicals, fertilisers and fuel. All of these are necessities in optimal food production and they have all risen sharply in price.

Australian people deserve access to local, clean, quality and, dare I say it, affordable produce, but never has the quality and safety of Australian food production been more topical, given recent events in China. However, Australian consumer choice is threatened and it does not help when people do not understand where their produce comes from or how important local food production is. It is not until we lose something, quite often, that we realise how valuable it is. To destroy and lose local farm production would be catastrophic and extremely difficult to reverse in the short term. I think that at no time in our history have we seen a greater demonstration of this than when we had the sustained droughts through north and central New South Wales when I first came into this place in 1993. We saw the flow-on impact to small country towns and communities, and that impact was very dramatic. Some of those businesses that were lost were never re-established, as was the case for many farms.

There is now more at stake for our nation’s farmers than ever before, for with higher input costs this season a crop failure would be catastrophic. When you look at the cost of the inputs and the amount of money that farmers might have had to have borrowed to plant the season’s crop, it would be a failure of major proportions. We hope that is not the case. I think we need to be doing a rain dance in this place to make sure that our farmers across the country get good finishing rains this season.

Mr Hawke —It is pouring outside.

Mrs MOYLAN —Good. I am pleased to hear it. That is fantastic.

The DEPUTY SPEAKER (Mr AJ Schultz)—The chair brought it with him.

Mrs MOYLAN —Good. We hope that your good luck continues. To illustrate the input costs and how they have gone up, a local fertiliser distributor provided me with the most recent figures on some of the key input costs for growers. Nitrogen, or urea as it is commonly known, which is a crucial fertiliser and in Australian soils is absolutely essential, has risen from $519 a tonne in March 2007 to $598 a tonne this year, with prices expected to hover around $1,146 a tonne in March 2009. Similarly, nitrogen phosphate, or DAP as it is commonly known, went from $594 a tonne in March 2007 to $1,236 a tonne in March of this year. It is anticipated to rise to $1,696 a tonne by March 2009. Potassium, or muriate of potash, is currently $736 a tonne. That is $272 a tonne more than in the year before but an astonishing $491 a tonne less than the predicted March 2009 price.

Price rises are not limited to fertiliser. Chemical costs have also risen sharply. Figures supplied by a Landmark store in my electorate illustrate that glyphosate, a weedkiller, doubled in price over the year. The price for 450 active glyphosate in March last year was $4.75 a litre and rose to $6.25 litres in August. It reached $10 a litre in January this year and peaked at $13.50 a couple of months ago. It can be purchased now for $12.50 a litre. I am sure that those figures will not be lost on you, Deputy Speaker Schultz.

After years of drought and in some cases low market prices, farm profit margins cannot take further hammerings. Return rates are slim. Sometimes they are as little as 3.5 per cent or below. Farming has become a bigger gamble than ever. For example, a Pearce farmer made their 2009 estimated cash flow calculations available to me. Based on a 5,000 hectare wheat belt cropping and wool property, my constituent calculated a $40.84 profit per hectare, or $204,200 per annum. This number is, however, without the other farm expenses, including personal costs, taxation and repayments, as well as capital purchases. Assuming the season is good, keeping their debt repayments to a minimum, the farm is expected to lose $36.06 a hectare. That is right: it will have a loss, and the loss equates to about $180,300 for the coming year.

While this is only one example, the constant high farm input costs, increasing farm financial risk, is taking its toll. I am told that primary producers need between an eight and a 10 per cent return on capital to remain sustainable, so 3.5 to 3.7 just does not cut it. To get over the stumbling blocks, some farmers have indicated that they plan to decrease animal and plant stocks and make cuts to employees and delay yet again the improvement of soils for sustainable farming into the future. These are not really very satisfactory solutions; they are not solutions in the long run for an industry which feeds our country. Nevertheless, farmers are can-do people and Australian producers have become some of the most efficient in the world. Long ago, government subsidies, still large and prevalent in the competing economies of North America and Europe, ceased to be available to the Australian farmer.

While some may be of the view that if it is not a profitable enterprise then get out, I do not share that view. Being able to produce food is essential to Australia’s food security and in ensuring that Australian consumers have access to locally produced, high-quality, uncontaminated food. It is well worth examining some of the ways that government can provide policy that assists farmers through difficult times and assists with the continuity of food supply, because it is considered a matter of national priority.

Just talking to some farmers in Pearce, it is clear that they do have some constructive ideas on how government can help the agricultural sector. These include—and it is not an inclusive list but just to give some ideas because I am out of time—that the government support alternative or natural phosphate products or fertiliser subsidies; that they implement multiperil crop insurance; and that they accelerate machinery depreciation schedules and make it a flat rate across the board, encouraging greater farmer investment in new machinery. Our farming community contracts will be heavily reliant on imports which will be deeply concerning both in terms of national security and in terms of all Australians having the option to buy quality, reliable produce. (Time expired)