Wilson Tuckey (O'Connor, Liberal Party) Share this | Hansard source

I take some pleasure in following the member for Mallee. He and I represent the two electorates throughout Australia that have the largest number of grain-growing properties, on ABS figures. I beat him by about 500, I might add, at 4,000-odd. He, of course, has 3,000-odd. We have a genuine interest. All agricultural sectors are covered by the Farm Household Support Amendment Bill 2007. The reality is that rain, as it applies to the grain-growing sector, is the gamble that growers take when they spend on average $120 a hectare to put a crop in the ground. They hope that the land will get enough rain to provide an economic return.

These measures are aimed at bringing the same arrangements for household support to agriculturally dependent small businesses as would be available to farmers in the same region, and that, of course, must be endorsed. Such businesses are totally necessary for a farming region to operate. They make huge contributions socially. The great tragedy of modern agriculture would have to be the number of closed-up shops and premises that we unfortunately see—in towns, I might add, that were created to be convenient to people with horse-and-cart transport. I totally endorse this legislation, which has been well covered by previous speakers, but I want to draw the House’s attention to some other aspects of the farming economy that could in many cases remove the need for this sort of financial assistance from the taxpayer and leave the farming community and their small business entities living in comfort and with pride.

I have already approached the opposition desk to see if they will grant me leave to incorporate the graph I have here in Hansard as part of my speech. It is unexceptional as far as politics goes. For you, Mr Deputy Speaker Haase, as another member of this House with an extreme and genuine interest in the welfare of farmers and wheat growers, I will briefly speak to this graph. The graph shows movements in world wheat prices over the period January 2006 to March 2007. The graph indicates a peak in about October, when the 2005-07 crop was being put in the ground, where world wheat prices got above $A330 a tonne.

The other lines on the graph demonstrate the amount of money that is being paid to growers for their deliveries to the 2005-06 pool. Remember that that pool was of the order of about 17 million tonnes. It was a good crop for Australia. The difference is that, at the point in time I mentioned and throughout the period of this rapid growth in world prices for grain and during the time that AWB went into the silos in my electorate and exported grain—and, Mr Deputy Speaker, you would still find certain silos in your electorate that are not filled with 2006-07 grain; they are filled with 2005-06 grain—that grain was taken out of those silos and exported into a market which is now running internationally at about $300 a tonne, and the payment going to the growers is still $190 a tonne, as this graph demonstrates. The EPR, as it is known—the estimated pool return—of the entire 2005-06 crop has not deviated over the period I just mentioned. But worse: there is $1,000 million yet to be paid.

Everybody who has an association with wheat growing knows that a wheat grower lives about 18 months behind on revenue. The proceeds of the 2006-07 crop for many was nil, but for certain areas—including some in your electorate, Mr Deputy Speaker—in Western Australia it was quite a good year for rain. It was built more on thunderstorms than on general rainfall. In other areas, known as safe areas—again in your electorate, Mr Deputy Speaker—the farmers never got their tractors out of the shed. So the price of the 2006-07 crop is of less relevance. But at the very time when the world market reached $A330 a tonne, AWB announced its EPR for the 2006-07 season at $A250 per tonne, and since then they have reduced it to $A237 while the market stays at about $300. Furthermore, on 15 March, Reuters reported that AWB was buying wheat in Pakistan for $A280 a tonne. So if you are a Pakistani grower you can get $A280 from AWB, but if you have been forcibly required to deliver your wheat into an AWB pool, as the legislation provides at the moment, perhaps you will get $A237. That is only an estimate.

Might I add, while AWB has been paying out on the 2005-06 pool at $190 a tonne, it has paid itself $11 million in performance bonuses. That is presumably what AWB executives get when they outperform the market, which they are lagging behind by over $100 a tonne. You can measure that in billions. You might ask: how many farming small businesses in regions that grew wheat in the year before last—and under normal arrangements, that would be getting paid for at this time—would need this assistance? The AWB has said that it will pay $1,000 million ‘after 30 June’. It has not even given a definite date. With a definite time frame, how much easier would it be for farmers to finance their current cropping program in what, according to ABARE and the Bureau of Meteorology, could be quite a good season? I seek leave to have this document incorporated in Hansard. I believe there is no objection.

Leave granted.

The graph read as follows—

I thank the opposition for that. Having made those points, the House has taken an interim measure to try and correct that arrangement. In fact, I thought the House did not do as well as it could have in the implementation, but I will not waste time on that today.

The House has to confront a situation where, through bad management or fraud, the licensed monopolist has dropped so far behind the market. The AWB can give any excuse it likes, but the fact is that roughly $100 a tonne for at least half of the 2005-06 crop should have gone into farmers’ pockets and through their bank accounts to the small business people we are attempting to assist with taxpayers’ money through this bill. Of course, the situation confronting us for 2005-06 wheat is quite different.

It is worth commenting on other aspects of this circumstance. It is my view that grain growers have gone as far as they can in achieving economies on their properties to keep their businesses viable. It is an interesting if irrelevant statistic that every time someone quotes what great-grandpa got for wheat from multiple exporters in the Great Depression, that price is typically quoted at 1s 6d a bushel on farm. That equates to about $170 a tonne today. On average, very few growers have netted that amount in recent years. If one looks at the price of 4s a bushel that was paid to growers before the Depression, one finds that that equates to $500 a tonne today. So one can see the very low price that is available to wheat growers today relative to what was paid in years gone by. They have stayed in business because of the efficiencies they have achieved through agricultural science, through the availability of very large machinery and through single-till agriculture, where instead of going over the land three times they now go over it once.

The reality is that farmers can get a crop in the ground in some parts of my electorate at the rate of one acre a minute, and frequently they dry seed it and wait for rain. What they achieve by doing that, in my view, is about a two-inch increase in the rainfall of any season, effectively, because those two inches that can now contribute to growth were previously lost in getting the crop in the ground. They used to wait for rain to plough, wait for rain to scarify and wait for further rain with their little combines loaded with sacks of fertiliser and wheat to put a crop in the ground. Of course, those guys who got 1s 6d a bushel actually used horses to do it. When you take all of those things into account, the massive efficiency on farms has come substantially from the use of very large machinery. There has been no improvement whatsoever in the cost of freight, handling and marketing—in fact, there has been exploitation. When one burrows into the accounts of AWB Ltd and its subsidiary, AWBI, one finds that AWB shareholders got $48 million in one year for the freighting business of the Geneva desk of AWB Ltd, but AWBI, the pooling company, absorbed $20 million of demurrage costs. One wonders about the management of this and the costs that growers are absorbing through bad management. As I said, the House is going to have to deal with that. It is going to have to deal with the corruption and the bad mistakes—

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