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Thursday, 7 October 1971
Page: 2066

Mr KELLY (Wakefield) - During each period of depression in the agricultural scene we will find that the farming community is inclined to get up and run frantically after every hare that is put up, particularly marketing hares. We chase them with a great deal of enthusiasm but we very seldom know what to do when we catch them. I thought it would do us good to measure the problems and the costs of government interest in agricultural marketing. I repeat that it is usually regarded as the panacea by so many people and it is proper that we should put it under careful examination. The first thing one has to do with a marketing scheme is make an estimate of demand, in other words, find out how much of a certain item should be produced. In the end this judgment will be made by people, probably by the dedicated and capable people in the civil service. But I want to sound one warning - not to them; they would know - to the community as a whole and to this Parliament in particular that any civil servant who has the ability to correctly assess the demand situation for any product is not for long a civil servant. He is shortly sitting in the south of France with his feet in a bucket of champagne. We ought to remember as a fundamental truth that to make an estimate is not easy and it has to be done by humans. It will frequently be wrong just because they are human.

But having made an estimate of demand one then has to tailor supply to demand and this is a practical and sensible way of tackling the agricultural marketing problem. We do have problems in this area. One of them happens to be the weather. Australian weather is not easily foretold, nor is it easily controlled. The second problem we have is the Constitution. Honourable members can sling off at it if they like but we have a Constitution that makes it very difficult to have a marketing system for agricultural produce that operates across Australia. Some may say: We will change it'. This is an exercise a lot of people have engaged in but few have brought off. But as we have the Constitution, let us admit that we have this problem on our plate.

At present we have a grey market in wheat. Produce can be taken across State borders and sold to whom one likes. There is also a black market, or there will be a black market, and the sooner we recognise the fundamental facts, the better. Many of the younger members in the House would not remember the black market. I have told the story many times, but I will tell it again, of the 2 doctors in a hotel who were exchanging experiences about their practices. One said: 'You know, I have got 4 cases of meningitis in my district' and a chap behind him tapped him on the shoulder and said: 'Look, I'll take the lot.' There is black marketing and to pretend that there is not a black market problem is to ignore the fundamental facts of life. Another problem which arises as the result of a marketing scheme is that when mistakes are made, they are big mistakes, and there are no countervailing mistakes to balance them. I am not slinging off at the people who have made mistakes; I have made so many myself. My neighbour watches me, and when I buy cattle, he sells cattle. My mistakes cancel out his mistakes. It is important to realise that in a big marketing scheme run by the Government, the inevitable mistakes will all be one way. Australia's primary industries are in a desperately serious situation and this should be recognised as a problem.

Other problems arise in the establishment of this type of scheme. When there is a system of subsidies or of market manipulation, there is frequently the power to control production. Production is limited by legislation or by price reduction and by no other means. If it is done by legislation constitutional problems are encountered. People say this system works with sugar and wheat. It has worked fairly well in these industries. However, 2 important facts must be considered. Firstly, there is an element of Government subvention in both of these industries and, secondly, they have international marketing arrangements - an international grains arrangement and an international sugar . scheme. When there is a system of marketing, people say: 'Well, we will limit the market. We will not put the product on to the market'. People say that we can ' control the production of wool but What happens if we do not have an international arrangement? The Argentinians and others move into our markets. Limitation of markets will work only if there are international agreements.

What ure the problems we , face when government controls agriculture? Firstly, it is not known whether a subsidy should go to the big producers or to the small producers. Actually the big producers are subsidised because most of the money goes to them. I have told the story in the House before of an English friend of mine who frequently visits me, and when 'he shows me the amount of money in the subsidy column of his books, I say to him: 'Il cannot justify that amount of help from the Government' and he says: 'Look, Bert, as long as there are enough poor struggling farmers, I shall be all right'. Consequently it is said that we should not subsidise the big producers but should subsidise the small ones. What a silly lot of nonsense this is. In many cases, the only way a primary producer can survive is to become bigger but, by subsidising the small producer, the Government would be stepping in and paying producers to become smaller. There must be some economic sense to government interference: We have become confused and caught up in our own eloquence. We have been talking for so long about closer settlement that we think it is a good thing but, if we look at our past performance we can see that much of our country has been destroyed physically and the financial position of the farmers has been destroyed by the very thing about which we have been talking so eloquently, namely, closer settlement. These are the kind of problems we face.

Why do we not do better than we do? We are all well meaning people. One could not find better meaning people than the Minister for Trade and Industry (Mr Anthony) and the honourable member for Dawson (Dr Patterson). Why is it that farming is so frequently damaged - I will not say by interference' although other people would - by government interest? We become confused about costs of production. We have been talking about this for years. It is the golden calf of worship and yet in our hearts we all know that this is a silly system. We know that there cannot bs a cost of production for a product across an industry because the cost of land component must be included. This is a one way ratchet which jacks up the price of land. The cost of production of wheat in theory is $1.72 a bushel. Anybody who is any good at growing wheat knows that this is utter nonsense. These kind of things happen. Why do we not do better? We should ask ourselves this question. I will not say that there is no room for improvement in marketing methods and that there is no place in this area for government. It is important that we realise the problems which exist before we run after every marketing hare. There is a temptation and 1 am afraid some of us are inclined to bring the hares into this chamber and try to catch them here. As a Parliament, we should be giving a great deal of thought to our agricultural problems, but let us not delude ourselves that the answers are to be easily found in some grandiose government scheme.

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