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Wednesday, 13 November 2013
Page: 180

Senator THORP (Tasmania) (13:00): It is no secret that Tasmania has suffered some severe economic blows over recent years, as international economic instability and the high Australian dollar have brought many retail, manufacturing and tourism businesses to their knees. But our agricultural sector has bucked this trend, proving itself to be a real shining light in our state's economy. In fact, it is one of the very few sectors that have continued to deliver improved performance in the long term.

Over five years, from 2003-04 to 2008-09, the gross value of our agricultural produce grew by a massive 42 per cent. In 2009-10, our agricultural and fisheries industries, for example, injected $1.6 billion into the economy. This direct farm-gate output contributed approximately five per cent to our gross state product and generated six per cent of the total state employment. When agriculture's post-farm-gate activity is added to the mix, the contribution to the economy increases to 16 per cent of gross state product and 20 per cent of state employment. As we move forward into the Asian century, there will be even more opportunities to expand this vital and productive sector to build greater wealth for our producers in the state economy and generate much-needed employment opportunities.

But Tasmanian producers also face significant challenges. While our geographical isolation provides confidence for our trading partners in the quality and purity of our produce, this can also be a double-edged sword. We are a small island and we are very far away from our major trading partners. As a result, we are always going to be faced with the hurdles of distance and scale in getting our produce to market. Leading economist Saul Eslake recognised this challenge recently during a visit to Launceston when he said:

In order to be economically sustainable in those circumstances, Tasmanian producers have to concentrate on producing premium products for which customers can be persuaded to pay high prices.

There is no future in the old Tasmanian model of producing what, for us, might be large volumes, but on a global scale are small volumes of essentially undifferentiated commodities competing only on price.

If we want to pay ourselves first-world wages and observe first-world standards of environmental protection and health and safety standards, then we can only do that while selling goods that people will pay high prices for, not competing on the basis of the lowest price.

To my mind, if Tasmanian agriculture is going to continue to grow, we need to take advantage of every opportunity to leverage our natural advantages to secure premium markets and lucrative contracts. Currently, a very clear advantage that Tasmanian producers are able to access is the state's GMO-free status. In 2001, the Tasmanian state government, of which I was a part, showed great foresight in placing a moratorium on the production of genetically modified crops. This move recognised that a GMO-free status would provide a vital point of difference for Tasmanian produce that would capitalise on our clean, green brand.

In 2007, I sat on the state government's joint select committee which was tasked with revisiting that moratorium. This was a robust and extensive review, which again concluded that our GMO-free status provides Tasmanian producers with a competitive advantage that far outweighs any potential benefits of genetically modified crops. Thanks to this state government moratorium, our producers have an iron-clad promise to their customers that produce is completely free of genetic modification. This is an asset that has proven to be valuable—and very saleable—to our international and domestic customers. But, with the moratorium set to expire in November next year, we again find ourselves at the GMO crossroads.

The Tasmanian government has established another review, and a decision should be made before the end of this year. But the government should be very aware that any potential decision to sacrifice the state's GMO-free status is one that cannot be unmade. It could also have far-reaching implications for many primary producers and for our clean, green Tasmanian brand. I believe that the government made the right decision in previous years, and I believe it is still the right one in 2013.

In recent months, I have actively met with the heads of industry and government to learn more about their perspective on the issue. The vast majority have agreed that allowing GM crops into Tasmania is a risk we simply cannot afford to take. Representatives from the honey, beef, fruit, feedlot, organic and vegetable sectors have told me not only that they are securing higher contracts on the basis of our clean, green, GMO-free reputation but also that they simply could not enter a number of markets, particularly in Europe and Asia, if the moratorium were to be lost. We must also recognise that if we open the door to GMOs we may be unwisely investing in a product that people simply do not want.

It is undeniable that innovation is needed to drive productivity within our agricultural sector, and I support advances that may increase farm profitability, but there are many ways to do this without turning to genetic modification. Better soil, water and traffic management all have a proven capacity to increase yields without the potential risks and negative market perception of GMOs. It would also be counterproductive to embrace innovation that results in products that consumers do not want to buy or that we have to sell at a reduced price for biofuel or animal feed, like many GM crops in North and South America. Across the globe, people are becoming much more food aware and they are increasingly concerned about what goes into their shopping baskets. We simply cannot afford to ignore this groundswell of community concern about gene technology in a world where 61 countries already have mandatory labelling of GMOs and at least 24 American states have GMO labelling bills before them this year.

We also need to look at the genetically modified crops that are currently available and consider the potential benefits they could offer producers and whether these benefits outweigh the benefits of maintaining the moratorium. Currently only two broadacre GM crops are approved for commercial growing in Australia: cotton, which is not suitable for Tasmania's climate, and canola. There has been talk of a genetically modified rye grass which the dairy industry is interested in pursuing, but by the industry's own reckoning there will not be a market-ready product for at least six years. This is likely to be beyond the time frame of an extension to the moratorium. Similarly, some poppy growers have called for an end to the moratorium, but to date there have been no commercial GM poppy crops grown anywhere in the world. In fact, in Australia all licences for research into GM poppies have been surrendered. The poppy industry also needs to be cognisant that a move to GM poppies would almost certainly impact opportunities to sell into the lucrative European market, which is notoriously concerned about GMOs.

