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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-03-20 Daily Xml
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Agriculture Industry

Mr PEDERICK (Hammond) (12:29): I move:

That this house—

(a) recognises the significant value of the agricultural industry and thanks those primary producers who secure over $17 billion per annum to the South Australian economy;

(b) notes that the sheep industry is forecasting the worst fall in prices since 2014, policy-induced disruptions to the sector, and the highest cost of doing business in history; and

(c) calls on the Malinauskas Labor government to condemn the policy actions of the federal government, which is harming the sheep industry and the agricultural sector more broadly.

We do need to acknowledge our primary producers and, as I have many times before, acknowledge that my forebears have farmed in South Australia since 1840, setting up in Plympton first, then moving out to Gawler River and Angle Vale, and then presently at Coomandook where I am in the twentieth year of leasing my property out, and still happily live there and try to keep the motorbikes up to my two boys.

The people in agriculture are all risk takers. They do not need to go to the casino to gamble. They take a gamble every year. Prior to this last 12 months, it is something we probably have not seen in history. Certainly, my father, who left us nine years ago at the age of almost 95, had never seen it, where there was probably about five years in a row where things were pretty good; wool was up, meat prices were up and grains were up. You still had to work diligently to get those rewards, but all the satellites were aligning, which I can assure you pretty well never happens. It never happens. Obviously, that depended if you got rain or you had access to water for irrigation—if that is what you are into—and there have certainly been, notwithstanding, some key struggles in the wine sector.

Just on the wine sector, for the last vintage—and I hope it is better this vintage on the news that perhaps China is getting back on board—grapes from my area in Langhorne Creek were being harvested and put on the ground in some places, and we can also note that the Barossa had the same effect, and this was probably happening in most winegrowing areas. This is a scary thought—but noting the glut of wine. There are about four years of wine in vats across the state and the country, so there is no quick fix for that anytime soon.

Agriculture is getting to be a very expensive pastime to be involved in. I saw on one of these wonderful channels that most of us watch now on Instagram that the new John Deere tractor of 830 horsepower is $US1.2 million, so I would say that is about $2 million here. Obviously, you would want to have a fair operation to be buying one of those, but that just goes to show the level of input that some people have to do, and that is just for a tractor.

I note a lot of my friends at home have upgraded to self-propelled spray units. A lot of these now are retailing at $900,000, close to $1 million new, so they are buying second-hand units where they are still paying $300,000, $400,000 or $500,000. You can well and truly put a harvester in the paddock for about $1 million. I have a friend of mine who has a Gleaner. We call them whiz-bangs. They go whiz and then they go bang. Look, they can reap a lot of grain, but the problem with something like that Allis-Chalmers is that there is not a lot about, and so it is hard to get parts. It is hard enough for anyone at harvest time to get parts. I know from history.

Equipment is expensive. It is a massive input on your land, and buying land, and it is alright if you are getting out of farming, but land is reaching huge prices, and it is the big farmers who probably most of the time have only got the ability to expand. Certainly in our area if you do not have probably a minimum of 3,000 or 4,000 acres, you are not going to make it, and that is going to be a small farm or it probably is already. I know people who started from scratch years ago and they have built up to 9,000 acres and they will have to keep going because they have said, 'We want to put both our son and daughter on the farm,' which is very commendable.

The inputs keep on going. If you look at not just the inputs for machinery but also the inputs for chemicals, obviously the more acres or hectares you do, whatever language you want to use, the more you have to spend, and if you have a dud year you can go down the tube pretty quickly. I have seen major corporations in farming in Western Australia that have been cropping 80,000 acres fall over because they have had a couple of bad years and cannot keep paying the bills. If it is not chemicals, it is fuel and it is fertiliser, and that can be a lottery sometimes. You have to be right on it, making sure you have the orders in to get that in.

With shearing sheep—I do not think I will do another day of it because that might kill me—but now just for the shearer it is about $5 a head. Someone said to me the other day that to pay for the sheep going through your shed costs about $13 per head. That is why some farmers are going to sheep that do not need to be shorn, sheep that shed wool, and I certainly commend the young blokes and ladies who are involved in the industry locally. They are real go-getters who have got into the industry and you can tell they are successful as they are driving Dodge Rams and other vehicles. They are getting in there and having a go in a tough job. I am really pleased that people are willing to either pick up the handpiece or work in the sheds as roustabouts.

