Opening address at ABARES Outlook conference, Canberra
3 March 2015
It’s a great pleasure to be here today.
Agriculture is at the core of any society that will prevail.
And without an agricultural economy, inordinate efforts or incredible alternate luck, must underpin that society’s basic tenet to sustain the population, maintain order, and find an alternate for trade to support our ancillary activities, health, law and order, defence and social security.
Through the history of mankind, civilisations have started or grown around the presence of an agricultural economy. The fertile crescent was known as such because of its capacity to provide cereals and other produce.
Rome created the opportunity for the maintenance of a global empire without compare when it secured the grain supplies of Egypt. England reached out to countries over the seas and sent people such as Joseph Banks to inform London of alternate agricultural precincts. The Soviet Union jealously guarded the agricultural capacity of the Ukraine and the Black Sea and some might suggest Russia still does.
Australia was a fluke of history. Its massive agricultural capacity remained undisturbed from global influence for tens of thousands of years, and indigenous society for that time was the sole and unobstructed benefactor. Even today, we remain with vast untapped capacity.
No, we are not going to be the food basket of Asia. We couldn’t even be the food basket of Indonesia. But we have had major advances from when Lachlan Macquarie took charge of an economy which, at that point in time, serious questions were being asked as to whether it was viable in the long term.
Great leaders and good governments of this nation have applied their minds to the sustenance and growth of our agricultural economy. And the actions of people such as Farrer have used their God given intellect to identify agronomic deficiencies and work out how to improve issues such as the yield of grain and the type of soils it grows in.
Builders in this nation, such as Deakin, Curtin, Chifley and Menzies, constructed dams or other water infrastructure that underpin both the food stock of hydroelectricity, whilst creating the offtake that further secured the requirements of the agricultural precincts of the Murray and Murrumbidgee.
In southern Queensland, taxation policy drove investment from an obscure, in Australian terms, and at the time little known crop called cotton to something that now rivals and at times exceeds production in wool.
This government, with its dams policy, its Northern Australia White Paper, and most importantly for this conference, the Agricultural White Paper, is already taking the next step.
Prior to discussing this further, I think it is important to give a report card of basic commodity prices and how we have gone thus far.
When we came to government the price of a live cattle steer was 165 cents per kilogram. The price today is 275 cents per kilogram. This means we have had a loading price 350kg beast of A$962.50, which means a 67% increase.
The price of grown steers 500-600 kilograms, through Gunnedah has gone from 160 cents average when we came to government, to 183 cents now, giving a sale price of A$1,098 for a 600 kg steer. This is a 14% increase.
The price of a bale of cotton in Australia when we came to power was A$425. And now it is A$525, a 23% increase. The price of an 18-24kg fat score sheep (mutton) has gone from 211 cents to 352 cents per kg, or around $84 live weight. This is a 67% increase.
Pork for a 60-75kg dress weight weaner pig has gone up slightly in tough international head winds from 308 cents to 315 cents, a 2% increase. Price for a 12-16 kg goat has gone from 209 cents/kg to 390 cents. This is a 87% increase.
Milk at the farm gate from Murray Goulburn has gone from 43.6 cents/litre to 44.64 cents, a 1% increase. Wool has not been so good, with 1% fall from 1,098 cents/kg clean to 1,090 cents. Horticultural products such as Cavendish bananas have gone from $12.76 a carton to $28.85 a carton, a 126% increase. Lemons have gone from $19.41 per 12kg box to $50.20 per box, 159% increase. Kiwifruit has gone from $19.50 per bulk pack to $27.50 per pack, a 41% increase.
Yes, we’ve had some disappointments too. Such as oranges, falling from $18.50 per 12 kg box, to $15.00, a 19% decrease. Cherries, down from $70.10 per 5kg carton to $42.00, a fall of 40%. Peaches are down from $13.50 per tray to $12.77, down 6%.
But one can say, all in all, that we have been part of an historical turnaround in agricultural prices. As an anecdote, I believe that my job is best expressed in the dignity it brings back to people’s lives at the farm gate. The whole purpose of my job and my department’s job is not about our own personal gains, our own personal misfortunes, or our likes or dislikes, but our desire as a team to work together to make sure that the people we are paid to serve prosper by our endeavours.
When people contact us to say that they have cleared their overdraft or have money for Christmas then the job is purposeful.
When a better return goes to the farm gate, the family can afford to renovate their kitchen, like other people in an urban environment renovate theirs. When a better price goes to the farm gate the family can go on holidays like other families go on holidays. When a better price goes to the farm gate the farmer can refurbish his plant and equipment, rebuild the yards, rebuild the fences, buy better genetics, improve pastures, increase their irrigation capacity, and as a collective, this refurbishes our nation’s capital base to support the requirements we so often hear – such as healthcare, childcare, pensions, defence, education, police, and might I dare say, our dear selves up on the hill and the bureaucracies around this town.
