Tuesday, December 10, 2013

Hunt Blog Newsletter 11 December 2013

“From Little Acorns Mighty Oak Trees Grow”

Walking the Talk
The Coalition Government’s White Paper on Agricultural Competitiveness

Congratulations to Agriculture Minister Barnaby Joyce and the National Party for continuing to walk the talk on rural industry issues.

The new government is only into its third month in office and already the National and Liberal Coalition Government has acted in the national interest and blocked the proposed takeover of the agriculture infrastructure company GrainCorp which is so vital to the economic interests of Australia’s grain growers and called for the overdue inquiry into the MLA levy structure.

Free trade negotiations with South Korea and China have also been given priority by the new Coalition Government and the free trade agreement with South Korea was signed four days ago. 

Under the free trade deal with South Korea tariffs will be eliminated on Australian agricultural exports, including beef, wheat, sugar, dairy, wine, horticulture and seafood, as well as resources, energy and manufactured goods.

The Centre for International Economics modeling shows that the South Korean free trade agreement will be worth more than 5 billion in extra income to Australia in the 15 years between 2015 and 2030.

Warren Truss, Deputy Prime Minister and Minister for Infrastructure and Regional Development made a deliberate choice after the last election to retain this portfolio which is so vital for the long-term interests of rural and regional Australia.

A further  demonstration of the National Party and Coalition determination to bring about the necessary changes for rural  and regional Australia, if one is needed, can be found in this weeks announcement by Agriculture Minister Barnaby Joyce of the terms of reference for the Agricultural Competitiveness White Paper announced by Prime Minister Tony Abbott prior to this year’s election which sets out to put in place a strategy to double the Australian agricultural production by 2050.

Barnaby Joyce has rightly recognised that farm gate profits must rise if Australia is to take advantage of the growing Asian food markets.

As the Australian press have noted, the Agricultural Competitiveness White Paper will put the supermarket duopoly payments to farmers under the microscope and focus on the need to attract more domestic capital, as well as foreign investment, into the agricultural sector.

Part of Barnaby’s strategy is for a review of the tax treatment of farm investments to encourage Australian investment and super funds to commit capital to the rural sector so that Australians can take advantage of the Asian food bowl opportunities.

Barnaby also stated that the White Paper was about opening up new tracts of land on multiple fronts suggesting that this might lead to shifts in crops currently grown in existing agricultural areas to the new operations in the North .

One example given by Barnaby Joyce in this regard was the possibility of cotton production moving further north while citrus production might move south suggesting that this would allow for less efficient trench irrigation to be replaced with more efficient trickle irrigation which would boost overall  productivity.

Barnaby noted that his home town of St George had been transformed through irrigation from grazing to a cotton production centre employing about 6000 people over the last couple of decades.

Barnaby’s cotton production moving to the north vision fits perfectly with the Flinders River/O’Connell Creek cropping proposal developed by the Richmond Shire Council for the establishment of 190,000 mega litre irrigation dam to be located on only allocated State land with a cropping area within 20 km of the Richmond Township .

Richmond Shire Council has identified a number of potential cropping opportunities which have been successfully trialed in the area including cotton, rice, chickpeas, mung beans, sorghum maize and a host of others and note that the irrigation can be a mix of flood, centre pivots and trickle irrigation systems.

Recent coalition government actions on foreign investments and announcements on review of red meat industry organisational structures and Barnaby Joyce’s Agricultural Competitiveness White Paper strategy sits comfortably with the Strategic Plan for rural and regional development which arose out of the Beef’s New Direction Forum held in Armidale in February 2010 and was launched at the Rockhampton Beefs New Direction Forum held at Paradise Lagoons in August 2010.

The Paradise Lagoons 2010 Beefs New Direction Forum  was addressed by the then Senator Barnaby Joyce and Senator Bill Heffernan as well as Dr Julian Cribbs, the author of The Coming Famine book that predicts that  global demand for food will more than double by 2050 due to population growth and improved diets in industrialised Third World countries.