Last year we saw a dramatic decline in prices for both sheep and cattle. Cropping held up pretty well, notwithstanding the seasons, but sheep and cattle plummeted during last year, and especially towards the end of the year in regard to sheep. They have had some level of recovery. A lot of people are in the business of trading stock, and a lot of people, especially with big mobs of cattle, got really caught out. They paid too much for cows and calves, pregnancy tested, and they just had to find a way to hold them to get out of them because, otherwise, if they sold them they were going to lose hundreds and hundreds of dollars per head and it would probably almost sink their operation. We have people who operate major feedlots across the state and work hard to turn out stock to put into meat processing facilities.

So there have certainly been some drops in the sheep and cattle markets. Some of that, as I said, has come back, but it is tough. It is a tough business out there. It is about making sure that you have the feed to feed them and, if you have had a bit of a tough year, you will not have the feed, and if you have not grown the hay, you will have to purchase it. One thing that is affecting stock prices is the constant attacks by federal Labor policy on the live sheep or live cattle trade. It was disturbing to find out that footage that I think the ABC aired was to do with a worker on one of these live cattle boats who took a major bribe to set up some footage.

That is disgraceful behaviour, because live cattle and live sheep boats have moved a long, long way from where they were 40 years ago. I went on a live boat here in Port Adelaide about 40 years ago just to have a look. That was doing the job with the technology they had then. I do not know how many wheelbarrows they had on board but that is the way they distributed feed to the thousands of sheep that were transported back then.

Now they have a lot of technology, with the waterers on board, the feed on board and, obviously, the people who look after the stock, whether it be sheep or cattle. There are vets on board and in many cases, if not most cases, the stock come off in better condition than when they got on board.

We have seen different attacks by Labor on the live cattle job up to Indonesia. We saw it happen when I was the shadow minister for agriculture about 12 or 14 years ago. The issues were around live cattle going to Indonesia. Some spokespeople from the federal scene of Labor were saying, 'Yes, they have refrigeration, the end-users, so it's all fine.' I got on the radio and corrected that, and then they had to come back and correct it themselves.

Yes, there is a lot more boxed product going overseas, but there are still a lot of countries. We have $1 billion worth of trade with the Middle East that we still need to support so that we can support our farmers. Certainly, we recently saw a ship turned around and sent back to Perth. There was a lot of media carry-on about this, but a lot of it was politically based. I can assure you that the only money in stock is livestock. That is why it is called the live sheep and live cattle trade. We see the federal Labor Party taking active measures to kill this trade.

What that does is kill the incomes of sheep producers across Australia. Certainly, in Western Australia it has had a dire effect, with people having to shoot thousands of sheep, and people have had to shoot sheep here as well. It is not as bad as the scene we had in the early 1990s, but still many sheep get killed.

These things have flow-on effects where sheep have to, by nature, then be transported to South Australia. That is fine. It is done by stock transporters who know what they are doing. They can get to Nundroo and stop overnight there and unload, and they get watered and fed in yards at the Smith family's operation there. I have seen that; it is a fantastic operation to rest stock overnight and send them on their way.

That is a direct consequence, in many cases, of what is happening in Western Australia with the federal Labor government attacking the live sheep job. The Malinauskas Labor government here needs to stand up for our producers, because it has a direct flow-on effect. I remember years ago when we were running wethers and they were only taking wethers down on the live job. At one stage, the price was about $28 a head, so you knew that was going to be the floor price in the local sheep markets. You certainly need that; you need more competition to make sure everyone gets the right outcome.

I salute our sheep farmers, our beef farmers and our croppers. Alongside the sheep issues at the moment is the electric identification tags, which are quite expensive. I think they are about $3 each. I know there is some proposal about subsidising the tags for $1 each, but someone said to me the other day that it is only for the black and white tags. If you want to tag them by colour—which many people do, so they can either identify stock from their lambing year or whether they are wethers or ewes—it is quite important to have them tagged appropriately.

I was talking to a grower the other day who has 10,000 sheep. He will have a fee of $30,000, because that is where he wants to go. People can argue that it is not much per head, but when you have a lot of little heads running around out there, it is a lot on the bottom line. We must support our farmers. They do a magnificent job in tough conditions and I must say that with the technology what they do with stock is fantastic, as is what they do with grain.

