Opening address: The Hon Barnaby Joyce MP
BARNABY JOYCE: Ladies and gentlemen, the real business of politics is not pithy lines or being good camera candy, or the sometime insanity, which is otherwise known as question time. The real business of politics is managing portfolios. There are few, I believe, apart from defence that come endowed with the same sense of noblesse oblige as agriculture and water resources.
Your purpose is to feed and clothe people, to make certain that those who perform this task are fairly remunerated, always striving for a better return at the farm gate. No matter where you add food to the global stock pile, somebody somewhere avoids starvation. Because of it somebody, somewhere stays warm because of the endeavours of a farmer.
The roles of other portfolios are vital, but few get the joy of standing in a paddock and seeing the wealth that comes from the vast renewable resource which is agriculture. Many other portfolios have an incredibly good reason to take money off the table, but agriculture puts money onto the national economic table. This task is paramount for economic well being, and will become more so by reason of the changed economic circumstances of our region.
On a global footing, we have a huge food and fibre task as the population grows to over 9 billion people by 2050. Our national goal should not be to provide the bulk, but to provide the quality.
Ladies and gentlemen, on that note, I welcome each of you to the 2017 ABARES conference. My fourth as agriculture minister, today as acting Prime Minister. I also note my old colleague, senator Ron Boswell. Why are you here?
[LAUGHING]
We gather at a time when Australia feeds about 60 million people. But if we do our part in the globe, we have to feed vastly more. As Southeast Asia, as one section of this global task becomes a more affluent society, they want that wealth represented in the clothes they wear, the watch on their wrist, in the car they drive, and the food that they place on the table. We take for granted our quality, but other nations by their own experience are rightly sensitive about what goes into their mouths and where it comes from.
What we sometimes term as exotic in foreign food, truth be known in their community they're probably known as poor people's food. If we have a choice between cow's udder and eye fillet you might go with exotic. But believe me, eye fillet tastes better and I've tried both. And surprisingly, once people start eating eye fillet they're highly unlikely to want to go back to cow's udders.
Wealth makes this experience of a desire for higher quality food ubiquitous across all sections of the globe. That means that we have to have the resources to produce that quality food.
Agriculture and water resources for me have always been a passion, a passion built on a seed bed of growing up on the land and still owning land and still being a farmer. Where your labours become the food and cloth of an ever-demanding global population.
If you reflect on those who attain wealth today and how they do it, you must admit there's something noble about the person who gains their wealth by feeding and clothing people, as opposed to exploiting people or preying on their weaknesses or massaging their conceits. And this has been a sentiment that's been constant through the ages, right back to Roman times where people talked about the nobility of people on the land.
Last week, the economic number-- there was also the economic nobility of Australia's agricultural sector was on full display as economically credible when the Australian national accounts figures were released. They showed that the industries of regional Australia continue to drive the nation's economic growth. Ladies and gentlemen, the trend growth to December 2016 was 23.7%. This is four to five times the economic growth of most other sectors in that analysis.
It's contribution to the 1.1% GDP growth of the quarter was 0.2%. No other sector-- no other sector-- contributed more than agriculture, forestry, and fishing. This is an important economic reminder to those who seek to disparage and ridicule agricultural and resource sectors. An important reminder to those who mock and snobbishly dismiss the concepts of farms property rights, the need to build new dams, or the vision of decentralisation. We in agriculture and water resources are delivering a vision for this nation.
This afternoon I will see dams being built in Tasmania. Ladies and gentlemen, we will create centres of excellence, such as RIRDC in Waggaand Charles Sturt University, which is now adding on to that and using it as a symbiotic mechanism of growth for that university. The GRDC Grange Research Development Corporation, that has-- will have its operations also extended to, so it works in Dubboand Toowoomba and Northam The FRDC in Adelaide.
We will set up a rule Investment Corporation. We have delivered an excess of a $4 billion Agricultural White Paper. We are part of the greatest turn around in agricultural commodity prices in the history of our nation.
At today's conference, it doesn't matter whether you're running the federal government, a national industry body, a representative body, a broadacre farm, you are all part of this incredible outcome. It's important to stop to celebrate, to promote, to learn from success, to look at the challenges that we have already risen to and to those that demand more attention, and to look at the challenges that lie on the road ahead of us.
This year for the first time, ABARES is forecasting that the gross value of farm production will go over $60 billion, coming in at $63.8 billion in 2016-2017. It leads slightly in the next year to $61.3 billion. The real value of agriculture production increased over three years to 2015-16 at an average rate of 4.5%. This is markedly better than what you'd get in a term deposit. And on top of that, you would have the capital growth in an landed asset to also add to your overall net return.
