Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

It is fascinating to watch the Labor Party debate a subject they know nothing about. The last two speakers—the Minister for Trade and the member for Capricornia—have collectively mentioned the word ‘food’ only twice. I might just repeat what the matter of public importance is: ‘The impact of carbon tax on the Australian food industry’. While the member for Capricornia mentioned the word ‘food’ twice, I do not think I heard the word ‘agriculture’ come out of either of their mouths through the whole debate. As I said, that is what you get when people talk about something they know nothing about. One of the great issues for Australia and one of the great challenges for our farmers is that the party that is ruling Australia at the moment knows nothing at all about agriculture, its importance to the nation and its importance to the world as the industry that will feed a population which will double by 2050.

One thing I do welcome from the government is its recent announcements that it has decided to exclude agriculture—that was the one time they mentioned agriculture—from the carbon tax arrangements. I concur with this. I must say that it defies common sense that people do not to understand that agriculture is a closed circuit when it comes to carbon. Basically, when it rains, plants grow; plants take carbon out of the atmosphere; cows come along and eat the grass and it turns into grain; we ship the grain off to people to eat; those people eat the grain; it turns back into carbon, which turns into energy and heat, and some of it turns into some pretty unmentionable product that goes down the toilet; and the cycle begins again. It is a cycle of about two years.

I welcome the fact that the government say they are going to leave agriculture out of the picture. The only stumbling block is that they say a lot of things. It was only 10 months ago that the now Prime Minister said she believed in an ETS. Two months later she did not believe in an ETS. Leading up to the election we were never going to have a carbon tax, but here we are six months later and we have a carbon tax. So I hope they stick to their word on agriculture at least. But a carbon tax only makes sense—and I am sure that those on the other side would concur with this—if it alters people’s behaviour. That is why an understanding of agriculture is so important. Agriculture is worth around $45 billion a year to the Australian economy and it is largely an export industry. It also feeds our nation, and I hope to get back to that later in this MPI.

Let us have a look at the export industry. Anyone who understands agriculture knows that farmers are price takers: when we put our commodity on the market it does not really matter what cost we put on it in Australia; we will take what the market has to give us. If someone is producing that commodity somewhere else in the world cheaper, we have to come down and meet that market point.

On the point about changing behaviour, if we put up the price of fuel—and Australians use about two billion litres of fuel a year in production—by around 6½c a litre, farmers have no choice: they will still use the same amount of fuel. Already we are the most modern and efficient industry in the world. We use the best tractors in the world with the latest motors. The latest harvesters cost in the range of $800,000. It is not as if this is old technology. We are using satellite guidance. Our farmers have reduced farming to a one-pass operation. We use the least possible fuel, for good reason: it costs a fortune. One of the things we try to avoid using on farms is fuel. We could double the price of fuel and the net result would be the same: if you want food—and the world needs food—you are going to have to burn the same litres to get the product.

One of our great advances in farming is no-till farming. It and the use of chemicals has rescued Australian soils from degradation. It gets the tractors out of the paddock. We use much lighter implements. We go out and we spray the weeds. We do not work the earth anymore. We do not push it down the rivers. That is what modern farming is about. It is a wonder to go onto a modern farm, Mr Deputy Speaker, because you are looking at some of the most technologically advanced industries in the world. There is this picture in urban Australia, which we must repaint, that farmers are wandering around with the seats out of their pants and a hayseed hanging out the back of their hats. It is not like that at all. These are very modern, technologically advanced industries, and they have worked out how to cut their inputs to a minimum.

One of the biggest inputs for any farmer is the fertiliser bill . Not every farm size in Australia is the same, so I generalise, but I will talk about farmers that come from my part of the world. Typically they will be spending $100,000 a year on fertiliser. Fertiliser is a little bit like aluminium. We talk about aluminium being ‘solid electricity’. Fertiliser is not quite as bad but my understanding is that it is around 30 to 40 per cent responsive to the price of the energy that goes into it. So if we raise the price of energy, the price of fertilisers will inevitably go up by a considerable amount. You cannot farm without fertiliser. It is already the most expensive thing on our agenda. We would be farming with as little fertiliser as we possibly can. Artificially pumping up the price of fertiliser will not change behaviour and if it does not change behaviour then the carbon tax will not do what the government says it will do.

I said I would try to return to domestic food production, because it is very important. There is not an enormous amount of domestic food production in my electorate—after, of course, the production of meat. One of the great concerns of not only Australian farmers but the community at large is that they see an increasing amount of foodstuffs coming into Australia from overseas. We are feeling fearful for our future and our ability to make sure that Australia is self-sufficient in food. Sure, we will always have surpluses of wheat, we will always have too much wool and of course we will have too much beef. But in many of the other product lines we are beginning to wonder. For instance, one product that has been discussed here today and quite a lot recently is milk. But if you walk down the supermarket aisle you are exposed to a disturbing truth: there is an increasing amount of food coming in from overseas.

Labouring extra costs onto Australian farmers, Australian food, Australian agriculture—those things that those people on the other side of House do not want to talk about—will not increase the price of those things coming in from overseas. It will just make them more competitive with our farmers. We have already lost something like 17 per cent of the Australian farming workforce between 1996 and 2006. We are waiting for the results of the latest census, but I do not expect that figure to have changed too much. Seventeen per cent of our workforce, or 54,000 people, have been forced out of agriculture in those 10 years. It is not because they all got rich or retired and decided to head off to Bali to live for the rest of their lives; these people have been forced out because of the tough economic times and the tough realities of competing in world markets.

People talk about droughts and floods and all the rest of it. I care about that stuff and it is a reality, but at the end of the day it is the strength of the business model that will support Australian agriculture. If those businesses cannot make money, we are out of the show. In a world that is going to double its population by 2050, where we are losing prime urban land not just in Australia but all around the world, and where there is land degradation and we are losing water supplies, the challenge is out to agriculture to grow more than it has ever done before. What we are doing at the moment with his carbon tax is disadvantaging Australian farmers with the rest of the world and threatening to drive them to the wall. The margins in farming are infinitesimal. A farmer is lucky if he is making three to four per cent on capital a year. Who else would invest in an industry like that? If this government throws another cost onto them, that margin disappears. (Time expired)

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