I drive past the grain stacks most days per week at Tailem Bend when I am not up here in Adelaide. You only have to see the amount of grain that is in those stacks that was wrecked in a tough year when there was no spring rain—it was all saved up for summer, when it was not that flash. Obviously, the use of technology to keep the weeds down in summer just shows what farmers can do to adapt, but the thing is the farmers need to adapt across this state. They will adapt. They have to, to keep being successful so that they can profit and look after the generations into the future.

Mr McBRIDE (MacKillop) (12:44): First of all, I thank the member for Hammond for his motion, bringing awareness to an industry that is dear to my heart, but, not only that, one that I am well and truly connected to. Before I start, regarding governments—any government, whether it be a state jurisdiction or a federal government—you would wonder and you would think, if they wanted to understand a sector or an industry, they might go and ask someone who is connected to that sector and industry to understand where the issues might lie and how we fix them.

The sheep industry is one of those industries which has had some huge fluctuations, as the member for Hammond has alluded to. I think his dates were a little out, but I am not going to be critical of that because you have to go a long way back to remember exactly what happened, but I will take it to you very clearly and precisely because we suffered it, we wore it and we lived it. In 1991, sheep were worth $2 a head on the market and they were worth $6 in the paddock if you shot them. There were 160 million sheep in Australia in 1991. Today, we have around 70 million to 80 million sheep in the country.

We took 20 years, when we had a generation of sheep producers, managers and staff who did not pursue the sheep industry, when it was nearly considered a poisonous chalice if you inherited the family sheep farm rather than finding an occupation in the greater, wider world. On top of that, what I want to speak to and be really blunt and clear about, without making it personal, political, but actually addressing an issue that is important, is that this is an export sector that feeds not only Australia but feeds the world, and it has its ups and downs.

As the member for Hammond alluded to, we have just seen a massive correction in the mutton and lamb price that probably started around June or July last year. What is missing in this motion is at paragraph (c), where he clearly wants to identify the Labor Party and the government being the issue because of the live sheep trade ban mainly from Western Australia's point of view, but it used to reach South Australia and Victoria. It may do one day, but that ban does not come in until 2025. That is a fact. The boats are still calling into the ports of Western Australia and taking sheep over there.

Can I also add, with my knowledge of that live sheep trade, that they used to talk about percentages of deaths on boats. It was too high, it was unacceptable, but the deaths now are not even recognised as a percentage. They are a number of head, and the deaths are so few that the sheep are probably safer on the boat today than in the paddocks where they originated on the properties. I say that with fact rather than making it up. It is very sad that the sector can change and turn the tide on a trade that is now going to be closed because of actions and outcomes that were not acceptable to the social understanding of Australians, and now it is absolutely world's best practice on any sort of live sheep trade around the world.

The other thing I need to capture here, though, is this correction the member for Hammond has alluded to, which is significant. It was a 70 per cent correction on lamb and mutton in June-July that extended right through and did not turn until December. It has corrected slightly, not to 70 per cent, not back where it was, particularly on the mutton, which is anything older than a year old. Lamb has probably corrected maybe nearly 70 per cent; it is probably now 20 per cent down. I can tell you, as a lamb producer, if I can get a heavy enough lamb out there at the moment for $150 to $200 a head, I know we can make money at that sort of level.

What is most unfortunate, though, is the fact that we saw this massive correction but the consumers of Australia never got to taste it, eat it and take any benefit from it. What do I mean by that? I can tell you that, across the mutton, lamb and beef sector, we did see 70 per cent corrections in our market prices for producers. We saw a cow go from $2,500 dollars a head to back down to $1,000 a head. We saw a mutton, a sheep, a wether go from $150 down to $20 and $30 ahead. We saw lamb come back down from $250 to $200 to about $70 a head. You know what? On the supermarket shelves, it is a 12 per cent change at best and it took four, five, nearly six months to even see that 12 per cent.

The investigation at the moment around the monopoly in our supermarkets may be necessary around fresh food farmers, fruit and vegetable producers, I am just not quite sure the supermarket chain should be blamed for this meat price. Why do I say that? We are an exporting nation of beef, lamb and mutton. We do consume a fair amount of it, but the export markets did not collapse. The New Zealand export market did not collapse. The American and European trade for beef, lamb and mutton did not collapse, yet our market collapsed.