The Paradise Lagoons New Direction paper:
·        set out details of the decline in the number of Australian farms and rural workforce in the previous 40 years
·        identified the  decline in cattle industry profitability over the last 40 years
·        identified the increasing level of government influenced costs and charges paid by beef producers during the first decade of this century
·        identified the accountability and efficiency flaws in the red meat industry organisational structures that  were put in place in the 1990’s, and
·        noted the need to reform those structures to make them relevant to the collective needs of the industry in the 21st century
·        identified the problems facing Australia’s agricultural sector as a consequence of the then current resources boom with higher interest rates and a higher Australian dollar and uncompetitive government influenced rural costs and charges compared to the subsidies and financial support given to Australia’s foreign competitors by their governments
·        noted that unlike Australia’s Chinese and Brazilian counterparts, Australian farmers no longer had access to long-term “patient” development bank finance and,
·        noted that consequently Australian rural industries could not access funding for expansion and innovation to take advantage of the coming Asian food bowl boom whilst foreign state-owned and foreign companies arrived to utilise cheap government subsidised interest loans to buy up depressed Australian rural assets
·        concluded that the productivity of Australian agriculture must be viewed not only as an economic imperative but as a matter of national food security

The Paradise Lagoons Strategic Plan set out a strategy to:
1. increase profitability in the cattle industry and rural Australia by
(a) increasing domestic and export demand for better quality product and
(b)increasing domestic competition by decreasing the power of the Australian supermarket duopoly, and
 (c) reducing the burden of uncompetitive government influenced costs and charges on the Australian red meat industry

2. implement industry organisational restructure by streamlining and improving the efficiency of the current industry organisations  and reducing unnecessary duplication of  services to improve beneficial outcomes for industry and reduce unnecessary costs ,

3. introduce taxation reform to encourage Australian capital investment into rural and regional Australia

4. establishing a development bank along the lines of the previous Commonwealth Development Bank to provide long term development finance for rural and regional Australian industry

5. provide the water, power and communication infrastructure necessary to attract business and people to regional Australia in order to put the people where they’re needed to produce the necessary food to feed the world rather than on the coastal fringes where 75% of Australia’s population currently live.

One of the key objectives of the Paradise Lagoons Strategic Plan was to form a coalition of producers, agricultural and mining industries, rural businesses and Shire Councils to develop policy and influence government to encourage infrastructure investment and reverse the population decline in rural and regional Australia.

The  following terms of reference for the Agricultural Competitiveness White Paper released yesterday are four square with the rural profitability issues and reform proposals set out in the Paradise Lagoons Strategic Plan:
(a)    food security for Australia and our overseas customers,
(b)   improved farm gate returns for Australian producers
(c)    drought management ,
(d)   access to rural capital investment
(e)    farm debt levels and debt sustainability
(f)    supply chain competitiveness and its relationship to food and fibre processing and fair returns to producers
(g)   critical rural and regional infrastructure investment
(h)   jobs growth
(i)     skills training and education and human capital investment in the agriculture value chain
(j)     research and development
(k)   effectiveness of regulations affecting the agriculture sector and the extent that those regulations promote or retard competition, and
(l)     market access

The Richmond Shire Council Flinders River/O’Connell Creek cropping proposal also fits four square with the Paradise Lagoons Strategic Plan which proposed the bringing together of a coalition of regional interests, including Shire Councils, to halt the decline of Rural and Regional Australia and provide the population, workforce and infrastructure necessary for rural industries to produce food to support an increasing Australian and global population.

The 1200 participants at the February 2010 Forum in Armidale and the 500 cattle producers who attended the August 2010 Rockhampton Paradise Lagoons New Directions Forum should take heart that their voices did not fall on deaf ears.

Clearly, Minister Barnaby Joyce and Senator Heffernan and through them the National and Liberal Parties and Prime Minister Abbott, listened to the voices of the grass roots producers and now to their great credit they have moved to address the issues within the first three months of obtaining office.

As HuntBlog noted in its 20 September Newsletter -From Little Acorns Mighty Oak Trees Grow.

More pertinently, Australian rural producers now seem to have National Party representatives in the mould of its Country Party origins and such legendary Country Party figures as Black Jack McEwen, Doug Anthony, Ralph Hunt and Peter Nixon who were prepared to stand up for rural Australia and walk the talk and deliver outcomes rather than just mouthing platitudes to placate what Charles Massy identified in his book 'Breaking the Sheep's Back' as the unwashed peasantry and keep them in their place.

A full copy of the Paradise Lagoons Strategic Plan can be viewed at www.huntblog.com.au

A copy of the Terms of Reference of the Agricultural Competitiveness White Paper can be viewed at http://agriculturalcompetitiveness.dpmc.gov.au/terms-of-reference

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