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Monday, 24 May 1965

Senator SCOTT (Western Australia) . - It was with some degree of concern, but with considerable understanding, that I learnt of the Government's decision to postpone the help that it was to give to Western Australia in the development of the greater Ord River scheme. Application for financial assistance was made by Western Australia approximately 12 months ago. The Prime Minister (Sir Robert Menzies) issued a statement on this subject in another place. That statement was read in the Senate on 5th May this year by the Leader of the Government in the Senate (Senator Paltridge). Three reasons were given by the Government for the deferment of its assistance. The first was that the Government wanted to have more information regarding the profitability of cotton growing in the area. The second reason was that the Government wanted to know the ability of farmers to control insect pests in the area. Thirdly, the Government wanted more information on the behaviour of tropical soils after intensive production had been carried on over a few years.

I propose briefly to look at the Ord River scheme as a whole and study it from its inception. It goes back to 1942 or 1943 when the Engineer for Public Works, employed by the Government of Western Australia, decided to visit the area and, following his visit, suggested that it was ideally suited for irrigation. The government of the day, following up this suggestion, decided to establish, with the help of the Commonwealth Government, the Kimberley Research Station at Ivanhoe on the Ord River in 1947. An intensive research programme has been carried out each year into the profitability and the possibility of growing various types of plants in that area. The latest information we have is that, under irrigation, the most profitable crop that can be grown is cotton. Other crops which were considered were sugar, rice, safflower and linseed. But the most profitable crop and the one on which the major case was built was cotton because of the large yields of seed cotton that could be procured each year on the Ord.

The Commonwealth Government came to the assistance of the State Government by providing some £5 million towards the cost of the diversion dam at Bandicoot Bar, so that the initial stage of the scheme could be commenced. This scheme provided sufficient water, I understand, to irrigate some 30,000 acres. A major scheme would be capable of irrigating some 200,000 acres in all. The Bandicoot Bar scheme, where the diversion dam was built, was commenced two or three years ago. The dam was completed and the irrigation channels were installed. The first five farms were allocated for the growing area in 1963-64. Each farmer on the five farms that were allocated grew approximately 300 acres of cotton.

It is interesting to note the return per "farmer. I find that the average cost of the five farms, taking into account all the items of production, was £16,777. This figure was made in part as follows - Spraying and defoliation, £4,415; fertiliser and seed, £2,806; water, £909; fuel and oil, £496; hired labour, £2,700; repairs and maintenance, £186; licences and insurance, £226; interest including interest owing, £650; and other items £92. Those items made a total cash cost of £12,480.

Senator Hannaford - That is part of the cost?

Senator SCOTT - Yes, that is part of the £16,777. I will give the Senate the balance.

Senator O'Byrne - Those are running costs?

Senator SCOTT - They are the average running costs per year of the five farms.

Senator O'Byrne - That is over £3,000 a farm?

Senator SCOTT - No, the cost is £16,777 for each farm. Depreciation and repair allowances amounted to £2,882. So, cash costs plus depreciation etcetera comes to £15,362. We arrive at that figure by adding the depreciation and repair allowances of £2,882 to the total cash cost of £12,480. Then, we have to provide for interest on capital, balance to bring 6 per cent, of the total requirements - that is, 6 per cent, of £34,419, which was the average capital cost of each farm. It amounts to £1,415. That brings the total costs of each farm to £16,777.

The returns to the growers may be expressed in various ways; but if we allow for all costs, including £1,500 a year for each labour unit except the operator, depreciation, and interest on capital at the rate of 6 per cent., the average return to the operator was £2,826. A break down of the figures for the various farmers reveals that Arbuckle and Co. had a surplus of £10,000, J. Arbuckle and Sons a surplus of £9,581, Ord River Farmers Ltd. a surplus of £6,610, Revell Brothers a surplus of £7,109, and W. H. Dougall a surplus of £2,230. The average yield per acre for the first year of operation was 1,330 lb. The information that we have for this year reveals that instead of the average yield of seed cotton being 1,330 lb. per acre, the first three crops harvested will average 1,800 lb. They have been harvested early so that the crops may be ratooned. That means that the plants can be rewatered and another crop grown. It is expected that the yield from the ratoon

Crop on each of those farms will be 1,200 lb. That will make a total yield of 3,000 lb. of seed cotton per acre.

The result that I have just mentioned was not evident when the Government made its decision in relation to the Ord project. I must be fair, because the decision was made on 28th April. At least, that is when a letter was addressed by the Prime Minister to the honorable member for Kalgoolie (Mr. Collard) and the Premier of Western Australia. The Government did not know then what the subsequent yields would be, and it wanted to be sure about the position.

