Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

Good. We hope that your good luck continues. To illustrate the input costs and how they have gone up, a local fertiliser distributor provided me with the most recent figures on some of the key input costs for growers. Nitrogen, or urea as it is commonly known, which is a crucial fertiliser and in Australian soils is absolutely essential, has risen from $519 a tonne in March 2007 to $598 a tonne this year, with prices expected to hover around $1,146 a tonne in March 2009. Similarly, nitrogen phosphate, or DAP as it is commonly known, went from $594 a tonne in March 2007 to $1,236 a tonne in March of this year. It is anticipated to rise to $1,696 a tonne by March 2009. Potassium, or muriate of potash, is currently $736 a tonne. That is $272 a tonne more than in the year before but an astonishing $491 a tonne less than the predicted March 2009 price.

Price rises are not limited to fertiliser. Chemical costs have also risen sharply. Figures supplied by a Landmark store in my electorate illustrate that glyphosate, a weedkiller, doubled in price over the year. The price for 450 active glyphosate in March last year was $4.75 a litre and rose to $6.25 litres in August. It reached $10 a litre in January this year and peaked at $13.50 a couple of months ago. It can be purchased now for $12.50 a litre. I am sure that those figures will not be lost on you, Deputy Speaker Schultz.

After years of drought and in some cases low market prices, farm profit margins cannot take further hammerings. Return rates are slim. Sometimes they are as little as 3.5 per cent or below. Farming has become a bigger gamble than ever. For example, a Pearce farmer made their 2009 estimated cash flow calculations available to me. Based on a 5,000 hectare wheat belt cropping and wool property, my constituent calculated a $40.84 profit per hectare, or $204,200 per annum. This number is, however, without the other farm expenses, including personal costs, taxation and repayments, as well as capital purchases. Assuming the season is good, keeping their debt repayments to a minimum, the farm is expected to lose $36.06 a hectare. That is right: it will have a loss, and the loss equates to about $180,300 for the coming year.

While this is only one example, the constant high farm input costs, increasing farm financial risk, is taking its toll. I am told that primary producers need between an eight and a 10 per cent return on capital to remain sustainable, so 3.5 to 3.7 just does not cut it. To get over the stumbling blocks, some farmers have indicated that they plan to decrease animal and plant stocks and make cuts to employees and delay yet again the improvement of soils for sustainable farming into the future. These are not really very satisfactory solutions; they are not solutions in the long run for an industry which feeds our country. Nevertheless, farmers are can-do people and Australian producers have become some of the most efficient in the world. Long ago, government subsidies, still large and prevalent in the competing economies of North America and Europe, ceased to be available to the Australian farmer.

While some may be of the view that if it is not a profitable enterprise then get out, I do not share that view. Being able to produce food is essential to Australia’s food security and in ensuring that Australian consumers have access to locally produced, high-quality, uncontaminated food. It is well worth examining some of the ways that government can provide policy that assists farmers through difficult times and assists with the continuity of food supply, because it is considered a matter of national priority.

Just talking to some farmers in Pearce, it is clear that they do have some constructive ideas on how government can help the agricultural sector. These include—and it is not an inclusive list but just to give some ideas because I am out of time—that the government support alternative or natural phosphate products or fertiliser subsidies; that they implement multiperil crop insurance; and that they accelerate machinery depreciation schedules and make it a flat rate across the board, encouraging greater farmer investment in new machinery. Our farming community contracts will be heavily reliant on imports which will be deeply concerning both in terms of national security and in terms of all Australians having the option to buy quality, reliable produce. (Time expired)

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