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

Tonight I would like to bring to the attention of the House the worsening of the drought in South Australia. For once I will not be talking about the Murray but about the devastating effects the drought is having on the cropping regions of South Australia. Some of those cropping regions have received less than 50 per cent of their annual rainfall as we approach the last few weeks of the year. This is an unpredictable, almost unimaginable state of affairs. For the third year in a row—and for some, five years out of seven—we have seen the season totally fail. Certainly on my farm that is the case.

There is one shining light in this, in that modern farming methods have assured us that we have not seen the dust bowls of the past—the forties, the sixties and the eighties—when much of our fertile topsoils blew away. But what is happening is that the good long-term operators in the industry are under serious threat. Good operators that have adopted modern farming practices—no till, satellite guidance, night spraying, variable rate seeding technology, integrated systems management and advanced marketing skills—are under severe pressure. These are just the people we cannot afford to lose out of our communities and out of our industries. But the pressure keeps building—drought, record prices for fuel, fertiliser and chemicals, shortages of labour and certainly a shortage of money to pay labour.

The South Australian Farmers Federation President, Peter White, says that this is the most expensive crop that we have ever grown, and it has all gone wrong at the same time. Just 2½ months ago at the end of August the cropping prospects in South Australia looked good. Since then we have had virtually no rainfall across the whole region. Mr White said that the plight facing farmers was the worst in close to 80 years—since the last depression. Many operators were last year given finance on the premise that it would be their last year farming unless there was a reasonable production year. Already at least one major banking institution has issued a round of foreclosure notices. It makes you wonder what is to come. The dilemma for all is here. The banks may not have credit available or be willing to give credit in the new financial times that we will find ourselves in, in the coming 12 months, but banks need production. The only way they can get their money back on these farms, the money that they have lent, is if somebody grows a crop there—and they need farmers to grow the crops. So we just do not know where all this is going to end. Have the banks got the energy? Do the banks have provision to refund these farmers again or are they between a rock and a hard place where they cannot go as well?

The mental state of farmers and rural businessmen is as fragile as I have ever seen. I say of my friends and colleagues that I farm with that if they are not financially exhausted, and many of them are, they certainly are mentally exhausted. Exceptional circumstances is one of the only things keeping some of them on their farms. But the EC package needs reform. Farmers have been encouraged to invest off-farm to diversify their business so they can withstand these hard times. The current EC guidelines actually encourage people to get rid of those profit-making parts of the enterprise so they can qualify for the funding to keep them on their farms. There are a number of problems with exit grants. The take-up has been very low and there are problems there that need to be addressed.

We ignore rural Australia at our peril. It is still a major employer; it is still a major exporter for Australia. Some may begrudge the support that rural Australia receives but it pales into insignificance when compared with the plan announced today to support the car industry. This industry is vitally important to Australia’s future. It has been the backbone of our past. The recommendations of the drought task force were delivered last time we were here in Canberra. Now, we need action. But the big fundamental question facing Australia is: do we want a rural Australia? And that is the question that will need to be answered in this next 12 months.

Question agreed to.