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Tuesday, 12 November 1974
Page: 2207

Senator YOUNG -I ask the Minister for Agriculture: Will he urge the Government to increase the first advance payment on wheat to $1.80 a bushel for the coming 1974-75 harvest in order to assist the liquidity problems of farmers and to help counter increasing costs, including the huge increase in the price of superphosphate? With world wheat prices so high and demand for wheat so strong, would not such a first advance payment be financially possible? If the Minister is not prepared to support such a proposal, will he give the reasons why, particularly in view of the fact that he is urging farmers to expand wheat production greatly, which will involve a big early cash outlay?

Senator WRIEDT - It is true that the Australian wheat industry has asked the Government to increase the first advance payment. It should be pointed out, as Senator Young well knows, that agreement was reached between the Government and the industry to make a first advance payment of $1.20 a bushel on deliveries of wheat to the Australian Wheat Board this season. That was the minimum figure requested by the Australian Wheatgrowers Federation earlier this year and it was granted by the Government. We are now asked to increase that first advance payment, despite the agreement which had been entered into. As was announced last week, the first advance payment for next season's crop has been increased to $1.50 a bushel the purpose of that being to maximise the sowings of wheat for the crop in 1975, for reasons which do not need to be stated.

The argument in respect of increasing the first advance payment for this crop is, as Senator Young pointed out, that wheat farmers have insufficient liquidity to enable them to plant the new crop during April and May of next year. But the facts do not support that contention. Following the 1972 crop, wheat plantings in August increased from 18 million acres to 24 million acres, an increase of 33W per cent. Farmers increased their plantings to that extent at the same time as the Government increased the first advance payment and as prices began to move upwards on the world markets. In other words, the factor that caused wheat growers to increase their plantings by that massive one-third at that time, despite the fact that wool and meat prices were very high, was that they knew they would receive a good return. This year the expected return is better still. Wheat prices are higher; they are almost double what they were at that time. The wheat grower of Australia can be assured that for whatever wheat he can deliver next year to the Australian Wheat Board he will receive an excellent economic return.

In regard to the question of liquidity, I point out that it had been customary in the past, as Senator Young would know, once the Australian Wheat Board made the first advance payment, for growers to wait for subsequent payments from the pool. This is the first year in which 3 payments have been made to the wheat industry by the November of the relevant year. At this stage last year- that is, November of last yearthe average amount paid to wheat growers from last year's crop was $5,100. This year the average amount is $1 1,000. In other words, the Australian wheat grower has received, on average, twice as much in cash this year as he received last year. On the predictions ofthe Australian Wheat Board, by February of 1975 the Australian wheat farmer will have received on average a little under $15,000 in cash- something that was unheard of in the past. The statement that there is a liquidity problem in the industry is just not supportable. We have heard the argument of increased inflation and increased superphosphate costs. If honourable senators look at the overall income received by wheat growers in that time, I think that they will agree that the liquidity position of the average Australian wheat grower today is better than it has ever been in the past. Certainly, it is better than it was in the last 2 years when growers in fact increased their plantings by one-third. I think that every Australian wheat grower will realise, as a business man, that he has one of the best economic opportunities available to him in 1975 that he has ever had in the history of the wheat industry.

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