John Anderson (Gwydir, National Party) Share this | Hansard source

I appreciate the opportunity to speak in support of this measure by the government, the Farm Household Support Amendment Bill 2007, and welcome the chance it brings to make a few general observations that are perhaps pertinent in the current dreadful drought circumstances confronting so much of rural and regional Australia. I say at the outset that I am thankful for the support that the broader community seems willing to extend to our farm sector.

Having said that, it should be of deep concern to us all that there is a relatively low level of understanding now of what is involved in producing the food and the fibre upon which we are all ultimately dependent. There are only a little over 100,000 farm units in Australia today, and many of those are hobby farms. The days when it was more or less a given that, if you were not on the land, you had an aunt, uncle, cousin or a good friend who was and you visited a farm regularly are long gone. For most Australians their experience of life on a daily basis involves very little consciousness of, and very little opportunity to interact with, the farm sector and yet we are all totally dependent upon that sector for the provision of the essentials of life.

In that context, there are some general points that need to be made that are of quite some importance. The first is that the Australian farm sector is extraordinarily efficient. It is not a sunset industry; it is not low-tech, it is not lacking in sophistication and it is not lacking in managerial expertise. It is the case, as it is in any other profession, that some farmers are more efficient or more capable than others, but the sector is world leading—I have no doubt about that at all—when considered as a whole. What needs to arise out of that is a broad awareness that this sector is not somehow inefficient, not somehow to be pitied or somehow to be seen as a sector that is dependent upon the goodwill and the largesse of the broader community.

Its current circumstances are very difficult indeed as a result not simply of the drought but of the fact that Australian farmers do not operate in a genuine marketplace. The international marketplace is highly distorted by the production subsidies and export-distorting arrangements engaged in by much of the rest of the world—Europeans, Americans and Asians—to the detriment of farmers in the Third World and farmers in Australia. The World Bank, surely an authority if ever there was one to be found on these sorts of matters, estimated a couple of years ago that if wide-ranging and real trade reform were engaged in globally, Australian farmers would receive an income lift of some $31 billion annually.

That is an important point to make because it highlights the fact that, when tough times come, care of a drought, Australian farmers are much more economically vulnerable than they would otherwise be. Their incomes are hit hard by those international practices. Not only is price injury imported in the sort of global trading environment that we operate in now but you cannot ask more on domestic markets than you can hope to extract out of export markets, allowing for freight differences, because, if food processors and so forth cannot purchase what they need at acceptable rates from Australian farmers, they will simply bring it in from overseas.

The reality is that, dependent as we are on export markets for some 70 per cent of our product, we are takers of those artificially depressed prices anyway. I would go so far as to argue that for most farm products, most of the time, the rate of return is below the genuine cost of production, if you allow properly for externalities such as the impact on farm environments. I think that gives rise to a proposition that is entirely reasonable, and it is this. The international trading practices that so many other countries engage in are immoral, not just in their impact on the Third World or on countries like Australia but also in the sense that, in artificially depressing farmers’ prices to the point where, as I said a moment ago, you could argue that they are often below the true cost of production, it makes it very difficult for farmers to do as I believe they instinctively want to do: maximise the management and stewardship of their land, water and natural resources.

Arising out of that is another important point that we ought to note on the way through—that is, in most ages and in most circumstances a drought of this order would have resulted in immense suffering, not just for farmers but for the entire community. A drought that has dragged on, year in year out, would have meant for most societies in the past—and still means today for many societies—the real prospect of starvation and massive personal suffering. The reason why it does not mean that in Australia is, as much as anything else, that in ordinary circumstances our farmers produce four or five times what we can consume here at home. We produce enough food for somewhere between 80 million and 100 million people and we have a population of just 20 million.

The surpluses are so vast that, while the drought, as severe as it is, has resulted in us having less to export, it has not impacted on our capacity to supply local supermarkets on which so many of us so heavily depend in this age when food seems to be just another consumer item. Not many cultures have the luxury of being able to see food as simply another consumer item. Most cultures have recognised that farming occupies a unique and very important place in the fabric of their communities. That applies to much of Europe, for example, because they have known what it is like to go without. We have not known what it is like to go without, and God forbid that we should ever be in circumstances where we do have to go without. But I think it is important to understand just how fortunate we are that we are so efficient in this country in agricultural terms, that we have such large surpluses and that while a drought may have an impact on supplies globally it does not have a negative impact in any serious way on consumers in this country. Certainly we get headlines that warn of the price of vegetables going up or the price of meat going up a little bit, and we talk about a little bit coming off national economic growth, but this is inconsequential in comparison to the effects that a drought of this severity would normally have if we did not have the sophisticated, very capable, very efficient and very productive farm sector that we benefit from in this country.

I often hear it said in this place, understandably, that farming is a business and must be treated as a business by people on the land. While farmers must accept that their occupation is a business, the rest of the community must accept that it is not simply a business. I am a farmer myself. From an economic perspective, I am mad to be a farmer. There is no money in it, relative to the sort of money you can make in a prosperous society with other investments. That is the reality of it most of the time. It is a business in which it is very hard to make a decent return on your investments. You dream and hope about having a year when you will get a big surge in income and it will all seem worth while, but basically if it were simply a business no-one would do it. Most farmers are deeply committed to their business as a lifestyle and in terms of the opportunities it gives them to exercise careful stewardship over their land and their resources. It is very easy in urban Australia to paint farmers as people who do not care about the environment, but that is just wrong. Most farmers are deeply committed to their land and water resources.

