Increased funding promised for farming research and development

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.