Smart wealth is moving into the agricultural sector because they recognise this. Total winter crop production is estimated to have increased by 49% in 2016-17 to a record 58.9 million tonnes. With summer planting almost complete, the total area planned is estimated to have increased by 15% in 2016-17 to around 1.4 million hectares, with total summer crop production forecast to rise by 12% to 4.2 million tonnes. Under this government, the total value of Australian farm exports has now increased by over $10 billion, from $38.2 billion in 2012-13 to a forecast $48.7 billion in 2017-18. This is an incredible 27% growth over just 5 years.
These are numbers that my vision is the Australian mum and dad at the kitchen table that they can avail themselves the wealth that properly remunerates the efforts and privations that they go through in running a farming enterprise. My philosophy in politics accepts but is not enthralled by the corporate farm. My passion is for the person-- that stoic person who by the sweat of their brow creates wealth from soil, and holds in their heart a love of our nation so dear that every town has war memorial reflecting their forebearers who either served or died for it.
So it's only proper that the real net farm cash income is estimated to have been-- that was estimated to be 2.57 billion 2015-16. This is well above the 20 year average to 2014-15, which was 15.6 billion. So from 15.6 billion to 25.7 billion.
Broadacre farm cash incomes are estimated to be the highest for 20 years, averaging at $216,000 a farm. Under this government, we've had some remarkable price turnarounds and volume increases. Here are some of the list that I could go on for pages if I wished to bore you to death.
As of last month, there's been around about a 100% increase in the price for Australian feeder steers at $3.20 for live exports into Indonesia. We have the highest wool prices since 1988, last week closing at 1,449 cents a kilogram, with wool exports valued at 3.3 billion in 2015-16, having over a 40% increase in land prices, over $6 a kilogramme dress weight, and 100% increase in mutton prices at $4.22 a kilogramme dress weight.
Sheep meat exports are worth over $2.2 billion in 2015-16, and live sheep exports worth another $226 million. There's 191% increase in the price of goats to over $6 a kilogramme. And with goat meat exports worth 226 million in 2015-16, up 55% from 2012-13.
Chickpeas in 2015-16 averaged $650 a tonne, over a 75% increase from the average price in 2012-13. A remarkable growth in chickpea exports to almost a billion dollars in 2015-16. Sugar is up to just under $0.20 a pound, or around $550 a tonne, a 33% increase since 2013.
Australian farming is booming, and we've had banks that have told us of record pay off of farm debt. And this is before we talk about the turnaround in wine exports, almond exports, tropical fruit exports. Even where there has been a downturn in an industry such as the dairy industry, prices are now stepping back up.
As I predicted in the past and was ridiculed for, I said that there would be a protein deficit, and prices of cattle and protein lines would go up. I'll make another bold prediction. I predict in the future we will have a fats deficit in the fats market, and we will be searching for global dairy product.
I refer to the golden age for agriculture, but in doing so I'm very conscious there are exceptions in some sectors. And we had an anomaly in the dairy industry, but that is now being dealt with. Dairy farms are saying to me now that they're going to have to pay tax, because the price of water and the price of grain and the step up in price for dairy product that they're going back into a taxable position.
The UN Food and Agricultural organisation has forecast significant growth in global food and fiber demand, requiring a 70% increase in food production alone by 2050 compared to average 2007 levels. That's not including fibre production. For example, growth will include grain demands of three billion tonnes per animal, up by a billion tonnes from current levels. Meat demand of 470 million tonnes per animal, up from 200 million tonnes from current levels.
In China, the real value of food consumption is projected to more than double between 2009 and 2050. Most of this increase will originate from urban, high-income households, given their rapid shift to more Western lifestyles to a more affluent position, and the transition of people from a rural circumstance into urban jobs.
In India where the value of food consumption is projected to more than double over the same period, diets will be categorised by increasing diversity. Higher intake of vegetables, vegetables of quality, fruit of quality, dairy products, and vegetable protein will be at a premium for this market. And the real value of food consumption Indonesia is projected between 2009 to 2050 to increase by more than four fold.
That is why it is apt for the portfolio of agriculture and water resources at this ABARES conference today to reside with the acting prime minister. This is not parochial. This is logic.