On that front, I would like to make a couple of comments about the severity of this drought and how it is masking some of the reforms, particularly in water, that have been undertaken to this point in time. In terms of the severity of the drought, the first two rural lands protection boards that went into exceptional circumstances last time around were Bourke and Brewarrina, in my own shire. Most of the farmers and graziers in those two shires have essentially endured seven or eight years of appalling drought. With the collapse of the reserve price scheme for wool, graziers have been suffering since about 1989 from very low wool prices as well.

The suffering has been immense and it remains something that is hard to describe in this place. I can only salute the personal courage of so many people who battle it out, day in, day out, under unrelenting clear skies. Perhaps even worse, in recent times, storm clouds have been brewing up and passing over without dropping anything, or if there has been rain it has been of little use. I am not sure how some of those people have managed to keep going and keep their spirits up. Some have not; some have found it too much. We have all heard of some of the sad family circumstances that have resulted from the sheer pressure that these circumstances have brought about.

The flow-on impact to the local communities has been immense—and that is what is being recognised in the measure that is now before the House. In Wee Waa, where the Australian cotton industry started in the 1960s, local business turnover is down by something like 47 per cent. In Bourke, also in my electorate, with a population of 4,000 in the township itself, where some 700 jobs are dependent on irrigation, there has not been a cotton crop of any substance for years and there is little prospect of that turning around. So there is economic devastation.

I mentioned a moment ago that we see headlines about the drought knocking a tiny little bit off national growth. But there is no growth in communities like those, and while it is not a recession in economic terms it is a depression. Our fellow Australians, through no fault of their own, are living in circumstances where their local economy is in depression. While I am very grateful that the broader Australian community is prepared to support those people, and I am sure it is, I think it is important to recognise just how devastating the impact on those people is.

I also mentioned a moment ago that I wanted to touch on the fact that this drought is masking some of the other activities that have been undertaken. The water issue is of course very much at the forefront of people’s minds in this day and age because it is now affecting the cities. However, the impact can be far more devastating on people who are utterly dependent upon water for their livelihoods. Of course, farmers are not the end users of water. I am still astonished to sometimes see the accusation aimed at the farm sector that they ‘waste’ water without a recognition on the part of the people who make the claim that people who eat, people who wear clothes and people who have timber in their houses are in fact the end users of that water. That is my first point.

The second point that arises is this. It is a simple fact that the farm sector is further ahead in relative terms in the efficient use of water than our major cities are. The farm sector is investing heavily in the more efficient use of water. If you doubt my words, consider the cotton industry. It alone is set to invest huge sums of money in further substantial water efficiency gains over the next few years. Over the last decade the rice industry has halved the amount of water it uses per unit of production. I think it is now the most efficient user of water in the rice sector anywhere in the world, so real progress has been made.

But there is another aspect of this that needs to be nailed. We hear commentary to the effect that, after years of talk, no water—not another drop, not another cupful—has been returned to the river systems, in particular the Murray. That is simply not right. That simply does not reflect the facts. There have been very substantial and often involuntary cutbacks for water users in the Murray-Darling Basin in recent years. The reason why that has not shown up in increased flows into the rivers is that there are not any flows into the rivers. The irrigators have not got any and, of course, the rivers are not flowing because it has not rained. But, when it does, the cutbacks that have been made to date by one way or another will be shown to have been very substantial and to have returned a lot of water to the environment.

That process, I would urge my city cousins to recognise, has been very painful for a lot of people in country areas. I know farm businesses that are now very unlikely to survive, not simply because of the drought but because they have lost entitlements to much—in some cases, the great majority—of their water. In most cases they have received little or no recompense. Some would ask, ‘Why should they?’ The reason is the great majority of them have done nothing wrong whatsoever. They have used licences given to them by state governments of all political persuasions—either in ignorance or through mismanagement, or both—over the decades and they have often come with conditions that have implied that if they do not use them they will lose them. Farmers have created a lot of wealth and jobs with that water. While they will wear the bulk of the pain in the cutbacks, I believe it is only fair and reasonable that the community, given that it has benefited from the wealth and jobs created, burden-share, if I can put it that way, and help the many farmers and country towns cope with the very real economic impact.

The broader community should be aware that the water issue will impact on the Indigenous community as much as anyone else. A lot of jobs will go missing—a lot already have gone—as a result of the water reforms. I do not argue with their necessity. It is just the opposite: I was the architect of the National Water Initiative, which acknowledged that there had to be clear pathways—but fair and just ones—for returning systems to sustainability. I would urge that the progress that has been made be recognised. It is the case that we have not yet seen the benefits. That is because it has not rained—but it will; it will rain again.

I am very optimistic about the future of agriculture. I am not a sceptic on greenhouse warming. It is undoubtedly happening, and we do not yet know what the climatic implications will be for Australia. It is obviously a result of natural changes as well as of some impacts, no doubt, of human activity, and we are right to engage ourselves in a serious debate now about how best to tackle it. But I do not believe that the current drought is a result of climate change. Indeed, even the met office seems to believe there is a very high chance of us now having a wet winter, and some experts are saying we may be in for a succession of wet winters. It will turn around.

I also believe that there will be great opportunities for farmers in the future. In closing, I would make this observation. I think a large part of that future will be derived from the fact that the world is waking up rapidly to the fact that plants can be a tremendous source of many things other than food and fibre: feedstocks for the chemical, plastics and medicines industries as well as a replacement for oil—not simply ethanol but more complex biofuels, multimolecular fuels that more approximate the energy that is provided by petrol. All of these sorts of things are on the drawing boards, and massive amounts of public and government money are going into them, not so much here but internationally. More needs to go into them here. I do think that this will result in a whole new farm sector: the production of crops for a variety of uses other than food and fibre. On that basis I conclude that this is a good measure and I hope it helps a large number of small businesses survive until there is a real turnaround.

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