Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

As a person who has her roots in rural New South Wales, and whose husband had his roots in rural New South Wales and attended Hurlstone Agriculture College, and as a person who now has extended family who live and farm within rural New South Wales, I can appreciate the importance of the legislation that we have before us today. The Rural Research and Development Legislation Amendment Bill 2013, the Primary Industries (Customs) Charges Amendment Bill 2013 and the Primary Industries (Excise) Levies Amendment Bill 2013 are very important pieces of legislation that will amend 10 acts in the agricultural portfolio to improve the efficiency, transparency and accountability of rural research and development corporations, which I will refer to as RDCs during the remaining part of my contribution.

The bill changes arrangements to allow statutory research and development corporations to undertake marketing activities provided that the relevant funding levy in respect of the corporation includes a marketing component. That marketing component is really important. The bill also changes the framework for selection committees to fill board positions for statutory RDCs. The two companion bills allow primary industry charges, fees or duties to be charged without the need to amend legislation. They will enable changes to the rates, charges, fees or duties, providing the industry services body generally, an RDC, or a body declared by the minister, recommends the changes to the minister. It allows primary industry levies to be charged by regulations provided by the industry services body or bodies declared by the minister. That may be a slight worry for me but I am prepared to accept it in relation to the bill as a whole.

I think it is important to note here—obviously the opposition is supporting this legislation—that versions of this bill were first introduced into the parliament on 19 June, prior to the election. The bills passed the House of Representatives but had not passed the Senate prior to the election being called. So the bills lapsed despite the fact that they had been passed by the House of Representatives.

I feel that this legislation is very significant to the primary sector of our economy. It is important that research is undertaken so that primary industry can keep at the forefront, compared to primary industry throughout the world. It is only through research that we can increase productivity and ensure crop security. This legislation will promote research and development—something that is needed not only in primary industry but in all industries.

In the shadow minister's area there is a very strong winemaking industry, and he knows the important role research plays in the ongoing development of that industry—as I think all members on this side of the parliament do. It is only through looking at new methods and new ways to produce within the primary industry that we can actually improve and ensure food security into the future.

The Rural Research and Development Legislation Amendment Bill updates and refines the Australian Research and Development Corporation in line with policy commitments made by the Labor government prior to the last election in the rural research and development policy that we made some years ago. So we really welcome the fact that the now government has picked up on work that has been done over a long time by Labor, because Labor recognises how important rural research is. That was shown in that rural research and development policy statement many years ago. In preparing that policy Labor met and consulted with stakeholders around Australia and took into account many submissions. Consultation continued in the process leading to the legislative amendments that we have before us today.

One thing that we believed strongly in when in government—and that we believe strongly in now—is that you must consult with industry stakeholders and people within various sectors of the community. It is only by extensive consultation that you can develop legislation that will meet the needs of all those stakeholders, that will meet the needs of the sector and that will meet the needs of our economy and lead to a growing and strong economy. In this particular case, primary industry plays a very big role. That is a very important aspect of this legislation.

The bill allows statutory RDCs to carry out marketing activities on behalf of their industry if a marketing levy is in place. Once again, it is all about the development of research and, once that research has developed, being able to market it and being able to develop strong industries. We on this side of the House see that that is a priority and we strongly encourage that to take place.

I also put before the House that there are no changes to levy rates or new levies in these amendments. The amendments will encourage private sector investment in rural R&D by extending to all RDCs the arrangements for government matching funding to voluntary contributions for eligible research and development. I think this is once again a very important component of the legislation. It is imperative that government encourage public sector investment. That means that the government must engage with industry, must engage with the private sector and must not put barriers in place to the private sector's investing in the primary industry sector.

I just look at some of the decisions that have been taken in recent times. The government has said that it is open for business, but if it is open for business it really needs to engage with the private sector and encourage that to invest—to invest particularly in R&D, which will lead to the growth of our private sector.

Statutory funding agreements for statutory RDCs are proposed to guide performance improvements and to increase transparency in the delivery of R&D services. I have always been very committed to ensuring that we have transparency in all areas of government. The consultation that took place under Labor led to the development of legislation that I believe is quite transparent, but in the implementation of that legislation we need to make sure that there is transparency. So it is important that funding agreements—and any agreements that are entered into—are very transparent. Funding agreements have been a flexible mechanism for providing government guidance and oversight to industry owned RDCs, and these amendments will extend the mechanism to statutory RDCs.

The bill changes the process for the selection of statutory RDC board directors to improve transparency and efficiency. Once again, this is very important—there needs to be transparency in the way appointments are made to boards. I would encourage the government to extend that transparency not only to RDC boards but to all boards. Appointments to boards should be based on merit and on the fact that people who are appointed to those boards are actually bringing something to the board that will be beneficial to the industry or the sector. It is imperative that these are not just places where your mates are installed. It is really important that we have boards that have directors who are of a high quality and that this is done in a very transparent way. The amendments promote due consideration of the diversity of that selection process, so once again the selection process, as well as being transparent, will encourage diversity. They aim to ensure that high-quality boards are in place for RDCs, and to reduce the time associated with securing them.

The bill proposes to allow the collection and matching of individual fishery industry levies, subject to a cap based on the gross value of production of that individual fishery. Once again, this is a very important aspect of this legislation. It allows specific fisheries to propose levies to invest in R&D for their industry and to undertake marketing in a similar way to other rural commodities. There has been considerable interest in the fishery industry, in ensuring its sustainability and that we have adequate fishing stocks. I see that investment in R&D in fisheries is very important to ensure the sustainability of that industry.

The burdensome requirements for ministerial approval of statutory RDCs' annual operating plans will be removed and some other minor technical matters will be addressed. The Primary Industries (Excise) Levies Amendment Bill 2013 removes the maximum levy rates for research and development and marketing levies on primary products. Once again, this is very important to encourage research and to encourage the growth of our primary sector. The Primary Industries (Customs) Charges Amendment Bill 2013, which is the other of the cognate bills, removes the maximum charge rates for R&D and marketing requirements. Numerical maximum levies and rates will be removed, and rates will be limited to no more than the levies recommended. The changes that will take place to the levies associated with this legislation will, I think, benefit the industry enormously.

In closing I would like to say that I support this legislation and that I emphasise the importance of research and development, and of primary industry and its sustainability into the future. So I recommend this legislation to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

This bill, the Rural Research and Development Legislation Amendment Bill 2013, amends eight acts in the Agriculture, Fisheries and Forestry portfolio to improve the efficiency, transparency and accountability of the rural research and development corporations. These were established under the Primary Industries and Energy Research and Development Act 1989 to provide research and development services or, as they are commonly known, research and extension services. They are vital to maintaining Australian primary producers as world-leading and ultracompetitive in international markets, particularly those markets where there is no level playing field for our domestic producers—the markets that are dominated by internal tariff and subsidy protections, the markets that Australian farmers have been competing in, or trying to compete in, for many years as well as competing in the Australian market against those same tariff- and subsidy-protected imports. In spite of a 50 per cent fall in agricultural terms of trade since 1960, Australian farmers have tripled their production and quadrupled the real gross value of their produce.

As one of those farmers myself, I cannot tell you how appalled I have been by the dreadful ignorance of the Labor Party's Paul Howes when he said, of this world-leading industry:

… ma and pa farming in Australia needs to end.

I have just outlined what type of industry it is. Yet these are the comments of the Labor-union party: 'Ma and pa farming in Australia needs to end'! This is, without any question, arrogant and ignorant and short-sighted. It displays no idea, no respect at all, and in fact a complete contempt for the people who feed Mr Howes every day of the week. Clearly, Mr Howes is, like those on the other side, a self-proclaimed expert in the field, and this also shows a complete contempt for rural and regional Australians and Australia, contempt for family farmers and contempt for small business people. That is what mum-and-dad farms are in Australia—small businesses. Clearly, though, according to Paul Howes and the unions, family farms and small businesses have no future; only corporates need apply. What an absolute indictment on Paul Howes and the unions! I am proud to speak for small farmers, for small businesses, for those who work day in and day out in the properties around this country. And I, unlike those on the other side, like to treat them with respect.