I point out here and now that the Prime Minister said that the proposition had been deferred. That proposition embodied an application by the State Government for financial assistance amounting in all to approximately £30 million. The cost of the scheme will be as follows: For the dam, £8,300,000; for channelling and drains, £11 million; for a diesel generating station, £700,000; and, at a later stage, for a hydroelectric station, £6 million. That makes a total of £26 million for that section of the work. In addition, housing for the area will cost £4 million, making an overall total of £30 million. That money was to have been spent from 1964-65 to 1977-78. Proposed expenditure in the initial stages was not to be very heavy. The State applied for a total sum of only £385,000 for the first year, almost £1 million for 1965-66, £1.8 million in the following year, a sum of £3.7 million in 1967-68, with a tailing off to 360,000 in 1976-77. The greatest amount to be expended in any one year was £3,720,000. Such expenditure over a long period on such a large development programme is not very great, particularly when we consider what could be achieved in this area of northern Australia.

There is little activity in the north of Australia apart from mining and the pastoral industry. The pastoral industry, which embraces beef cattle and sheep, has been almost static, particularly in the Kimberleys, since the beginning of this century. Stock numbers have increased by only 100 per cent, in the Northern Territory over the last 60 years. I cannot speak about Queensland, because I do not know the figures accurately. As I said, there has been virtually no development in the pastoral industry in the Kimberleys since the early 1900's. Cattle numbers in that area in 1900 were reputed to be approximately 500,000. I doubt whether more than that number could be mustered at the present time. I have not the sheep numbers before me at the moment, but I believe that they have not increased either.

If we are to develop these areas, we must provide irrigation. When we note that the

Ord River project will provide approximately 3i million acre feet of water at a cost of £8 million for the dam, it will be seen that it will be the cheapest dam per acre foot of water to have been built since the end of the war. At one stage I had a list of the cost of the various dams. I recall that the cost of the Eucumbene Dam was £5 per acre foot, that being one of the cheapest dams to have been built. The cost of some of the larger dams in Victoria and New South Wales was £50 per acre foot. As I indicated, the cost of the Ord River dam will be less than half the cost of the Eucumbene Dam. The cost of water for the Ord project is cheaper than anywhere else in Australia. Apparently the dam site is ideal. But we have these problems. The information is now to hand that cotton can be grown quite successfully in the area. Some knockers in Australia have opposed the Ord River scheme. I have here a book entitled " The Northern Myth " written by a Mr. Davidson.

Senator Branson - Do not quote him, for goodness sake.

Senator SCOTT - I said that he was the greatest knocker of the project we have in Australia outside this Parliament. I believe there are a few inside this Parliament. I do not blame them for being critical. It is reasonable that there should be criticism, but we must be practical about this scheme. I shall cite some of the figures Mr. Davidson has used in his book. He writes that other areas of the Commonwealth are much more likely to produce better quality seed cotton than the Ord River area. He states that taking into consideration a differential of about one-third between research station and farming results, the area will produce from a first crop and a return crop an annual production of about 1,900 lb. an acre. He is roughly 100 per cent. out. He is at least 80 per cent, out in his estimate and that is where the gentleman has gone so completely wrong. Figures can always be produced to make a case, but if the figures are wrong, there is no case.

Senator Gorton - What are the correct figures?

Senator SCOTT - In the first year, Mr. Arbuckle, a farmer in the area, produced a crop returning 1,800 lb. an acre from the first crop and 1,200 lb. an acre from the return crop, making a total of 3,000 lb. an acre in that year. It is believed that the three farms which have just finished harvesting will average 1,800 lb. an acre from the first crop and will produce over 1,200 lb. an acre from the return crop if the percentage obtained last year is maintained. But Mr. Davidson writes that the area can be expected to produce only 1,900 lb. of seed cotton an acre annually, taking into consideration the original planting and the return crop in the same year. No doubt when Mr. Davidson wrote his book he expected every thinking person in the community to take notice of it. No doubt notice has been taken of it.

Senator Cormack - The honorable senator is citing the weight of seed, and not the results in money.

Senator SCOTT - I was citing the yield in pounds weight of the crop an acre.

Senator Gorton - Mr. Davidson is 50 per cent, out, not 1 00 per cent. out.

