Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I've often noted during previous contributions in this chamber the importance of our regional industries to the economic strength of our nation. Nowhere is this truer than in my home state of Western Australia. For most people, WA is synonymous, and rightly so, with the resource sector—iron ore, gold, diamonds, oil and natural gas, all major industries which have long contributed to Australia's economic wealth, creating jobs, establishing infrastructure and improving regional communities along the way. However, agriculture has always been, and will always be, an important contributor to the Western Australian economy.

Agriculture is WA's second major export industry, with up to 80 per cent of its agricultural production exported, representing about 10 per cent of the state's economy. According to the latest ABS statistics, WA gross farmgate values have risen from $5.4 billion to $8.16 billion over the past four years, and, due to increasing domestic and international demand and investment, the sector is expected to double its current contribution of $8.6 billion per annum to the state's economy over the next 12 years. Overall, broadacre farm cash income in Western Australia is estimated to have increased from an average of $312,700 per farm in 2015-16 to $340,000 per farm in 2016-17, which is around 90 per cent above the 10-year average for 2015-16. And 2017-18 is now looking even brighter.

After an erratic year of floods and storms and a mid-winter dry spell, Western Australia emerged as an unlikely bright spot in the nation's grain harvest, with an estimated 2017 harvest of between 12.7 million tonnes and 13.2 million tonnes. In stark contrast to the disappointing end to the season in the eastern states, many West Australian farmers can expect to return a profit on what could've been a disastrous year. For many, this profit has been boosted, with the state's largest grain handler, CBH Group, returning its largest ever surplus and biggest ever rebate to growers, following the previous season's record of a 16.6 million tonne harvest. In the 2016-17 year to September 2017, CBH generated a record surplus, before rebates, of $247 million, up 120 per cent on 2015-16. This enabled it to return a total of $156.3 million to growers through enhanced rebate offerings with more flexible options, an increase of 150 per cent on the previous year's rebates.

But it is not just grain that has seen an increase in farmgate values. WA wool auctions roared into 2018 with a year-opening, record-shredding two days of sales, producing the best results for woolgrowers in at least 20 years. Gross turnover at the Western Wool Centre during the opening week was $28,405,043 on 13,287 bales sold, with the average price per bale of wool coming in at $2,137.80. This is the highest Western Wool Centre turnover since June 1997, when the sale of 45,275 bales generated $34.3 million. However, back then, woolgrowers only received an average of $757.72 per bale of wool.

Perhaps this is why the latest Rabobank Rural Confidence Survey of 12,000 farmers across Australia found that West Australian farmers are going against the national trend of declining optimism. According to the report, net confidence for WA farmers' outlook on the performance of the agricultural sector over the next 12 months increased from 11 per cent in the December quarter to 23 per cent in March. This compared to a national net confidence rating of minus two per cent, down from 16 per cent in the December quarter, one of its lowest levels over the last four years. Only six per cent of WA producers held a negative outlook for the coming year, down from 11 per cent previously and compared to 21 per cent nationally. In WA, 61 per cent were anticipating conditions similar to last year, and 29 per cent expected an even better year ahead. As well as feeling more confident about their income outlook this year, WA producers have indicated their highest level of intention to invest in their businesses since early 2008. The year is indeed looking good already.