Research and development and technology have assisted farmers—the farmers who have to produce more with less. That is what R&D does. We are compelled to produce more with less: with less water, with less land and with less environmental impact. These are the farmers, over 90 per cent of them, who work in the natural resource management field, in land care. That is why continuous innovation, underpinned by pertinent and high-quality research, is basically the only tool Australian producers have to maintain our competitive, profitable and sustainable industries, and the regional communities that depend on them—something that Mr Howes clearly forgot or did not understand. Of course, innovation is also critical to the Australian economy and our capacity to maximise future export opportunities.

I am pleased that our side will inject over the forward estimates another $100 million into rural RDCs. There are 15 of them—five statutory and 10 industry owned—and they support a wide range of rural industries. Through them primary producers themselves actually directly invest in research and development. They understand really well why they need to do so—helping themselves and helping Australia. Like all industries, it is essential that the agricultural sector invests in its own future.

With the development of an RDC the respective industry has the capacity to set up and collect levies paid by its own members. The government helps this process by doing the collection and passing on the proceeds after recovering costs. To encourage producers to invest in their own productivity and to support the industries themselves the government actually matches the corporation's eligible R&D up to legislated limits.

The national interest demands a healthy, positive agricultural sector. A healthy agricultural sector requires farmers to be both competitive and profitable. Consumers benefit from this with improved quality products, greater choice, better information and safety. Biosecurity is very important to farmers.

There are approximately 134,000 mum-and-dad-style farm businesses in Australia. They produce 93 per cent of Australia's daily domestic food supply. Mr Howes clearly takes that food for granted and thinks that mum-and-dad farmers do not produce terribly well. There are about 300,000 people directly employed in agriculture and over 1.6 million employed in food and fibre production, processing, distribution and marketing. Farmers themselves contribute about $48.7 billion, or three per cent, to Australia's total gross domestic product.

During the global financial crisis it was the exporting primary sector that clearly kept Australia out of technical recession. We did not hear about that much at all. I do not think I can recall the other side mentioning in all of the debates that it was the strong primary and agricultural export sector that kept us out of technical recession. Again there was an underestimation and lack of respect for the sector.

Australian farmers, no matter what they have had to face—and there is no question that farm profits have been squeezed in recent years—have responded. They have remained internationally competitive through efficiencies and productivity growth. They have looked at their own business and their own industry and taken advantage of what has been provided through R&D and applied it. They are at the cutting edge. Productivity growth in Australian ag has been very strong when compared to a whole lot of other sectors and compared to other OECD countries. It has increased steadily from 1974 to 2003-04 at an average rate of 2.8 per cent. The industry consistently outperformed—to the point of doubling—other sectors. We hear a lot about a whole lot of other industries in this place. We very rarely hear about this one, certainly not from the other side. The average growth rate was 2.8 per cent. Without this growth the gross value of production in the ag sector would be $12 billion a year rather than the current more than $40 billion a year.

So the farmers have got on with the job and R&D is a key part of that. What has concerned me in recent times is that productivity growth has slowed to one per cent per annum, highlighting the need for research and development to ensure that the industry can continue to grow and develop. You need a focus on R&D. It takes time to come through to be proven and to be applied. Farmers will apply it. We have proven it year upon year. That is why our increased funding—the $100 million over the forward estimates—will be important. It may not be important tomorrow, but it will keep us competitive five, 10, 15 and 20 years out. That is what this commitment will do.

In 2011 the Productivity Commission and the Rural Research and Development Council reported on this system in Australia. The commission and council acknowledged the strong foundations and recommended some improvements. There were consultations held. A number of actions, particularly in marketing, were recommended. This really is an important component of industry bodies. Wherever Australian farmers are marketing their products, they never assume that their products are wanted and that they are simply going to take them. We have to get out there and continue to market our product and our industry. It is a critical thing. But we have a great story to tell. We should never be afraid of telling the story of Australian farming and the quality of our products.

We need to tell consumers, no matter whether they are in Australia or overseas, about product safety and the nutritional and other production values. When I was involved in the dairy industry through the Australian Dairy Corporation, as it was at the time, Bob Snewin did a lot of international and domestic marketing. That took a number of forms. It kept the market and the consumer very well aware of exactly what the products were, their health benefits, and a whole range of other issues surrounding the actual umbrella side of the product itself. We need to commit ourselves to marketing great products. When I have been out and about I have heard people speak of other countries in which people know of the quality and safety of our products. This is a great story for us to be telling, and we should be out there promoting that strongly at every opportunity we have to increase our market reach.

But our R&D funding should actually equate to practical results down at the grassroots level. We have heard a little bit about some of the robotic improvements in the dairy industry. We have heard about improved pastures and, for the benefit of those perhaps like Mr Howes, who does not understand what skills are required to be a farmer, how to use the carbohydrates to produce the fat and protein in the milk, which are the components that farmers are paid for. There are around 99 different components in milk, all with a particular purpose and opportunity.

We have seen investment in water-use efficiency. That comes as a result of this R&D. We have also seen investment in energy-use efficiency. That comes down to the farm level. But the investment in biosecurity is one of our most critical assets and one of our greatest selling tools. These investments are basically related to NRM and Landcare.

The bill will make matching funding for voluntary contributions to R&D fairer by allowing the extension of the arrangements to all R&D corporations. However, it will be limited by a cap. The matching voluntary contributions in R&D should encourage supply chain partners to work with industry on issues of common interest, and they are of common interest for various reasons.

We know throughout our sector that, if all sectors of the supply and value chain are not efficient and not making commercial profits, the whole supply chain itself is not sustainable. That is why investment in R&D provides benefits all the way through.

Also, it is important to streamline the appointment process for statutory R&D corporation boards. The membership, of course, tells us much about their potency. These boards with strong industry ties bring producers to them. Good leadership is always essential, as we know.

Moving to a couple of other amendments, I think some parts of the minister's role are equally important, such as the long-term strategy rather than day-to-day management—the micro-management at the federal level that we saw so much of from the previous government.

I want to finish by speaking about some of the industries in my electorate in the south-west of Western Australia that benefit from investment in R&D. We have everything: a dairy industry, a beef industry, a horticultural sector and a viticultural sector. All of these have to stay at the cutting edge. They will be very actively engaged in applying new advances in technology in any form of R&D. These are applied quickly. If one farmer is able to achieve results generally and if it is proved that it works—which frequently is the case—away they go, and the whole district picks that up and moves with it and it lifts every boat, if you want to put it that way. As I have said, farmers have never ever sat back and waited. They are always looking for the next opportunity: 'How do I improve my productivity? How do I lessen my cost? How do I deliver what the market is demanding?' That is where the R&D component assists them and that is why it needs to continue to provide that. That is why I am pleased that we on this side, unlike those on the other side, have committed to increasing the funding for R&D over the forward estimates. I support this bill.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I am pleased to stand to speak on the Rural Research and Development Legislation Amendment Bill 2013 and the two accompanying bills, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Primary Industries (Customs) Charges Amendment Bill 2013. I am pleased in particular because these bills build on a strong foundation that allows our rural industries to in many ways manage their own future through research and development and innovation. They improve the framework which allows them to cooperate and to address issues in their sector and to help them, through their own actions, to ensure improved profitability and viability into the future.

