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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-03-06 Daily Xml
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WHEAT CROPS

Mr VENNING (Schubert) (15:30): Recent events, both economically and meteorologically, have caused much reflection on the worrying time ahead for all South Australians. I am raising this matter today triggered by the realisation that wheat could reach $1,000 a tonne this year. That is the forecast.

Mrs Redmond interjecting:

Mr VENNING: It certainly would or will. Normally this would cause great jubilation for farmers, but the contrary is true. Today is the last day in the parliament prior to the Easter break and we return on 1 April. If we do not get some appreciable rain before then, it will be very concerning indeed. The drought continues and many farmers are facing the dilemma of trying to put in a crop this year after two disastrous years and thin ones prior to that.

Farm debt levels have skyrocketed to an all-time high, not just because of poor or zero returns from the crops but because of losses in the grain-trading fiasco in mid to late 2007 when forward selling and the subsequent season failure left many thousands short on their contracts—contracts that either had to be paid out or transferred over to this year. Either way, it is a huge millstone around the necks of battling farmers. Banks have pulled back in many instances, refusing to finance the cost of putting in a crop.

As if this were not enough we now see the largest increase in farm input costs ever which have risen 70 per cent in the past 20 months. Fertiliser has gone from $550 to $1,150 a tonne. In fact, today the member for Stuart heard of a case where it was $1,300 a tonne. That is massive and cannot be justified. I understand there is some action pending on that matter. Fuel has gone from 85¢ to $1.45 a litre. Glyphosphate, which is Roundup (or Zero for the home gardener), was $4.50 a litre this time last year; it is now $11 a litre—way over double. Other farm chemicals have increased by approximately 5 to 10 per cent. Fencing materials have gone up 100 per cent in the last two years; predictions are that they are about to increase further. Second-hand machinery is now very hard to sell, making the cost of changing over or upgrading too expensive for many.

The cost of labour has also risen—when you can get it. It is hard to find good people to work on a farm as many are entering the mining boom and when you can find good workers, they want a high wage. On top of all this, now we see—thanks to the federal government—a huge hike in the cost of heavy vehicle registrations which will mean big rises in freight costs. This is only going to further compound the stress already felt by our farmers. How much more can an industry take?

Farming was becoming marginally viable 20 months ago. What is it now with all these costs? Think of the huge bank interest bills farmers are incurring just to keep going. Grain will become more expensive because it will be in short supply. You cannot afford to grow it in much of South Australia now, only in the sure areas, well inside Goyder's line. Seasons 2007 and 2008 show quite clearly where this new line is, this area: those who got a crop of note, and those who did not.

There is already a big move back to sheep in most of these areas, low-cost, low input, income reliable but not really fantastic. Farmers are playing it safe because they have to. Grain, particularly wheat, could reach $1,000 a tonne, at least on paper, because it will be in short supply. This flags a big problem for Australia; a shortage of wheat and barley flags emergency signs for all of us. It has been 75 years since we had food shortages in Australia. What will it do for our export regimes?

It is worse now because who controls the grain? Now we have international traders controlling the market. Before we had one authority, the AWB, controlling wheat and the ABB for barley as statutory authorities governed by the parliaments, empowered by legislation to regulate both the domestic and overseas markets which had to guarantee carryover stocks in case of shortages. Will we be like Brazil with its beef industry? When it gets too expensive for the locals, they just ban the export of beef. Are we going to do that here?

What is the solution? The government has to ensure that the acreage sown to wheat, barley, pulses, oil seed, etc. is maintained, and the only way they can do that is to do what they did back in the 1930s, forties and fifties—subsidise farm input costs. It is not only the farmers growing crops who are experiencing these hardships; it is the dairy farmers as well. We had the fertiliser bounty back then; I think it is high time to start at least discussing that because I do not know what else the answer is. If anyone else has got any answer to the problem, I am all ears. I do not think you can do anything else but subsidise farm input costs. I hope the government is listening.

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