Senator SCOTT - I shall qualify my statement and say that he is out to a considerable extent. He is out by the difference between 1,900 lb. and 3,000 lb. I think he will be proved to have made a 100 per cent, error when a year or two has passed. People belonging to families in Arizona who have grown cotton for generations are coming to Australia. There were four Americans who visited many areas which had a potential for growing cotton. They visited Western Australia and the Department of Agriculture informed them of the possibilities of the Ord River area. The Americans visited the Ord, inspected the area and returned to Perth where they said that if they were granted farms in that area they would sell their properties in America and settle in Australia.

When they were in Perth, prior to returning to the United States of America and before they were allocated farms, they issued a Press statement to the effect that if they were granted blocks in the Ord River area, they expected that within a few years they would obtain an annual return in excess of 3,000 lb. an acre. They hoped to obtain a return of 4,000 lb. an acre annually. They specifically stated their belief that after a trial period of a few years they would be so successful in the growing of cotton in the area that they would not need a subsidy. The Americans returned to Arizona having been allocated their farms in the Ord River area. They are now farming in that area. ] believe that in a very few years, with the benefit of the knowledge they are gaining each year, they will be producing annually between 3,000 lb. and 4,000 lb. of seed cotton an acre. What an investment it is for an individual to obtain a farm on the Ord.

Senator Morris - The quality of the cotton is good, is it not?

Senator SCOTT - lt is excellent. The annual returns show that 67 per cent, of the cotton produced on all the farms has qualified for the premium price. I believe that was for li-inch cotton. The highest yield to qualify as premium cotton on an individual property was 76 per cent. These results indicate what an excellent area it is for cotton growing. The farmers are obtaining about 600 acres each at a cost of roughly £25 or £30 an acre. The properties are ready to walk into, sow the crops and develop the pastures. I doubt whether there is a better proposition available in any other part of Australia.

Senator Dittmer - It. is costing them more than £25 to £30 an acre.

Senator SCOTT - I am only citing the cost of the land. The average capitalisation cost of land for 1963-64 was £8,734 for 660 acres. The average cost of structures was £1,500; of vehicles, £2,955; of tractors, £15,000; and of plant £6,167; and the total was £34,419.

Senator Dittmer - The honorable senator said that it was about £18,000 a farm.

Senator SCOTT - This is the official figure. What I said and what the honorable senator said might be different.

Senator Dittmer - No, mine are the correct figures, as are the official figures.

Senator SCOTT - For a total investment of £34,000 a farmer on the Ord can obtain 660 acres of irrigable land and can grow cotton and other crops. Cotton is the first crop that will make him a profit. The farmers expect to show handsome returns, greater than they got in the first year. The Government, I understand and believe, has not knocked back the scheme at all. It has deferred it for 12 months.

Senator Dittmer - And dissipated the work force.

Senator SCOTT - When the honorable senator mentions the work force, he should know what he is talking about. I shall tell him something about it.

Senator Dittmer - Where has it gone?

Senator SCOTT - This may have been one of the reasons why the proposal was deferred. If I had deferred consideration of the Ord Scheme, the reason would have been because' of the work force. In Western Australia, and no doubt in other parts of the Commonwealth, there is at present a condition of over full employment. As the honorable senator seems to want to go a little further into this matter. I explain that three or four mining companies are endeavouring to export iron ore from the north of Western Australia and are anxious to obtain 2,000 or 3,000 workmen. I understand on pretty good authority that because this labour it not obtainable the undertakings are offering over award wages. If another 300 or 400 men were required on the Ord, this would make the position more acute. I think that we are rapidly getting to a stage, particularly in Western Australia, at which we shall have to bring in labour from overseas to meet the requirements of these additional capital development projects. I would hope that if the Government had granted the request for additional assistance for the Ord scheme it would have made some arrangements for additional labour. No doubt such arrangements can be made.

I mentioned the growing of cotton. I believe that the growing of a new variety of rice could also be successful. We have not been successful rice growers in the past but the Commonwealth Scientific and Industrial Research Organisation has developed a new type of rice called sirgna, from which a yield of over two tons an acre in the north of Australia is expected. The first plantings of this variety on an experimental basis are expected to be made this year.

Sugar is grown successfully on the Ord experimental station. Tt gives a higher yield per acre than is obtained in almost any other part of Australia. The growing of sugar would necessitate the construction of sugar mills in the area and it may be a long term project. When the Western Australian Government was considering sugar, the overseas price was over £100 a ton. As the honorable senator knows, the sterling parity today has dropped quite considerably. No doubt with the construction of a sugar mill we would be able to grow large quantities of sugar in Western Australia to meet portion of Australia's requirements.