The member for Forrest talked quite a bit about people who may or may not understand the life and experience of people who live on the land, and in any parliament you will find people who have not lived one life or another. We have maybe a few people in this parliament that have actually lived the life of a parent of a child with a disability. We have a few people that have lived on the land. We have a few people that have been long-haul truck drivers. There are at least two musicians, of which I am one. In any field that we talk about in this place there will be a small number of people with firsthand experience and many others who do not have it.

One of the joys in this bill relates to the approach that Labor governments have taken, because this is actually a Labor government initiative from back in 1989 and is also a Labor initiative now. One of the things that is most impressive about this approach is that it is an arm's length one that allows people who know the sector to make decisions for themselves and then be supported by government. When I was first elected in 2004 I realised very quickly—in fact, I realised this as a candidate and I am sure everyone here has had the same experience—that you meet the best people in this job. Whatever people tell you about our community suffering and about our young people, I know that when you get to be a member of parliament the people that walk in through your door are some of the most extraordinary people around. So you learn very quickly that you would not be the worst member of parliament in the world if all you did was find people who wanted to do good things and helped them. If you did not have a single idea of your own except that one—that when good people who have good ideas and are prepared to do the work come to your office you help them do it—you would finish your three years having made an extraordinary difference in your community. In many ways that is what this bill is about. It is building on a decision way back in 1989 to hand responsibility for their future back to the people who could make it work, which was those in the rural industries themselves.

Back in 1989 it was John Kerin and the Hawke government that established the research and development corporation model. It is a unique one in the world and it is highly regarded, as we heard the member for Forrest say just a few minutes ago. RDCs were established under the Primary Industries and Energy Research and Development Act 1989 and for 24 years that act has been the mechanism for R&D money to flow through the rural sector, both from those in the sector's own contributions through their levies and from matched government funding. This bill that we are looking at today improves that process quite considerably, and it also is a Labor bill so again I am pleased to be standing as a member of the now Labor opposition having been a member of the Labor government when this bill was drafted earlier in the year.

There are extraordinary opportunities in the rural sector in Australia. I do not live in it as I do not live on the land although I spend a lot of time travelling through it. In fact, I make it business of mine to spend as much time as I can in our small towns not just because I think we should know about them but because I actually love them.

So I spend a lot of time in the rural parts of Australia. And it is quite clear that there are incredible opportunities for Australian agriculture and rural industries. As a nation we need to care that people in those sectors can actually do as well as they can—for a start, because like other businesses they have invested their money and we should care that people who invest their own money do as well as they can; but also because so much of it deals with food, and food is very much the stuff of life, as we heard the member for Forrest say.

When you look at the world there are many opportunities for our expertise to be used, not just to solve some of the problems we face in terms of food security in the world but also to use our expertise, both on the ground in growing markets—to literally export our businesses and our expertise—and to supply developing markets across the world in a whole range of foods that we do not actually invest in.

I look at my African community, for example, that has arrived in Parramatta recently. Most of them are farmers. I am not quite sure why some of them are living in Parramatta—I am not sure they have found their way to the places where their skills are really needed yet. But so many of them are farmers and their skills are in crops that we have not yet seen in Australia yet—over 50 varieties of potato, for example. These are incredible new crops that new and developing markets will want. And the expertise in Australia in efficiently producing good-quality, safe food, which is free of the worst of the toxins and the pesticides that you find in food elsewhere in the world, cannot be underestimated.

It was a great tragedy, I think, that through the eighties, nineties and what are known as the naughties, Australia gave up on some of its food processing so easily. Short-term problems with the Australian dollar and serious problems with drought, for example, which put our industries under incredible pressure, led us as a nation to in some cases abandon our rural neighbours and give up on what should be one of Australia's great growth sectors. As the middle-classes grow in India and China, they are going to want what I want and that most people in this place want. They are going to want to know that their food is clean and safe and fresh and contains the nutrients that they need.

As we see population growth around the world, and growing pressure on food supplies, we see issues of hidden hunger, we see people who have enough to eat but where the food is lacking in the appropriate nutrition. That is a problem we see growing in Europe and in most developing countries. So, again, the expertise in the Australian market in addressing some of these issues is phenomenal and we should be a world leader in this area. It is actually up to all of us to understand the value, not just in the industries as they are but in their potential, and get behind them and ensure that we are where we should be in what has been and is one of our most important, innovative and resilient sectors.

The history of this, as I have said, dates back to 1989. There was ad hoc support for R&D before that, but that was the point at which the system that we currently use to support R&D in the rural sector was developed. There are currently 15 of what are called RDCs—six statutory ones and nine industry owned ones—providing services to a diverse range or rural industries. They effectively provide a mechanism for industry to invest collectively in research and development—in other words, to map out their own paths as they see their own needs. The Australian government assists these industries by establishing a levy for the industry, and collecting it if the industry so requests, and then returning those funds to the relevant RDC less the cost of collection. In addition to that, the government matches the RDCs' eligible R&D spending up to legislated limits. In other words, an industry that decides that it needs to invest in R&D or innovation and which decides as an industry that it wants a levy can ask the government to collect that levy and pass the levy over, less costs. Then up to a cap the government matches the contribution of the industry. Again, that is a very good model that puts the control in the sector itself. As I said earlier, it allows a government to support good people who are doing good things in the way that governments can. It is a very interesting and quite effective model.

Back in 2011 there was a Productivity Commission review into this, and a number of suggestions were made. There was extensive consultation on it and a number of changes were recommended. These amendments actually carry through eight acts of parliament, and I am just going to read them because it gives a sense of how broad these sectors are. The eight acts that have to be amended here include: the Primary Industries and Energy Research and Development Act 1989, the Pig Industry Act 2001, the Dairy Produce Act 1986, the Egg Industry Service Provision Act 2002, the Wool Services Privatisation Act 2000, the Forestry Marketing and Research and Development Services Act 2007, the Horticultural Marketing and Research Development Services Act 2000 and the Australian Meat and Live-stock Industry Act 1997.

One of the changes is in schedule 8 of the bill and it amends various acts to allow statutory RDCs to undertake marketing activities where requested by the industry. Industry owned RDCs can already do that, and the government does collect the levies where the industry decides that they wish them to be collected. But the government does not match those contributions for marketing, it only matches contributions for R&D. This amendment extends that capacity to statutory RDCs—again, currently only the industry owned ones can do that.

Schedule 5 of the bill amends six of the acts to enable the Commonwealth to match voluntary contributions to the RDCs. Because this has been such a successful program and so many people in the industry can see the benefits of making these contributions, there are actually considerable voluntary contributions as well. This amendment allows the Commonwealth to match voluntary contributions up to the existing cap, which for each industry sector is based on the gross value of production for that industry.

It also removes a couple of red tape-style provisions of the act. Schedule 9 of the bill will repeal section 26 of one of the acts so that statutory RDCs will no longer be required to submit their annual operating plans to the minister for approval. It was clear that it was becoming an unnecessary burden for both the RDC and the minister to actually review the operating plans on an annual basis. It also streamlines the appointment of RDC board members so that five board members will be appointed on a five-year basis with a number of suitable candidates on a reserve list so that unplanned board vacancies can be filled over the following 12-month period. Those two amendments are really about taking out some of the unnecessary red tape, which is always a good thing, and allowing these organisations to get on with what they do.

Another rather important change is that currently industries are levied on their request for an industry as a whole. But in the fisheries industry, for example, it would be quite useful to deal with subgroups within the industry from time to time. For example, the prawning industry already has a marketing strategy in place, which is quite separate. Schedule 4 of the bill amends the PIERD Act to allow for subsections of an industry to have a levy collected. It creates a new section to enable a statutory levy on an individual fishery industry sector to be collected if established by that industry sector. Then, of course, that levy will be matched also by the government up to the appropriate cap. Again, in an industry like fisheries, where some sections of it are so different from others, it is an important change.

