2007: NFF Shaping up on the Big Issues

2007: NFF shaping up on the big issues

Address to the

Rural Press Club (Qld)

9 February 2007

Thank you.

And thank you to the members of the Rural Press Club for the opportunity to talk with you all today.

2007 is already set up as a major year for agriculture.

Not for many years has agriculture been so fundamental to the dominant issues of the day, capturing a central plank of the national agenda and national public attention.

Water and Climate Change are already dominant issues with both major political parties scrambling for the upper hand.

Labor, and new leader Kevin Rudd, are desperate to be seen as a fresh ‘in touch’ alternative to capture the ‘middle ground’.

Big on the right rhetoric, but lacking any real substance, so far.

Meanwhile, the Howard Government is playing catch up, and they know it.

ON WATER

On water, the Government presided over the National Water Initiative – which the NFF fervently supports – for three years, but it has delivered little in terms of action, let alone outcomes.

Sure, there has been, and remains, the usual ‘argy bargy’ between State Governments, and between State Governments and the Federal Government.

But this is no excuse for failure to deliver sensible, progressive water reform in this country.

The drought – the worst on record – has accentuated the need for action, sooner rather than later.

But it is to the shame of all our governments that party politics, bureaucratic processes and apathy have paralysed any real progress.

The PM’s $10 billion water package makes a splash to address this.

But from NFF’s perspective, frankly, we don’t care who ‘owns’ or ‘manages’ water resources in the Murray Darling Basin… we just want the National Water Initiative delivered so we can get on with it.

If the States come to the party, surrender their powers over water to the Commonwealth, and this streamlines action and delivery of the National Water Initiative, then great!

Either way, governments are over-due on their water account and need to get on with it.

Under the spotlight of a federal election, we’ll have to wait and see who’s ‘fair dinkum’ and who’s not.

The PM’s water plan also raises serious questions, which we need answered, before we can ‘sign off on’, or, if you like, ‘plunge’ into, any new regime.

The PM’s plan makes a lot of the right noises, but the details are still very murky.

QUESTIONS

We at NFF have several reservations and questions regarding the PM’s water plan.

As to the definition of ‘over-allocation’ – we need clarification of the assessment process.

For example, the baseline assessment by the National Water Commission is that only 3% of surface water management areas, and 5% of groundwater management areas, are over-allocated.

The National Water Commission has already highlighted the discrepancies between State Government definitions, and therefore the level of over-allocation, and that of the Federal Government’s estimates, as a major issue.

What does sustainability mean for irrigators? How is the Government going to measure it?

What does the Government mean when referring to ‘non-viable’ and ‘inefficient irrigators’? How will this be assessed?

Where have the estimates of water savings through efficiency gains (approximately 2,500 gigaliters), come from?

We know the report talks of current delivery efficiencies averaging 75%, with a view of attaining 90% efficiency.

However, industry figures suggest that delivery efficiency is already at 87% for some corporations.

If accurate, this will seriously limit the level of water savings the Government estimates it can make.

So, where does this leave us?

It also appears that the Government is proposing to reset water sharing plans and the Murray Darling Basin Cap.

This means the certainty around State water sharing plans is now in disarray and we need clarification of the ongoing nature of irrigator’s ongoing property rights, as a priority.

And what does this mean for the property rights assigned under the current arrangements?

The NFF is prepared to look at a water buy-back framework to address over-allocation.

But we have questions surrounding third-party impacts, particularly in light of Government views on the removal exit fees and, more broadly, the details of such a framework.

We need more information on the proposed integrated water allocation system.

It appears the Government wants to manage annual allocation against water licenses.

Does this mean the Australian Government will be doing the annual allocations?

If so, what does this mean for State Government jurisdictions?

The last thing farmers need is uncertainty in water rights and water allocations.

And that’s exactly what we have.

This undermines delivery of the key tenants of the National Water Initiative – being an effective and efficient water trading market that gives farmers certainty and security in water entitlements.

The $10 billion water plan is the PM’s baby, but we don’t want the National Water Initiative thrown out with the bath water.

We expect to have these, and other questions, answered… sooner – rather than later.

The NFF cannot make any sensible assessment of the PM’s proposal before the blanks – and there are many of them – are filled in.

ON CLIMATE CHANGE

On Climate Change, the Government has been a reluctant and recent convert.

Dragged kicking and screaming to recognise and engage on the issue.

Late last year, the Prime Minister appeared dismissive of Climate Change.

The NFF, along with a chorus of others – not to mention an opinion poll or two – have stung the Government into political reality in 2007.

This week, the PM, for the first time, acknowledged the scientific evidence that Climate Change is real, following the UN Intergovernmental Panel on Climate Change report.

Promising progress, but, sadly, the Government still doesn’t ‘get’ the importance of the threat of Climate Change to agriculture.