And it is disappointing, to be frank, there is a total lack of attention at times in this political discussion. A total lack of attention in favour of other issues, which make us neither richer nor poorer. We have got to get off the political glossy pages and to more substantial debates that will actually determine our nation's future. And water and agriculture most definitely fit this bill.
Since coming to office in September, 2013, the Coalition government has concluded the Korea Free Trade Agreement, which has already triggered four tariff cuts in a row, and seen agricultural exports increase by another $1 billion dollars to a total $3.2 billion. The Coalition government has also concluded the Japan-Australia Economic Partnership agreement, which came to effect in January 2015. We've already benefited from three tariff cuts into a market worth close to $5 billion for Australia with the next one due-- the next tariff cut due to take effect in April.
And we conclude with the China-Australia Free Trade Agreement, which took effect in December 2015, allowing two tariff cuts in quick succession and a third at the beginning of this year. China has become Australia's top market for agricultural, food, fisheries, and forestry exports, up 38% from $7.3 billion in 2011-12 to $10.1 billion in 2015-16.
Tariff cuts are one half of the story. The other is the ongoing management. That ongoing management that resides-- and I acknowledge the Secretary of the Department of Agriculture here today with my department, Department of Agriculture and Water Resources-- continuing to make sure that we get the flow through so that we can get those returns back through the farm back gate, back through to the mum and dads. So that when the requests are made for access of product, we go and work hard for that.
The recent gains include new market access to China with a 2015 protocol agreed for live slaughter cattle exports and protocols for Australian nectarines, new market access to Japan with an import protocol for table grapes signed in 2014, which helped increase exports over a 12 month period by-- wait for it-- 244%, and new import protocols for Australian melons, pumpkins, and related produce signed last year, new market access to Korea for blood oranges, and a revised protocol signed last year and market access for table eggs.
What this shows you, ladies and gentlemen, is that when you break it down, when you break it down to the minutiae, when you go to the sections, we have a Department of Agriculture and Water Resources that is working so hard to make sure that every sector-- not just the big ones such as beef and wool and grain, but right down to eggs-- that things are moving. Product is moving and people are getting paid more money.
The Coalition government has allowed farms to fully deduct the cost of water facilities, of fencing facilities, of fencing assets that are purchased, and to deduct the cost of fodder storage over three years. When you go through places such as Northern New South Wales now, you can't help but see the new sheds that are going up. This investment is flying back into towns, is flying back so that wealth is being disseminated amongst local communities.
We have improved the farm management deposits by increasing the deposit limit from $400,000 to $800,000 to deliver greater flexibility to manage income fluctuations, a suggestion that came to me at the Nindigully Hotel when I was discussing this with grain farmers. We have allowed these farm management deposits to offset other facilities that you take from the bank.
And now I call on banks, who are obviously tired of being seen quite a bit in the media, to honour this commitment of offsets-- to honour this commitment as a litmus test to their goodwill and their community obligation. I know that one of the greatest things you can have in a farm is your equity, and any form that you can use to get greater control of that equity by basically a tax deductibility for paying off your loan is a good thing for the long-term viability of that farm.
The Coalition reestablished an early access in drought provisions, allowing affected farms to withdrawal their farm management deposits within 12 months of deposit without losing their taxation benefit. Our plan for agriculture has included a $4 billion Agricultural Competitiveness White Paper, one of the most substantive pieces of agricultural policy that has happened in our living memory. 22 of the 31 Ag White Paper measures are now fully implemented. The remainder are well under way.
The White Paper on developing northern Australia also presents a vision and a practical plan to unlock the great opportunities in the north. Opportunities in the past that I believed through political correctness were derided and minimalised. Now we must be brave enough to go forth and develop them.
The Northern Australia White Paper will deliver $700 million for priority road projects in northern Australia, including $100 million to improve north cattle supply chains. We're seeing this roll out in such things as the Peninsula Development Road, which when I started had 600 kilometres of dirt. Now it's down to 200 kilometres of dirt.
We've put money on the table to seal the third road across our nation. In close settlement over around about 230 years, we've still two roads across our nation. One across Ngunnawal, one through Camooweal. At the last election, we put $100 million on the table to start sealing the third one to go from Winton down to Leviton. That's a vision that should be Incorporated in all sides of the political fence and driven forward with.
Country of origin labelling is a standard example also of White Paper delivery. It's now been through both houses. The new labels are easy to identify, meaningful, clear. Consumers will no longer have to search for country of origin information hidden in small print. And these changes will make it easier for families to see how much of their food is grown in Australia, and in turn make it easier to support Australian farmers.