These are quite interesting bills that deal with an incredibly important part of the Australian industry, a sector that have been managing their own R&D effectively since way back in 1989. It improves their capacity to do so and it removes some of the regulatory burdens associated with the activities of these all important RDCs. I commend these bills to the House.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Rural Research and Development Legislation Amendment Bill 2013, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Primary Industries (Customs) Charges Amendment Bill 2013. I am pleased that this cluster of bills are receiving bipartisan support. I always find it very interesting when members of the opposition, who until very recently were the government, talk about how wonderful agriculture is given that they presided over some of the worst attacks upon agricultural sustainability and survival that we have seen. I include, and I will refer to it again later, South Australia's Senator Penny Wong's decision, as the then minister for the environment, to go into the irrigators' market and buy irrigation water off farmers in the heat of the worst drought on record. Those farmers were desperately poor at the time and were trying to survive—trying to put food on their own tables; trying to rescue their own herds—and so they sold their water to an environmental water holder, which now has so much water in its environmental bucket that it does not know what to do with it. The outcome of that decision to simply plunder the irrigators' market rather than investing in on-farm irrigation water use efficiency has left us with only half of the high security irrigation water left in northern Victoria.

We now have a situation where these bills can help fix things. Minister Barnaby Joyce said:

The statutory RDCs—

or rural development corporations—

will be able to undertake collective marketing using industry-raised funds. For example the Fisheries Research and Development Corporation will be able to promote Australian prawns, if the industry requests this.

I personally believe our various industries should also consider very carefully levying the importers of various food products who will also benefit from any Australia-based marketing effort.

The minister also said:

The legislation will also provide industries with greater freedom to amend their levy and charge rates in response to changing circumstances such as seasonal market issues.

And finally, he said:

These bills will make statutory RDCs more efficient and transparent through statutory funding agreements and streamlined board selection processes.

So these are good bills, and they are already supported by the Abbott government's commitment to provide an additional $100 million in funding for agricultural research and development. These bills are fundamentally about how to increase the current levels of investment, whether from the private sector or the public sector, in agricultural research and development efforts in this country. Without that investment we will stall as a nation in terms of our capacity to take advantage of the so-called 'dining boom' that the former minister for agriculture, the member for Hunter, referred to in his remarks on these bills a short time ago.

It is both tantalising and depressing for farmers when they are reminded that after the mining boom comes a dining boom. They would love to imagine that that was going to be something that occurred seamlessly in their own lifetimes. Unfortunately, there are so many barriers and impediments—the natural resource fluctuations in this country, the seasonal variations and, thrown at them every day, the invasive and often out-of-control state, local and federal government bureaucracy and regulation. The red tape accumulated in particular under the last government, and one of the key outcomes we will be able to deliver under the Tony Abbott-led government is a reduction in the red tape that kills farmers' capacity to innovate or to take advantage of our superb soils and climates and that could kill the potential to exploit new markets in the dining boom.

We are among the world's most effective and efficient innovators in agriculture. We are the world's leaders in arid zone wheat growing. We developed techniques which have us growing wheat where in other countries you would simply look at the flowing sand dunes. This is where we have done extraordinary work in wheat seed breeding. A lot of that seed breeding was undertaken by state governments, particularly in Western Australia and South Australia but also in Victoria. Very sadly, most of those state-supported seed-breeding stations are no longer, as the states almost universally have pulled back from supporting research and development in agriculture and have instead presided over the closing of a lot of research stations and extension efforts. It has become so serious that now, as I face a crisis in my electorate with the attack upon our last Australian fruit-preserving company, we find that, when we turn to the state government asking for them to give us some ideas about alternative crops, they throw up their hands and say, 'Sorry, we've just sacked our last agricultural scientist, and of course we've closed our local research stations or they've been sold to the Chinese.'

So we have a serious problem in this country in terms of how to have an appropriate level of research and development undertaken. As I said, we are some of the world's biggest innovators in increasing agricultural productivity and introducing new crops and genetics. We have, for example, developed some of the world's most productive rice growing, and now we are moving into more areas where we might grow rice in drier conditions, not the traditional flooded rice paddies. We have some of the highest rice outputs per hectare in the world. We are also some of the world's highest producing field tomato growers. In my electorate of Murray, it has been sad to see our 20 or more field tomato growers decline to just two or three, but those two or three are still benchmarked as amongst the world's most creative and productive.

We in Australia pioneered what are traditionally called flood irrigation techniques—I would call them gravity-fed irrigation techniques, because 'flood' implies that the water is out of control or that somehow it might not be environmentally sustainable. In fact, our gravity-fed irrigation systems, particularly in northern Victoria and southern New South Wales, are some of the oldest in the country—over 130 years old in the case of the Victorian Goulburn-Murray water system—but they have used innovative laser grading technologies, re-use systems and solar-powered measurement systems to the point where they are now some of the lowest energy users to produce some of the most environmentally sustainable irrigation. The only thing killing them now is the cost of that water.

We are also one of the few countries left that have managed to hang onto their honey industry with healthy hives. Most of our competitors are now buying hives from Australia because of the deaths of their hives as they are exposed to their diseases and their inappropriate chemical use regimes on their orchards, but in Australia we still have—I would hope more through deliberate action than through good luck—the world's most sustainable, healthy and disease-free hives. The bee pollination services are worth hundreds of millions of dollars to our orchard and horticultural industries. Our research and development needs to continue to focus on how we keep our Australian hives disease free.

In Tasmania and South Australia we have some of the most sustainable and healthy wild fisheries, but we also have some of the world's most sustainable and disease-free farmed fish or aquaculture industries. Again, this is not simply due to good fortune; it is because of research and development, very often as a consequence of private research and development investment. We can stand tall and proud in not having diseases like the twirling disease affecting our Tasmanian salmon. We have extraordinarily successful aquaculture enterprise—particularly, as I said, off South Australia—yet ironically we now import more than 80 per cent of the fish that is consumed in Australia.

So we are a country of quite extraordinary contradictions when it comes to our innovation, our effective agribusiness output, and our family farming—which, of course, Paul Howes has been snide about, implying somehow that 'ma and pa' farmers, as he calls them, are like Ma and Pa Kettle or hillbillies from the Appalachians! Of course, what was behind Paul Howes's comments as a key mover and shaker in the Australian Workers' Union is that family farms typically do not have their labour unionised. They are not card-carrying members of his union, in particular. And wouldn't he love to have the landscape populated by factory farms and corporate farms where he could get his union membership completely infiltrated and make our labour even more regulated and less productive and efficient! But I will move on from Paul Howes's snide and calculatedly disparaging remarks about Ma and Pa Kettle farmers in Australia.

Our farmers are extraordinary in their capacity to survive some of the most wildly fluctuating seasons in any agribusiness focused country on the globe. We have managed to deal with pestilence, whether mouse plagues or locust plagues, and a whole range of threats. But the whole business of Australian agriculture is under threat, and ironically it is not because of mouse, locust, fox or rabbit plagues or pestilence—it is because of the duopoly of Coles and Woolworths.

Would you believe that if you are in a company like SPC Ardmona, or Heinz in Echuca, or Cedenco or Kagome, and you set about your research and development effort and, through your research and development investment, come up with a brilliant new product or perhaps a brilliant new variety of fruit or vegetable, and you put it on the shelves of Coles and Woolworths and they see it is a great seller, then within weeks you, as the owner of that new technology or recipe or packaging or process, can expect to get a call from Coles or Woolworths, who will say to you: 'We'll have that product, thank you. We'll have it at about the same size. We'll have a red cap instead of a blue cap on our home-brand generic version. And, by the way, we'll take it from you at 30 per cent less than we are paying you for your branded product. And, by the way, if you do not want to cooperate, you might find your branded product out the back somewhere near the toilets—or, indeed, we might find a very good reason why we don't carry your branded product at all'? So you can see that, if you do invest in research and development, as perhaps one of the few remaining food manufacturers in Australia, then you are up against it when it comes to the power of the big supermarket duopolies. And Aldi, unfortunately, is not far behind them in this.