Or the vital role agriculture has already played, and stands to make in the future, in mitigating, adapting and finding long-term solutions to, Climate Change.

The Prime Minister has deliberately carved agriculture out of his emissions trading taskforce.

The NFF has sought to engage, but we have been told we’re not welcome.

This is an extremely short-sighted and ignorant position for the Australian Prime Minister to be taking.

According to the Australian Greenhouse Office, over the past 15 years, Australia’s primary industries have slashed carbon emissions by 40%.

That’s a dramatic and impressive turnaround. Most of it has been delivered by agriculture.

Not only have we put a halt to land-clearing, but going the other way, the Australian Bureau of Statistics tells us that Australian farmers plant over 20 million trees a year, purely for conservation purposes.

Modern farming has embraced environmental sustainability with fervour.

And it’s easy to see why.

It protects our land, protects our productive capacity and allows us to be more proactive in managing our natural resources on-farm, which, in turn, fuels our profitability as viable, resilient and sustainable businesses.

This week we again called upon the Howard Government to realise the significant contribution agriculture stands to make in meeting the challenge of climate change.

This is not simply an issue for the mining, stationary energy and transport sectors, as the Government’s leaning to-date suggests is their sole approach.

The Government needs to make a significant investment in all our futures and must include agriculture as a fundamental part of any genuine tilt at a climate change solution – anything less will be to the cost of generations to come.

It is perplexing that the Government’s response to Climate Change, seemingly, deliberately excludes agriculture.

Australia’s farming sector has already made a massive and tangible contribution, and we can do more.

Our door remains open, if the Prime Minister’s mind is open.

FEDERAL BUDGET

I want now to come back to a few ‘nuts and bolts’ to give you a flavour of the strategic agenda the NFF is pursuing this year… at least, the first half of the year.

Yes, it’s an election year, but it’s also an election Federal Budget to be handed down in May.

That’s our first cab off the rank.

Water and Climate Change will be key issues in Federal Budget considerations and will, undoubtedly, be key federal election platforms for all political parties – and the NFF is position to give everyone a hard time.

In fact, not for many years has the NFF been so proactive, in a strategic sense, to position agriculture ahead of major issues.

We’ve been engaged with government, opposition parties, government departments and third party organisations for many months leading up to what is already an important, challenging and potentially rewarding 2007.

NFF’s 2007 Budget submission calls for a “generational shift in thinking”.

We need to lay solid foundations for maximising the sustainability of Australian agriculture, through five key NFF pillars:

• Capacity building (including drought management),
• The environment,
• Supply chain efficiency,
• Labour force flexibility, and
• Biosecurity.

Each of these, in their own right, is vital in underpinning the sustainability of agriculture.

But when looked at holistically, in a package of measures, it’s a powerful and compelling case for investing in a sustainable future, today.

A significant investment across all five of these areas will not only strengthen the farm sector, but also serve the economic, environmental and social interests of the nation.

Can I also say that the Australian Government has already endorsed the NFF’s Environmental Stewardship initiative – moving from a regulatory-based framework to an incentive system that recognises the important role farmers play in natural resource management.

This is a revolutionary program to deliver environmental outcomes through profitable on-farm solutions.

We believe our Environmental Stewardship program should be the centrepiece of the Government’s National Heritage Trust, to be funded under the coming Budget.

CAPACITY BUILDING & DROUGHT MANAGEMENT

The NFF supports the raft of agricultural programs, packaged as Agriculture Advancing Australia, which aim to assist farmers be more competitive, sustainable and profitable.

We are seeking a renewed commitment from the Australian Government in continuing these programs, which are now up for refunding.

These include:

• FarmBis training – assistance for farmers to undertake business and natural resource management training.

• Rural Financial Counseling Service – providing grants to state, regional and community level organisations to provide financial counselling to primary producers who are suffering financial hardship.

• Farm Help – providing short-term financial assistance to farm families who are experiencing severe financial difficulties and cannot obtain a loan from a financial institution.

• Farm Management Deposits Scheme – a tax-linked, risk-management tool which allows primary producers to deal with variable incomes, and

• Industry Partnerships Program – a program to develop skills and structures to improve industry and organisational capacity.

These are important avenues for farmers to access in dealing with the day-to-day, unique needs of running a farm business.

As for drought, the NFF’s first priority, as it should be, throughout the prevailing drought has been to provide an effective social welfare ‘safety net’ to those most in need through Exceptional Circumstances, make EC more flexible and accessible for farm families, and provide targeted business support to maintain productive capacity.

These priorities were reflected in the Australian Government’s response to the drought last year. We guided and informed the Government’s response and welcome those initiatives to alleviate the immediate pressures of drought.

Looking forward, however, surely it’s time for a more strategic and longer-term vision for dealing with drought?

At NFF, we see this as a clear necessity.

