Media Release

Production costs highlighted by White Paper process

5 June 2014

Agriculture Minister Barnaby Joyce today highlighted the high input costs facing the farming sector after reading a number of submissions to the government’s Agricultural Competitiveness White Paper.

"Australia's high farming and production input costs have emerged as a major issue for Australian agricultural industries and primary producers very early in this process."

Minister Joyce said Australian farmers receive the second lowest agricultural subsidies in the OECD and also face higher input costs for production than many of Australia's international competitors.

"While it isn't surprising that this issue should come through so strongly in the first round of submissions, it is of significant concern to me."

Minister Joyce said it was clear from the submissions he had read that our high costs of production were hurting large and small producers alike.

Sugarcane growers Maryanne and Michael Muscat’s submission outlined the significant challenges facing their farm business:

Input costs continue to rise every year but we cannot raise our selling price because we are ‘price takers’. Electricity, fuel, rates, steel, fertilizer, services, living costs, etc, are on the rise all the time...

Another submission from Georges Island Agriculture, based near Spring Ridge, New South Wales – in the Minister’s very own electorate of New England – listed a number of farm costs and examples of red tape administered by multiple jurisdictions that affected their profitability:

Rates, levies, duties and service costs have increased by percentages far in excess of farm incomes. Government legislation and compliance costs for such things as OH&S, chemical certification, licences etc creates too much paper work and use of time that is non-productive.

"This White Paper process is all about better understanding issues like this so we can create a more agile and competitive agriculture sector," Minister Joyce said.

Submissions from peak industry bodies to landholders as well as producers of all sizes cited a variety of input cost pressures ranging from labour market to energy costs, infrastructure and freight, regulatory burdens and third party certification frameworks.

"Clearly the submissions indicate to me that understanding the factors that influence Australia's agricultural input costs and finding ways to address these factors will be critical if we are to remain competitive internationally.

"Rising input costs will be a key issue addressed in the Green Paper, which is the next stage in the development of the White Paper."

The White Paper will identify pathways and approaches for growing farm profitability and boosting agriculture's contribution to economic growth, trade, innovation and productivity.

For more information about the Agricultural Competitiveness White Paper or to view public submissions, please visit http://agriculturalcompetitiveness.dpmc.gov.au.