Our government has recently ushered in the voluntary code for supermarkets to try and get less unconscionable behaviour and less flagrant use of their market power. Time will tell if those supermarkets realise that the writing is on the wall or if we have to move to a mandated code. But also, as a government that understands and cares, we will have a root-and-branch competition policy review. All of that, hopefully, will happen sooner rather than later and will, in turn, make a difference in research and development investment in our country, because, as I said a moment ago, if you come up with a new product in Australia, you have only weeks before that product is demanded as a no-name version on the big supermarkets' shelves. In the case of Heinz, when this happened to them with their tomato sauce factory at Girgarre, they threw up their hands and said: 'We're out of here; we're going to New Zealand—even though they do not grow manufacturing-variety tomatoes in New Zealand, it's easier for us to go to New Zealand, where we don't have these pressures. We will produce our fabulous tomato sauces elsewhere.'

So this bill talks about research and development: the need for it in Australia, and how we want to make it more efficient and effective, particularly in rural and regional areas in agriculture. But, at the same time, we have got to acknowledge what constraints we are up against in terms of having proper investment within Australia itself. The states need to come back into the game. They need to reinvest in research and development.

When Labor closed those generations-old CSIRO research stations in the electorate of Mallee along the Murray River, killing off literally hundreds of years of continuous data on what had been grown and how it had responded to different climatic conditions, that was a tragedy. That was a death blow to some of our local vineyards in terms of new varietal development. It makes us more dependent on imported or GMO products or patented products—seeds or genetics—where we lose control of the final output and where we end up paying royalties rather than giving our farmers a better return for the food or fibre that they produce.

I commend this bill to the House. It is a very important piece of legislation. It is noncontroversial in many ways but what it does is highlight that in this country research and development will have to be improved and expanded if we are to get near the potential or opportunities that the dining boom tantalisingly offers us.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

I am delighted to be speaking on the Rural Research and Development Legislation Amendment Bill 2013, along with the associated bills, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Primary Industries (Customs) Charges Amendment Bill 2013.

As the member for Murray rightly points out, it enjoys support across the chamber. In fact a version of the bill was first introduced into the 43rd Parliament by the then government on 19 June this year. The bills did pass through the House of Representatives but unfortunately did not get through the Senate by the time the parliament was prorogued in August this year and, as a result, the bills lapsed. They now come before the House in substantially identical form to that which was presented before the 43rd Parliament.

It is important subject matter, important legislation, because it goes to food and our capacity to produce it not only now but also in the future. We know that Australia is presented with a great challenge but also a great opportunity when it comes to feeding the world and ensuring that we can meet the demand for a growing middle class, particularly in our region, and a growing demand for our food, particularly our protein related agriculture.

The Rural Research and Development Legislation Amendment Bill updates and refines the Australian Research and Development Corporation model, the RDC model, in line with policy commitments made by the then Labor government in the Rural Research and Development Policy Statement during the previous government's term in office. In preparing the policy, the former government met and consulted with stakeholders around the country and took into account the many submissions and the interests of those groups. Extensive consultations continued in the process, leading to these legislative amendments before the House today.

In short, the bill will allow statutory RDCs to carry out marketing activities on behalf of their industries if a marketing levy is in place. RDCs undertaking marketing will be able to deliver their industry expertise to provide cost-effective and targeted marketing activities in accordance with industry needs and priorities. Importantly, as I have just said, this is about industry-led marketing initiatives building on the expertise and the research that is done by these industry-led bodies. I do note that no charges to levies, rates or new levies are a part of these amendments. However there is capacity to increase levies in consultation with the industry and industry-led initiatives.

The amendments will encourage private sector investment into rural R&D by extending to all RDCs the arrangements for government matching funding to voluntary contributions for eligible research and development. Statutory funding agreements for statutory RDCs are proposed to drive performance improvements and increased transparency in the delivery of R&D services. Funding agreements have been a flexible mechanism for providing government guidance and oversight to industry-owned RDCs and these amendments will extend that mechanism to statutory RDCs.

The amendments promote due consideration of diversity in the selection process. The amendments aim to ensure high-quality boards for RDCs and reduce the time and delay associated with securing them. The bill proposes to allow the collection and matching of individual fishery industry levies subject to a cap based on the gross value of production of that individual fishery. This will allow specific fisheries to propose levies to invest in R&D for their industry and to undertake marketing in a similar way to other rural commodities.

The burdensome requirement for ministerial approval of statutory RDC's annual operating plans will be removed, and other minor technical matters have been addressed in the bills. The Primary Industries (Excise) Levies Amendment Bill 2013 removes the maximum levy rates for research and development, and marketing levies on primary industry products.

Similarly, the Primary Industries (Customs) Charges Amendment Bill 2013 removes the maximum charge rates for R&D and marketing changes that are duties of Customs. The numerical maximum levy and charge rates will be removed and the rates will be limited to no more than the level recommended by an industry body, following consultation with the levy and charge payers. The amendments will not change any levy or charge rates that are in operation at the moment. They will streamline the processes for changing the rates in the future. Levies and charges may be increased following a request by industry, but will not be allowed to be set above the rates recommended by industry. As I have said, this is an industry driven initiative. This will allow industries to manage their collective investment in research and marketing while also providing for a safeguard for levy payers against an arbitrary increase to rates.

As I said at the outset, the bills enjoy bipartisan support. They have their origins in the former government and they are informed by our general policy in relation to this area—one was set out by the former minister, Senator Ludwig, in his plan for the food industry into the future, cognisant of the fact that there is a growing world demand for food and, in particular, protein products, and that Australia is well placed to meet this growing global demand.

We know we face enormous productivity changes within the industries. We also know that we face enormous climate and environmental challenges within the industries. But I believe that Australian ingenuity, driven by industry based research and development, will enable us to overcome these challenges and will ensure that Australia and Australian producers are well placed not only to meet the food demands of our domestic markets but to reap the benefits of meeting the burgeoning demands of a growing middle class within our region and throughout the world. For these reasons, Labor supports the legislation and joins with the government in hoping that they enjoy a swift passage through the House and through the other place as well. I commend the legislation to the House.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

I rise to speak on and support the Rural Research and Development Legislation Amendment Bill 2013 and the cognate bills, the Primary Industries (Excise) Levies Amendment Bill 2013 and Primary Industries (Customs) Charges Amendment Bill 2013. I welcome the government's recognition of the importance of rural R&D, particularly in agriculture, fisheries and forestry, three very important industries in my electorate of Page. These three sectors provide more than five per cent of the jobs in the Northern Rivers, more than double the state average. In the township of Kyogle they account for 22 per cent of jobs, while in the Richmond Valley, where the Casino meatworks is a major employer, manufacturing makes up 20 per cent, of which 75 per cent is directly attributed to food manufacturing. However, in the five years to 2011, employment in agriculture has shrunk by more than three per cent. We have also seen major job losses and mill closures in the forestry sector over the same period. This may simply sound like dry statistics to some, but for my community it is about jobs and putting food on the family table, and this is why I am supporting this bill.

I am a farmer. Before, during and after the election I spoke to many other farmers about issues they confront on a daily basis. One thing that has come through loud and clear is that they are an innovative bunch and understand the importance of R&D in keeping their industries competitive, both domestically and internationally. They know they simply cannot sand still and that they must evolve and use best practice.

