Farming future under threat and demands immediate attention

I rise to speak on a motion that I have moved. There has been much debate around the world about food security in recent years.

This debate has centred mainly around the need to feed a world that is expected to contain nine billion people in a few decades time.

In Australia the debate has mostly centred around how our food producers can contribute to that global food demand. The level of debate and concern this year forced the government to develop and release the national food plan green paper.

However, the paper, like the government, unfortunately is long on rhetoric but short on substance. It is a paper that demonstrates again no understanding of the problems facing food production and food producers in Australia.

The problem is not complex; it is simple market economics. If a business cannot make a profit then the business closes, and frequently that is what is happening to agriculture and food producers in Australia.

On the land we need to make sure that every hectare counts, but many of those doing the work cannot make a living. According to the Western Australian Department of Agriculture, the broadacre region of Western Australia averaged a rate of return to capital of around two per cent over the period 1998 to 2002-03.

In comparison, the business world usually works on a minimum acceptable rate of return, or the hurdle rate, of around 12 per cent. There is no doubt that the income drive from food production does not reflect in any way, shape or form the amount of investment required or the work or risk involved.

Farm incomes compare poorly to the average Australian income, as demonstrated by the fact that farming families are overrepresented in incomes under $52,000 a year. Members should know that many farming families exist on the income equivalent of welfare incomes despite arduous and often dangerous working conditions.

We take these people for granted and expect them to keep producing some of the best quality food and fibre in the world. This should be of significant and pressing concern to the government. But worse still is the number of farming families with a negative income.

So how does the government’s green paper demonstrate its understanding of these issues? Well, it does not.

The government never puts the words ‘farmers’, ‘growers’ and ‘viability’ together in the 274 pages of the green paper—not once. There is no link even between farm viability and market access in that paper. Nor does it mention rising costs of production, nor farm-gate price, nor return on capital. These are core issues for those in the food production sector.

It has one mention of return on investment, but that is in relation to production in other nations. The carbon price is mentioned six times, but it is never mentioned as an additional cost of production for farmers.

I read in recent weeks that the managing director of Coles visited Perth to try to mend some of the bridges the company has burned with our farmers and farm producers.

The coverage quoted Mr McLeod as saying: ‘In the last four years we have seen food deflation for the first time and that is because we are working with suppliers at becoming efficient.’

As a farmer said to me on Saturday night, what this actually means is that Coles is working at driving down prices for our suppliers, meaning food producers are looking at further cuts.

It strikes me as odd that a man the newspaper has said has earned more than $43 million in salary and bonuses in last four years, which apparently included $15 million last year, appears to be so strongly opposed to farmers making a commercial return.

I look at the cuts the government has made to research and development which aims to improve the productivity of farmers, to assist them in continuing to improve their productivity.

Improving productivity is the key to what farmers need to do. Cuts that the government has made in a range of core programs certainly do not help food producers in this country.

Year upon year, productivity of our farmers has been 2.8 per cent compounding, but in recent times it is back to one per cent. This is why the R&D component is so important, Madam Deputy Speaker.

I am very concerned about the viability of farmers, as are those who speak to me on a regular basis.

I would encourage other members in this place to get out and actually talk to those doing the work, those who have no capacity to pass on the additional costs of production such as those through the carbon tax, for one example, red tape and green tape.

Every cent that adds to growers’ costs of production means they are less likely to be able to produce the food and fibre we need into the future.