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Tuesday, 14 October 2008
Page: 8965


Mr GIBBONS (3:01 PM) —My question is directed to the Minister for Agriculture, Fisheries and Forestry. How are the current economic circumstances affecting our farmers and how will rural and regional Australians benefit from the government’s superb Economic Security Strategy?


Mr BURKE (Minister for Agriculture, Fisheries and Forestry) —I thank the member for Bendigo for his question. Because the global financial conditions have included a sharp depreciation in the Australian dollar, there has been a presumption made by many that the current circumstances are great for Australia’s farmers. It is important to put on the record of the House that that view is just plain wrong. It is true that, to the extent that exporting is part of the equation, the depreciation in the dollar provides some opportunities there, but it is a lot more complex than that. There is welcome relief, for example, for some industries which have been under pressure for some time, in particular the pig meat industry. It is also militating against some of the falling commodity prices in soft commodities, particularly wheat. There are a number of reasons for the drop in those soft commodity prices. They are not only related to changes in demand; also, some of the players who have been part of global speculation in those soft commodities, such as Lehman Brothers, by exiting the market have therefore changed the demand in the futures market on wheat as well.

Sales are only one part of the equation. Most farm inputs are also themselves imported. There has been a good deal of discussion in this House for some time over the cost of chemicals, fertiliser and fuel. The fall in the dollar means that, where there has been a minor easing in some of those areas, that is not being felt by Australia’s farmers because the dollar is going down at the same time. Where there might have been an easing on the global price, our capacity to purchase those global farm inputs is itself diminished as well.

Conditions will remain tough for Australia’s farmers for some time. The most important requirement always is rain. We know how difficult that has been to come by in some parts of the country. There are also many pressures, as I have described, which come from being part of an international market. Anything which stimulates demand and activity in the economy helps farmers with their sales throughout the nation and importantly helps to sustain rural cities and towns. Just as the impacts of the global financial crisis do not stop at the borders of capital cities, so too the government’s Economic Security Strategy reaches every part of rural and regional Australia. It is important for the impact on rural and regional Australia that the payments to pensioners and carers will be felt in those towns. It is also important to note that so many farm families are income poor but asset rich. That is why the payment of $1,000 for eligible children being linked to eligibility for family tax benefit part A is so important—that the asset rich part of the equation will not preclude farm families from being otherwise eligible. These measures combine to help farmers during what is, for many, a very difficult time. And it is likely to continue to be so, but they do provide a helping hand.