The same is true of our rural research and development corporations, which provide the mechanism for our primary sectors to invest collectively in services that will benefit their industries, such as R&D and sometimes marketing ones. These RDCs have an enviable record and the nation's R&D model has served it extremely well. As another speaker has previously noted, over recent decades Australia's rural productivity has increased at twice the rate of those of other Australian industries and has been driven by our rural R&D. For this reason alone it is time to give all the RDCs the necessary arsenal to see Australia through the 21st century and beyond—that is, the ability to provide marketing services if the industry wants it and is prepared to strike a levy to pay for it.

It is well known in regional Australia that the benefits of R&D far outweigh the costs, and I must say there is nothing better than good old Aussie ingenuity. Need somewhere to hang your clothes? An Aussie invents the ubiquitous Hills hoist. Want to mow your lawn? An Aussie invents the Victa. And, of course, when the world wanted the perfect eating apple, an Aussie came up with the Pink Lady. I could go on and on but I am sure you get the idea. Australians are good at thinking outside the box and at seeing things anew and finding innovative solutions. That is what our rural industries need, not bailouts but assistance in doing what we do best: doing things better than our competitors. This bill will encourage more private sector investment in RDCs by allowing the government to match funding for voluntary R&D contributions.

As I have said, agriculture, fisheries and forestry are the central planks of the economy that support the livelihood of the people of my electorate. Those industries face many challenges in the years and decades ahead—the ongoing effect of the high Australian dollar, a changing climate and intense global competition—yet I am proud to say the people of Page are optimists. Instead of wallowing in despair and self-fulfilling defeat, they rise to any challenge and search for the opportunities—and there are many. As the Northern Rivers looks to become one of Australia's major food bowls, our fresh and processed produce is in increasing demand. The local food industry group, Northern Rivers Food, has also positioned some of our produce in the premium boutique end of the market thanks to a very successful marketing campaign. As Australia's and Asia's populations expand export opportunities abound but we must not be complacent. We must actively grab the future to make sure it happens.

Our R&D model must be updated to help Australian producers make the most of the opportunities when they present themselves. This has the added benefit of providing food security and keeping the sector profitable and sustainable. Let me give you a concrete example of how this bill will help the people of Page. During my maiden speech I made mention of the seaside communities of Ballina, Iluka and Yamba that are dotted along Page's 100 kilometres of coastline. As I am sure many members of this House will know, Ballina is the home of the Big Prawn. Indeed that recognition of the importance of the prawning industry is held so dear in our collective hearts that when it was proposed to knock it down a community campaign was waged and not only rated its own segment on the David Letterman show in the US but also led Bunnings to rebuild an even bigger prawn. Yet while we love our Big Prawn, the industry itself is under threat from international competition. Presently only 22 per cent of prawns in New South Wales are caught locally. The rest, sadly, are imported.

This brings me back to the bill. In anticipation of the amendment to allow statutory RDCs to undertake marketing, the Australian agricultural and wildcatch prawn industry have jointly explored the idea for a national prawn marketing campaign. Both groups have already made voluntary contributions to the Love Australian Prawns campaign being rolled out in retail and wholesale seafood stores, and here I must nod to Woolworths, which has put all of their merchandising in their supermarkets free of charge. So successful has this 'Australian-made' campaign been so far that the Ballina fishermen's co-op manager, Phil Hilliard, said they could not keep up with demand at last month's Ballina Prawn Festival and quickly sold out. Mr Hilliard and the rest of the prawn industry are keen to see this amendment passed as it will allow the industry to establish a statutory levy which in turn will allow the Fisheries Research and Development Corporation to undertake more marketing campaigns and help our prawn fishers increase their market share.

Allow me to turn my attention to another industry that I hold dear to my heart, and that is macadamias. The Northern Rivers are the home of the macadamia, Australia's only native nut. I cannot overstress the importance of this industry to the livelihoods of the people of Page. The combination of the macadamia's unique flavour, texture and heritage is a source of great pride among those in the industry and the wider community.

Hidden behind the windbreak trees on most of our country roads are vast orchards of macca trees, some with more than half a million trees. In 2012, 8,300 tonnes of macadamia kernels were sold, 5,300 tonnes of which were sent offshore, putting Australia's macadamias second to almonds on the list of the country's top tree nut exports, with a value of more than $120 million. The industry provides approximately $376 million of economic value to its local communities, represented by direct and indirect employment—sales of goods and services to the industry and the industry's direct sales.

The industry has a strong track record of innovation and adoption underpinned by arguably the best macadamia research and development program in the world. The macadamia has one of the highest investments in research and development relative to its GDP of any Australian horticultural industry, at more than $4 million annually. Export of Australia's native nut is on the rise, with production rapidly expanding backed by firm global demand. This is led by Asia, making home-grown macadamias one of the nation's top horticultural exports and unrivalled leaders in the world trade. Yet, there are competitors in the wings wanting to grab some of our market share. The industry must stay on the cutting edge to keep Australia at the forefront.

I also note a report on my local radio station, 2LM, this morning about two innovative field trials being undertaken by the tea-tree industry around Casino, which have been jointly funded by the industry, the Rural Industries Research and Development Corporation and the New South Wales Department of Primary Industry. DPI researcher Gary Baker said that by using plant cuttings they can yield the same oil concentration as from three- to four-year-old seedlings. He said that in the first year the cuttings should produce 40 per cent more yield than seedlings, which covers the extra costs associated with producing cuttings. After that increase, yield in years 2 and 3 is pure profit. The implications of this research could transform the industry.

Ballina Fishermens Co-op manager, Phil Hilliard, also spoke of the need to reduce red tape in the industry which, again, this bill addresses by removing the product-specific maximum levy rates. Put simply, this means that when an industry requests a change in the levy rate it can be done quickly and easily without changing the primary legislation. This will reduce the cost and delay when a sector decides to increase its investment in R&D and/or marketing. Nor will an RDC be required to seek ministerial approval for its annual operating plans, a time-consuming piece of red tape on both the government and the RDC.

I have said that Page has suffered the loss of hundreds of forestry jobs in recent years. I can only ponder what the local industry would have looked like today and how many people it would employ had these changes been brought in earlier. I say that because the forestry industry has long been reluctant to raise its general levy, as is its right. However, there has been much interest from businesses that want to invest in specific R&D projects. Under the changes, the government will be able to match voluntary contributions from businesses and thereby encourage more R&D, which could help turn the industry around.

Of course, when spending taxpayer money—even for a high return—we must always insist upon the highest level of transparency and accountability. This bill strikes the right balance by embedding these essential qualities while ensuring that RDCs are nimble enough to respond to changing industry and market conditions, ensuring their ongoing profitability and sustainability.

The transparency and accountability of the RDCs will be driven by such funding arrangements, which must be tabled in parliament and detail the RDCs' corporate governance and performance. The formulation of the arrangements will also allow the government to provide guidance on research priorities and the needs of the broader Australian rural sector. For the people of Page, the passage of this legislation cannot come fast enough.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I welcome the opportunity to briefly speak on the Rural Research and Development Legislation Amendment Bill 2013, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Primary Industries (Customs) Charges Amendment Bill 2013. This first of these bills will amend 10 acts in the agricultural portfolio to improve the efficiency, transparency and accountability of the rural research and development corporations. The bill also changes the framework for the selection committees in filling board positions on statutory R&D corporations.

There are two companion bills, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Primary Industries (Customs) Charges Amendment Bill 2013, which effectively eliminate the need for amending legislation to change the levies or fees being charged so that, in most cases, it will be possible for such changes to be made by regulation. So I welcome the changes in the legislation.

As other speakers have already said, this legislation is almost identical to legislation which was passed by this House on 4 August but which did not get to the Senate and therefore lapsed. So the government, quite properly and rightly, is reintroducing it to the House. The legislation is the result of a range of consultations which took place across the agricultural industry sectors generally, and I believe the legislation reflects many of the matters which were raised during the consultations. The changes in this legislation make the research and development corporations more flexible and more responsive in dealing with the new realities they face. Through this legislation the governance processes are streamlined and made more accountable and more effective.