In the shadow of Climate Change, and all Australian’s now looking upon water as a truly precious commodity, gearing Government priorities, policies and programs towards drought management, recovery and future drought preparedness, is the only sensible tact to tack.

This is a major component of NFF’s ‘sustainability’ agenda for the 2007 Federal Budget.

Our approach is to shift the policy paradigm from drought relief to drought management, recovery and, ultimately, drought preparedness.

That is, to see Government and farmers in a partnership to invest in managing normal drought risk and, within reason, working together with farmers in creating better buffers for future drought events.

I would note that the Prime Minister’s recent $10 billion water package picks up on these threads. If it come to fruition, and the details are eventually laid out for us to examine, we may well find that this approach to drought-proofing the country can be delivered through that initiative.

We are maintaining a watching brief on progress there.

THE ENVIRONMENT

As I mentioned earlier, the NFF’s Environmental Stewardship program is fundamental to delivering sound, market-driven natural resource management to fund landholders in achieving environmental outcomes on their properties in line with community aspirations, via agreements between the landowner and the Government.

This is a key part of NFF’s Budget submission.

Farmers occupy 60% of the continent.

Therefore, they are at the frontline in environmental management.

The direct engagement of farmers in the delivery of natural resource management outcomes for more sustainable production, while also delivering benefits for the community at large, is critical.

It has widespread policy and public appeal.

We look forward to seeing this reflected in the Treasurer’s Budget night address.

SUPPLY CHAIN EFFICIENCY

No surprise that agriculture relies on efficient transport for delivery of fresh produce to domestic and world markets.

An integrated approach to transport – across road, rail, air and sea systems – is essential to ensure each link in the chain is optimised.

Upgrading our key rail networks, particularly for non-bulk and containerised freight, to ensure competitiveness, is essential.

We need national uniformity in standards and procedures for road and rail regulation.

We need to bolster inland-based transport systems, investing in local level transport infrastructure, and create freight hubs.

We need to up-scale shipping port capacity to meet global needs.

All of these simple, yet necessary initiatives, would tie together our out-dated transport system and greatly enhance Australia’s competitive edge.

Similarly, the National Food Industry Strategy is crucial to maximising ‘whole-of-chain’ development, efficiency and growth in an increasingly competitive global market.

In other words, we need to harness our whole-of-chain production infrastructure, resources and systems and mesh them in a dedicated, interwoven efficiency-maximising framework.

It should have happened years ago.

LABOUR FORCE ISSUES

Agriculture depends on a workforce with the skills and flexibility to address seasonal production and processing.

Regional labour peaks, over and above normal management, require a flexible approach to labour supply that can be delivered through short-term arrangements.

To encourage foreign resident workers (particularly into horticultural), the NFF wants the applicable tax rate lowered from 29% to 13% – in line with that of Australian residents.

This encourages increased income and spending in regional Australia, while bolstering access to a more flexible and growing labour force. It also comes at no cost to the taxpayer or government revenue as the government’s purse must reimburse working holiday makers when they leave the country.

Clearly, attracting these workers, and getting them to spend more of their ‘hard earned’ as they travel regional Australia, is a win-win for the sector.

BIOSECURITY

Australia is free from many exotic plant and animal diseases and pests and our agricultural products have worldwide competitive recognition flowing from this.

The NFF welcomed the adoption by the Australian Government of changes to the Import Risk Analysis process and we will closely scrutinise outcomes from the changes.

What we now need is additional resources to cover the expanded role of the Eminent Scientists Group, as well as more resources into the Department of Agriculture, Fisheries and Forestry to manage and monitor progress of the improved Import Risk Analysis process.

Put simply, having adopted the changes the Government must now provide the resources to see the program delivered effectively.

FEDERAL ELECTION

Having outlined our key Federal Budget push for 2007, I hope you can see the strategic policy positioning we’re building for the rest of the year… into a federal election – which we suspect will be after the Federal Budget.

Most of these issues, and all of the themes surrounding them, will be the emphasis for the NFF’s strategy for the federal election to massage the best possible outcomes for Australian agriculture.

I’m not going to get into the nitty-gritty of our election strategy today – these things evolve and change over time and we’re still, I think, a fair way from polling day.

COMMUNICATIONS

Instead, I think it’s worthwhile tying together the threads I’ve talked about today.

I’ve talked about Water, Climate Change and the five pillars of our Federal Budget agenda.

I’m sure you can see the synergies in themes, messages and direction.

This has been orchestrated to fit nicely, down the track, with our federal election priorities.

Supporting these policy imperatives, always, is NFF’s Communications Strategy.

Since March 2006, the NFF’s communications have undergone a complete overhaul.

In tackling all of our issues – be it the environment, trade reform, drought, or whatever – the NFF has been, and will be, steadfast in strategically and positively positioning agriculture and its significant contribution to a modern Australia.

We’ve taken a strategy to more effectively communicate the agricultural story to metropolitan audiences.