When we talk about general employment across this nation, and increasing the employment base, we must continually remind all that the largest manufacturing sector in our nation is meat processing. The largest employers in regional Australia are abattoirs.
When you go to an abattoir and see 600 people at work, or in some instances, thousands of people at work, you get the sense of how fundamentally important agriculture is in so many aspects away from the farm.
It’s better to be better at what you’re good at than try to conjure up skills we know other nations have an intrinsic advantage in.
We are good at agriculture. We are good at employing people in agriculture. We are good at research and development in agriculture. We have the highest yields of cotton in the world. We attain some of the highest prices for our agricultural product in the world because it is quality.
And in recent times the largest proportion of growth in employment has been in agriculture. But unless you have the farms that are producing the product then all else that follows is nought.
Agriculture is a noble pursuit. It does not benefit from the weakness of others. It does not leave people diminished. It is the essence of what feeds and clothes them. As such, agriculture must not only economically be a pillar of the economy, but morally must be a pillar of the economy.
As it is fundamentally tied to the future of our nation, it is my belief that it should remain overwhelmingly and unambiguously the domain of the Australian farming family. The Australian farm owned by mums and dads like you. This is not only my desire but overwhelmingly the desire of people from Blacktown to Geelong.
To this purpose we have reduced the level at which an individual must report to the FIRB when they purchase land—from its current level to $252 million non-cumulative. That means currently a person from overseas could by a $250 million property every day of the week and never have to tell anyone about it. To $15 million, and that total is cumulative. If you buy a $14 million place today and a $2 million place tomorrow, the second property will require reporting to FIRB.
The alternate government, the Labor party, in some mysterious diversion, have said that the level should go from $252 million to a unilateral level of $1000 million. Whether you’re in Blacktown or Boulia, Ipswich or Brewarrina, this idea is overwhelmingly rejected by the Australian people.
One of the greatest attributes our nation has is our clean green image. This is a selling point not only in Australia but overseas. In many countries that I’ve gone to, the reason the Australian product is preferred is not because it’s cheaper—it often is not—it’s because it’s cleaner. Recent events have highlighted this even in our nation. The Australian people have asked for and we will deliver a clearer country of origin labelling system. A system that is diagrammatic, simple, reflects the proportionality in the packet that comes from our nation, and that is compulsory.
Current ambiguities, such as made in Australia from local and imported ingredients, or made in Australia when it has not actually come from this nation, will be removed as this is a source of confusion to the consumer both here and overseas.
For our nation to take the next step we must invest in the infrastructure that underpins it, and this task has already started. The previous Coalition government put $10 billion on the table for the refurbishment of the Murray Darling Basin. You can go now to places such as the Macquarie Valley and see this immense investment already paying dividends, in straightened lined channels, telemetric measuring, and better irrigation plans. You can go to Mildura and see the start of an investment of over $100 million dollars in water infrastructure including new lift pumps for more effective water. You can go up the length and breadth of the Murray Darling Basin and see pivots, laterals and trickle irrigation taking the place of flood irrigation.
We invest around $700 million a year in R&D in agriculture. We make sure that our genetics remain at the forefront globally. Recently at Toowoomba, I was part of an announcement of $15m to keep PhD students involved in the process of following in the footsteps of Farrer and developing better disease resistance and high yielding strains of grain.
Dams are being constructed. From Chaffey Dam in the north to the most recent $120m investment in water infrastructure in Tasmania. This will continue to be rolled out in short order.
The Green Paper on Agriculture has been through the Cabinet and the White Paper is imminent. The Northern Australia White Paper intersects these two and likewise will soon be released.
People might ask why these have not been released soon and there’s a simple answer to that. We want these documents to be formidable. We want them to make a difference. We want them to be beyond the merely motherhood statements that adorn so many shelves and crevices collecting detritus and living obscurus per obscurum until they are finally shredded, purposeless and unread.
Ladies and gentlemen, I see this job as an incredible honour. I grew up on a farm, one of six kids, and my father in his nineties and my mother in her eighties still live on that property. I own a property myself. I don’t see this as a conflict of interest, I see this as a real motivation. I’ve made it my objective not to live or die to be a politician but to be judged as having made a difference. I am proud of this government because I believe for once it is actually doing that. I get a sense of purpose to stand next to a Prime Minister who actually wants to do something. Who is going to break away from what merely keeps him in a job and instead do that which, even if we are forgotten, leaves our nation in a better place. I believe that is the essence of a purposeful life.
My goal in agriculture is to make sure that whoever comes next, and I hope that is not imminent, that they have a foundation to further build on, so the great and unending work of building a stronger Australia, a country which can support itself, feed others, sustain what we believe is morally proper, and to be a beacon to others in the world, continues unobstructed.