I note that it was in fact a Labor government, back in 1989, that established the research and development corporation model which we are currently talking about. The amendments in the legislation will encourage private sector investment in research and development because they enable the private sector to apply for matching government funds, because the changes streamline the selection process for RDC board members and because they provide more flexibility to the RDCs. The amendments allow individual and industry-specific levies to be applied—in particular, I note, to the fisheries sector. I support and welcome this change. It will allow specific fishery sectors to raise their own levies and to carry out their own research, development and marketing.

This principle should be applied to every industry sector in primary production. The different sectors of primary production—whether horticulture, agriculture, animal farming or fisheries—have specific opportunities, specific needs and specific barriers. Generally, too, there is a uniqueness about them which allows only themselves to best manage and spend the money raised from their respective industry sectors. So I welcome allowing, as these amendments do, the fisheries sector to have specific programs. But, as I said, this principle should apply more broadly across all sectors if they have the capacity to organise themselves into a structure of some kind.

Research and development is as vital to primary industries as it is to any other sector of the economy, whether it be manufacturing, mining, medicine or technology. Innovation in and the advancement of Australia's primary industry have in fact enabled Australia's primary producers to remain competitive, and Australia has often led the way in new technology and new farming methods. But the global production of food is becoming increasingly competitive. Other countries are now competing with Australia for global supplies of food products for which, in past years, Australian growers had secure markets. That is no longer the case, but primary production nevertheless presents Australia with huge opportunities.

Our primary producers need to remain competitive and they need to be able to respond to changing markets and the changing climate. In fact, according to the National Food Plan put out earlier this year by the former agriculture minister Joe Ludwig, 15 per cent of the Australian workforce is involved in food production. We export $30.5 billion worth of agricultural products annually, and produce enough food to feed the country twice over.

Food creation is, indeed, the biggest employer in rural and regional communities. It provides one in six jobs. Australia exports over half the food it produces, yet over 90 per cent of the fresh produce sold here is also produced here. By 2050, world consumption is expected to be 75 per cent higher than it was in 2007. And the value of Australia's agriculture and food related exports will have increased by 45 per cent in real terms by then if current projections continue. In 2011-12, primary production generated annual earnings of $42.6 billion for the Australian economy and, as I said earlier, food exports accounted for some $30 billion.

Other speakers have made the point that rural productivity has increased at more than twice the rate of other industries. I welcome that. I will come to that point in a moment, because it is not all good news for our primary producers. I want to talk for a moment about one of the biggest challenges that our primary producers are faced with, and where research and development is going to be critical to their survival—that is, the question of climate change. Climate change—whether it is simply the changing of weather patterns, where seasons come in earlier or later than in past years; changes in rainfall patterns; higher temperatures and higher temperatures for longer periods of time; extreme weather events or perhaps even new diseases—is a real threat confronting our primary producers. Climate change presents challenges that individual farmers alone cannot respond to. But collectively—using research and development carried out by the corporations and by other government institutions such as CSIRO, Australian universities and other research organisations—they may be better able to respond and adapt to the changes that are required for them to survive and to continue producing.

I believe that research that is specifically related to climate change and how it impacts on our primary producers, and our farming sector specifically, is one of the most important areas that we need to put money into in the years ahead, because it is a real threat. It is happening right now and it will make a significant difference to the ability of our farmers to continue to operate profitably, not to mention to continue to be competitive in the global market.

I said earlier that I wanted to talk about how well our primary industries have been going in recent years. Whilst the growth rate might have been double that of most other industries, the concerning reality is that Australia's spend in research and development has, over the last decade, been dropping. Internationally, we have fallen from around ninth place, in the year 2000, to something like 16th place internationally right now. That is according to a research paper released earlier this year by John Mullen from Charles Sturt University and Mick Keogh from the Australian Farm Institute. Their research paper was reported in the Australian on 6 February this year. The paper linked falling farm productivity between the years 2000 and 2010 with reductions in research and development funds. We know that research and development will lead to primary industry production becoming more efficient and more effective and that if we want to increase production and productivity in this country it will not come about by us increasing the area of land cultivated and produced from; it will come about through us doing better with the land that we currently cultivate and with the farmers that are currently in the system. In other words, the farmers need to become more efficient and more productive with what they have rather than trying to expand their operations, because that is just going to add to their costs and therefore the bottom line for them would be no better than if they can become more productive with what they have.

One of the other issues that arise when you discuss research and development is the argument and discussion about the genetic modification of foods. It is a debate that needs to be confronted and that I do not believe has been properly confronted in recent times by this parliament, and it is a debate that is currently taking place across the world. It is a debate, again, that will have very serious ramifications for the future of our farming industry. Whilst I certainly do not wish to debate the issue right now, I just point out that it is one of those matters that we seem to perhaps not want to address or focus on when the reality is that we need to focus on it, because genetic modification can make a difference to farming while simultaneously it is a matter that polarises the community both here in Australia and in other countries. Therefore it is a matter that I believe this House needs to properly debate at some point or another.

Australian farmers have indeed been through tough times in recent years, because of the high Australian dollar, droughts, floods, climate change, overseas competition and, as the member for Murray quite rightly said, monopolies squeezing the growers in every way they possibly can. So I have no doubt whatsoever that for primary producers of this country it has been a difficult decade up until now. The reality, however, is that all of these factors—whether the high Australian dollar, the droughts, the climate change or the overseas competition—will continue. They will not change. We might modify them a little bit here and there, but the reality is that our farmers will be confronted with those issues into the future as well. So I believe that the only way that they will be able to survive, to remain competitive and to grow is by us investing in research and development so that they can be smarter about what they do and how they do it. That is going to give them the competitive advantage in the marketplace. Nothing else will.

So, for those reasons, I believe that this legislation is appropriate and should be supported by the House. I thank the minister for bringing it back into the House given that it was an initiative of the previous government, because I believe it will be welcomed by the primary producers and the farming sector of this country more broadly.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The world's population, based on estimates from October this year, will reach some 9.7 billion people by 2050. The same report, issued by the French National Institute of Demographic Studies, projected there would be 10 billion to 11 billion people on the planet by the end of the century. At the same time, Australian Bureau of Statistics projections reported in The Sydney Morning Herald last week predict that Australia's population will be 40 million people by 2060 and almost 50 million by 2100. Let us think about that for a minute. The ABS's population clock, as of 11 o'clock this morning, estimates there are some 23,301,971 people in Australia at the moment. By 2060 that figure will almost double. That is a lot of hungry mouths to feed, a lot of food to produce and a lot of farmers who will be required to undertake that task.

I proudly stand in this chamber as the member for Riverina, a vast and diverse electorate which has at its heart small and large businesses which are feeding the nation, the region and indeed the world. Riverina people are grain growers, dairy and beef producers, irrigators, apple growers, rice and citrus producers, wool and cotton producers, olive growers and wine producers—and I could go on. There is not much that we do not grow in the Riverina, and we do it amidst some challenging times—certainly over the past decade, with terrible droughts, flooding rains and frosts which strike just as the farmer needs them least. Just this year, in fact, it looked as though it was going to be a bumper harvest for canola growers. Prices were good and there was much of it grown throughout my electorate. You could see at one point when driving around or even flying over the electorate a brilliant sea of yellow paddocks for kilometres, as far as the eye could see. It was quite a sight.

As many regional members in southern New South Wales and northern Victoria would be aware, a frost struck and dampened many of the bumper crops and harvests that Riverina farmers were looking forward to. In fact, it was a black frost—it froze from the inside out. That had not happened in the Griffith area since 1969. But we are resilient people in the Riverina. We understand in real terms what a growing national and world population means for producers. Rather than mere statements about the Asian century and its potential for Australian farmers, the people of the Riverina know they have the capacity and the will to expand and grow the food to keep the dinner tables of the nation's families full of quality Australian-grown produce.