So that only leaves genetically modified Roundup Ready canola. This product comprises only 10 per cent of national canola crops, showing farmers are still choosing conventional canola over its GM relative. This is not hard to understand given that discerning Japanese and European customers are offering premiums of up to $60 a tonne for GM-free produce. Very recently, Tasmania secured a contract for 600 hectares of oilseed from a new Japanese buyer at a price premium. I understand that Tasmanian non-GM canola is actually garnering the greatest price of all Australian canola, even above the prices for non-GM produce from other states. This sends a very clear message that it is not just the GM-free status of the individual crop that matters but also the confidence that the state-wide moratorium brings.

Some have suggested that Tasmania will somehow be left behind if we do not open our doors to genetically modified crops, with many claims being made of increased yield and productivity. However, some important studies have cast doubts on these claims. In fact, a very recent study undertaken by New Zealand genetics expert Professor Jack Heinemann compared agricultural productivity in North America and Western Europe over the last 50 years. The study concluded that GM-free crops in Europe actually yielded more per hectare than the USA's GM crops. Similarly, back in Australia a Birchip Cropping Group report on the 2011 canola season found GM varieties yielded no more than the best conventional varieties and were actually less profitable than non-GM crops by $150 a hectare due to higher input costs.

We should also recognise that GM crops bring with them potential environmental risks. The vast majority of currently approved GM crops across the globe are designed to exhibit one of two traits: either they are resistant to Monsanto's Roundup herbicide or they have a pesticide built into the cells of the plant itself. Unfortunately, many growers have found weeds develop resistance to the chemicals the GM crops are designed to withstand. This has resulted in increased herbicide use and has forced farms to turn to tank mixes of older, more dangerous chemicals to get the same effect—something I think all of us in this place would agree is undesirable.

Another risk of some GM crops is their capacity to spread their seed a great distance, escaping into the wild and putting neighbouring crops at risk of contamination. In New South Wales GM canola jumped containment lines within a year of the state's moratorium being lifted, and in Tasmania we still have rogue plants cropping up from small-scale GM canola trials in 1998-99. Western Australian farmer Steve Marsh learnt about this risk firsthand when seeds from his neighbour's GM crops blew into his fields, contaminating his crops, causing cancellation of his organic certification and sparking a legal battle for compensation. Contamination can also have large-scale trade implications, as we saw last year when Japan and South Korea suspended wheat imports from the United States after the discovery of unapproved genetically modified wheat in a field in Oregon.

In Tasmania our beekeepers are acutely aware of what they stand to lose if the moratorium is not maintained. Unfortunately, bees cannot tell the difference between GM and non-GM plants, and premium contracts in Europe would be jeopardised if there is any risk of GM contamination. Opening the doors to GMOs in Tasmania could also spell the end of vital pollination services for some of our vegetable crops if honey producers are forced to withdraw to maintain their GM-free status. This could threaten millions of dollars in revenue.

This reality stands in stark contrast to assertions in a recent report into the economic impacts of maintaining the moratorium which was commissioned by the state government and undertaken by Macquarie Franklin. In this report the authors asserted, 'Tasmania's GM-free status is not of itself a market advantage for honey producers.' The Macquarie Franklin report also failed to quantify the financial impacts on other industries, instead referring to the 'intangible benefits' of maintaining the moratorium. In doing so, it did not take into account the lucrative and very tangible contracts our producers are currently securing on the back of our clean, green GM-free status. While I believe the Macquarie Franklin report offered a solid contribution to our understanding of the issue, we simply cannot rely on 'intangibles' in making this important decision. As far as is practical, we need an industry-by-industry, contract-by-contract analysis of the situation to make an informed decision. To this end, I would strongly support further investment by the state government in this area. I am sure Senator Bushby would agree that, until we have this information and until GM products demonstrate incontrovertible benefits that outweigh the risk for Tasmanian primary producers, the moratorium needs to remain.

It is my great hope that the state government will recognise the value of the moratorium to our producers and the wider Tasmanian brand. However, even if the moratorium is saved, I still have a concern that it could potentially be threatened by current federal government negotiations into the Trans-Pacific Partnership Agreement, in particular the potential for investor states' dispute settlements. These provisions could, as I understand it, allow companies to sue the Australian government for decisions that result in the loss of profits. The previous Labor government opposed ISDS provisions during earlier Trans-Pacific Partnership negotiations, but there have been some reports that the new coalition government may support them. I urge the government to ensure that Australia retains sovereignty over its decision-making capacity and Tasmania's GMO moratorium by ensuring that any investor dispute provisions be excluded from any free trade agreements. (Time expired)