The Ord River project would be a contribution towards development of the north of Australia. We must not think that it will just develop Western Australia, because onefifth of the area affected is in the Northern Territory, lt adjoins the Keep River, which is the river to the east of the Ord which is totally in the Northern Territory. As onefifth of the area affected is in the Northern Territory, this will not be entirely a Western Australia project. Agriculturally, it will help to develop the north. I think that we have to undertake this development and I hope that in 12 months, after getting further reports and another approach from the State Government, this Government will look at the matter sympathetically.

Senator Dittmer - I agree with the honorable senator. What is the acreage involved?

Senator SCOTT - Two hundred thousand acres.

Senator Dittmer - There are 150,000 acres of good arable land and 50,000 acres of marginal land.

Senator SCOTT - I told the honorable senator how many acres were involved and he contradicted me. Why did he ask me, if he knew the area?

Senator Wright - He gave the same figure, but divided it into arable and marginal land.

Senator SCOTT - It was divided into arable and marginal land in the book. I know very well the figures that are there. In the initial stages 30,000 acres are involved. Initially there will be about 35 or 40 farms. Later there will be many more. If we can have a sugar mill established or if we introduce irrigated pastures to fatten cattle, we can go a long way with the project. I should have liked the Commonwealth Government to agree to the Western Australian Government's application for financial assistance. Unfortunately, it has not done so, but this is only one phase of the development of the north. I am convinced that adjacent to the Ord and in the Northern Territory and Queensland are large areas of high rainfall country that can grow leguminous plants for the fattening of cattle. If some of the higher rainfall areas adjacent to the Ord are utilised, we oan breed and produce many more cattle than are being produced at the moment. With the planting of siatro, Townsville lucerne and other legumes, the development of the north will be assisted as much as the development of the higher rainfall areas in the south of Australia were assisted by the planting of subterranean clover. I have noted this particularly of late years. Last year or the year before I was at the Townsville Research Station, where I saw siatro growing profusely, and also Townsville lucerne. The price of siatro was about 30s. per lb., and the price of Townsville lucerne is about 7s. or 8s. per lb. at present. These grasses are being sought by many of the cattie people in the area. We can foresee in this part of Australia a new phase of development which will follow the planting of these legumes, and we shall see far more cattle per square mile produced in the area than there are at present. This is how it will be done.

Returning to the Ord River project, I noticed also that one of the reasons why the Government has decided to defer the scheme is that it wants more information about the insects in the area and the ability of the farmers to control them. The first crop was partially ruined by prodaemia, I think it is called, an insect which attacks the bolls of the cotton. This necessitated the crop being sprayed some 16 times. I understand from the Department of Agriculture in Perth that this year there has been complete coverage and that the Department has been completely successful in holding the insect pests at bay. This is the second year of operation. I have no doubt that the scientists attached to the Department of Agriculture and the C.S.I.R.O. will produce an insecticide which will control any pests that are likely to attack the cotton crops in this area.

We also have problems in the south with insect pests. They are not always overcome in the first year, but I have yet to learn of a crop which has been attacked by insects in its first year and has not been saved by the C.S.I.R.O. in the second or third years because it has been able to beat the pest completely. These crops can be protected.

It is interesting to know that the crop at present being grown on the Ord, after one year of trial, is being sprayed effectively and that there have been no problems with insects.

Senator Ormonde - Are those insects in New South Wales cotton as well?

Senator SCOTT - No, I think this is only a tropical insect which does not attack crops in New South Wales. This particular insect problem has been overcome and no doubt the Government will take that into consideration when making a decision next year.

The Government also wants to consider the effect on tropical soils of intensive production for a number of years. We have to learn what is happening to the black soil plains in the irrigation area after they have received an annual average rainfall of about 30 ins. plus 2 or 3 acre feet of water annually. It is thought that this may cause soil erosion and bogging down through insufficient air being able to get into the soil because of the continuous application of water. These things will have to be worked out, but I understand from the Department in Western Australia that the State Government is not at all worried about this aspect because at the research station similar types of land have been irrigated and have received between 2i and 3 acre feet of water a year without causing a great deal of concern to the scientists. This is a big project. It is a project in which everyone in Australia is interested. A survey of people in Western Australia disclosed that they believe that the most urgent item for the Commonwealth Government's consideration is the Ord River scheme. This survey was taken only a few months ago.

I conclude by saying that I was rather disappointed at the Government's decision, but realising that it is responsible for the taxpayers' purse, realising that it has to be careful, believing that the advice that it will receive over the next 12 months will satisfy its most earnest inquiries and having regard to the information that I have to hand now relating to the productivity of the area, I am confident that when the Government makes its next approach to this matter it will provide the financial assistance necessary for the construction of a project which is vital to the development of Northern Australia.

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