We know there is potential and that is why the grain producers of my electorate were so pleased last week with the Treasurer's decision to block the Archer Daniels Midland bid to take over GrainCorp. Gerry Lawson AM, who is the Chairman of SunRice, which is based in Leeton in my electorate, wrote in the company's 2012 annual report that they 'support the view that Australia has the ability to feed up to 200 million people in Asia and beyond'. He is absolutely right. The report also said that the company he heads had a harvest of more than 960,000 tonnes of rice, which will go to feed at least 23 million people around the world every day for a year. Let us think about that statistic. One operation in Leeton and the Murrumbidgee irrigation area produces enough rice to feed at least 23 million people—that is the population of Australia at the moment—every single day for a year. How amazing! How remarkable! They have the capacity to grow further and feed 200 million people in the future.

They certainly are doing their bit in research and development. SunRice and the Ricegrowers' Association well understand the value of rural research and development. They get it and they put it into action. Effective and efficient use of water to them equals food security and sustainability. All they want to do is feed the world with quality Australian produce and invest in ways that ensure they can continue to turn water into food to feed the world for many years to come. In 2011 SunRice looked like being bought out by Spanish multinational Ebro, but the growers, the SunRice board and the Ricegrowers' Association understood the growers' potential. Irrigation was purpose-built in the area. They celebrated the centenary of irrigation just last year. Thanks to consistent research and development, growers' needs are understood and their operations are becoming more efficient.

The Griffith city council area, which takes in parts of the MIA, also has the wonderful ability to feed the nation. Major industries include the top five Australian owned largest export wineries in Australia: Casella Wines, De Bortoli, McWilliam's, Westend and Berton wines. They supply 75 per cent of New South Wales wine grapes. And 70 per cent of New South Wales citrus production also comes from the Griffith local government area. There are three large juicing operations: Real Juice, Summertime and Harvey. There is the export of more than $800 million of wine per year. I could go on about the other wonderful things about Griffith, but this is about rural research and development.

The government recognises the importance of R&D in the agriculture, fisheries and forestry sectors. I want to digress a little. I have just come from a meeting with a pulp and paper mill workers delegation. Mr Deputy Speaker, you would be interested to know that your friends from the Construction, Forestry, Mining and Energy Union had eight delegates here in Canberra to attend a meeting hosted by the member for Gippsland, a National Party member. We recognise the role that the CFMEU are playing in trying to protect their jobs and keep industries in the forestry sector open, viable and prosperous. We also recognise that this is above politics; we need a bipartisan approach. Certainly R&D in the forestry sector was a critical part of that hour-long meeting with the eight delegates from the union.

It was interesting to hear the sorts of things they told us about the challenges that their industry faces. It was interesting to hear about the sorts of initiatives that some of the very well-known and established companies and factories within the forestry sector and within the paper and pulp sector are doing to diversify and to transform so that they can continue to stay viable and afloat in challenging times.

Visy at Tumut in my electorate exports a lot of its product to the United States of America. The high Australian dollar, as the member for Makin has just pointed out, has hurt that business. But they are doing a lot of research and development into plasterboard, realising that that might be something they can venture into to keep their business afloat in these challenging times. I have to say that Visy is one of the most environmentally friendly companies in Australia, and they are also investigating bioenergy opportunities in Tumut and beyond.

Freight costs are also something that affects a lot of these companies—they certainly affect Visy. The plant at Albury is very well known in the newsprint industry, and we all know that the newspaper industry is suffering a downturn due to falling advertising revenue and the decline in the traditional newspaper as a source of news, and that is hurting the Albury plant. But they are also doing a lot of R&D, trying to see what they can do to look at other ways and means of making money. I do commend the CFMEU for today's meeting, for the candid way they approached the meeting and certainly for the way that they are trying to help their workers, along with their companies, to look at ways in which rural and regional research and development can ensure that they do have a future.

It was a request for assistance from MPs to help support pulp and paper jobs, to help pulp and paper mills and to help the industry and you only have to see the passion in these people's eyes to know that they certainly are worried about the future of their industry. They had a campaign, 'Don't Shred Pulp and Paper Jobs'. They realised also that cheap imports are hurting their industries and their futures. We stand with Labor to do whatever we can to protect the pulp and paper mills and to ensure that they do have a future.

Australian farmers also have a big future. They are an innovative breed, our farmers. As the member for Murray pointed out a little bit earlier, they are the best in the world—make no mistake. They know that R&D is essential if Australian industries are to keep pace and to compete successfully in the international arena. And it is becoming difficult. I sat, as did you, Mr Deputy Speaker Mitchell, on the regional Australia committee which looked into the Murray-Darling Basin. We know the challenges that irrigation farmers have because of the Water Act—a water plan which, unfortunately, puts the environment first, second, third, fourth, fifth and sixth. Unfortunately, the irrigators came a long and distant maybe seventh or maybe eighth.

Certainly, there needs to be more R&D into ensuring that better water policy enables irrigators to grow the food to feed not only our nation and our small part of the world but, indeed, Asia, so that we can tap into that growing and burgeoning middle class in Asia, which has a growing and burgeoning need for more protein and fibre. We can produce food and fibre if we have the water to be able to do it, and I am glad that the coalition government is capping buyback at 1,500 gigalitres. I am happy that the coalition is committed to spending some of that $5.8 billion set aside in the original Water Act 2007 for R&D and to plumb the system, rather than just pushing all the water out of the mouth of the Murray. We cannot just have a policy which puts the environment first, second, third and so on and so forth and leave the poor old irrigators, who are growing the food, out in the cold. They would probably actually like to be left out in the cold, because they might have a bit of water, but unfortunately when they only have 43 per cent water allocations for one reason or another it is not very conducive to actually being able to grow rice or grapes or anything else that they do in the Riverina.

The 15 rural research and development corporations, or RDCs, do provide a mechanism for farmers and fishers to invest collectively in services that will benefit their industries, including R&D and, in some cases, marketing. The coalition recognises the need for good R&D. I was quite angry the day before yesterday when I read that union official Paul Howes was talking about how there was no need for 'ma and pa' farmers, and saying that Australia needed to get with it and to go on like the United States does with big conglomerate farming, and that wide-scale farming and family farms can get left behind. Paul Howes does not understand. As Thomas Watson from Wagga Wagga said in a letter in The Australian yesterday, 'Paul Howes's knowledge of agriculture could comfortably fit on a postage stamp.'

But I digress. I think that we all need to get on board with R&D. We all need to get on board with the need to be able to grow more food. And I am sure that the rural and regional Labor members opposite—as I know that you do, Mr Deputy Speaker Mitchell—acknowledge the need for greater R&D investment, acknowledge what a great job our rural sectors do to be able to grow the food to feed our nation as well as other nations. I also know of the important work that you and others did on the Windsor inquiry for a better Murray-Darling outcome.

Unfortunately, the 21 recommendations that were brought down in May last year were not adopted by the then Labor government. It is unfortunate because I think we would have had a far better outcome. I know that the then member for New England certainly acknowledged and recognised the importance of R&D—certainly in irrigation—as does the new member for New England. I know that was at the forefront of our inquiry into the Murray-Darling Basin, the fact that research and development was an important factor.

Certainly the government encourages investment by establishing and collecting a statutory levy if an industry so requests, and by returning the funds to the relevant RDC less the cost of collection. In the current financial year, the government is providing an estimated $250 million to RDCs. That is admirable and is to be encouraged. I commend these bills to the House.

Debate adjourned.

Federation Chamber adjourned at 13:0 2