That was on the basis of a long-term forecast of El Niño and a dry period. It was on the basis of some negative news about the live sheep trade closing in 2025, but that did not affect the market in June 2023. What happened and what we then saw was processors not coping with the demand to kill animals. We then saw a bottleneck and we saw the abattoir processing industry reduce the price, hoping that farmers would not put their stock into the system. That did not happen; it exacerbated it, it got worse. Farmers panicked. They wondered whether they were going to go from their $100 sheep down to a $10 sheep or no value at all, so the demand into the processing works got even worse.

It may not have been calculated but what was really poor timing—and I am not going to name the works—is there is a flush in Australia between around September through to December when a lot of animals come onto the market and this was the period when we saw this massive correction as well, when we saw a meat processor close its meatworks down for maintenance for two months. One would have to ask: why would they do that when they know there is a greater demand in that period? Anyway, it happened.

Another thing to ask is: why did the meatworks have this glut? What would they have normally done and how would they have remedied it? Normally what would happen is they would put on one, two or three shifts in their meatworks and run them longer to take up the huge demand to process, but they could not get workers. If they found the workers, they could not house them because we have a housing problem in this country. Then it just became a massive backlog and a whole collapse of a market. I can tell you, there was a billion-dollar correction in this market, at least a billion, if you take all three sectors.

I think there are two things that would have helped and this is taking a neutral political position. We saw a COVID response where we made it hard for backpackers and visa workers to stay in this country, unlike other countries such as New Zealand, who looked after their itinerant workforce. So our meatworks have found it very hard to reattract that worker base back. Secondly, we had this housing issue in this country, not just in the last 12 months, two years, but we have evidence of Bordertown, which is a meatworks town with a lamb and mutton processing business in it, that goes back to 2002.

We know that the Coalition sat on $700 million to spend on affordable or some sort of housing build but did not come up with anything to solve that back then. We are now still seeing governments not able to move and address the housing issue because everyone is rather scared not to waste money or to have it spent the wrong way. There is a belief that the market should do this, private investment should come along and build a thousand houses in Bordertown because we need a thousand extra workers to run two or three shifts, but it is not going to happen. To blame any one particular government over this is not fair.

Secondly, this movement of in and out workers needs to be picked up again; otherwise, this sort of collapse is likely to occur again when there is a glut. We need visa workers, backpackers, itinerant workers to come in under 457 visas, whatever they are, and it needs to be as easy after COVID as it was prior to COVID. Then we may be able to, let's say, address these sorts of massive issues that arise because of oversupply and lack of processing works. Just finishing that, the sheep industry has its challenges. I wish for all sides of politics to find those answers and hopefully sheep producers will prosper in the future.

Mr WHETSTONE (Chaffey) (12:54): I, too, rise to support a very important motion moved by the member for Hammond and to recognise the importance of agriculture, to recognise the economic contribution that agriculture makes to the South Australian economy, and also to recognise some of the challenges for many on this side of the chamber. We have MPs who have vast experience in regional settings in South Australia as farmers, as being part of the ag sector. I do not think there is anything more important than having a good, prosperous economic base here in South Australia, and that is agriculture—it has been and always will be. It is a renewable commodity.

In every direction that you look, whether it be standing crops, whether you look at the forestry industry, whether you look at fisheries, all of these sectors are renewable. All of these sectors are there to generate economy but they are also there to put stability into our regional settings. It is about farmers, farmers' families, the farming community. It is about the ports, it is about the transport and logistical network that it also supports, but it is also about supporting a reputation that Australia has held so dearly to its chest for many centuries.

If you look across the spectrum of the larger sectors within agriculture, standing crops, grains is by far and away one of the biggest contributors. In 2022-23, field crops yielded about $5.1 billion. It was a good season for the farmers. Prices were buoyed by some of the conflict internationally, but it had been a fairly lean road for a long period of time. As I quite openly say, farmers are the eternal optimists when it comes to driving an economy, dealing with the vagaries of weather, dealing with the commodity upturn and downturn in prices.

It shows that the diversity within agriculture is what is keeping it front and centre. If we look at the opportunities here in South Australia, it provides $17 billion to the local economy. We do see some precious metals that are worth a lot of money to the state's economy. We see a current government that continues to press on some of these ideologies that it wants to push along. You cannot eat hydrogen, you cannot eat copper, you cannot eat a lot of those mining products but you can eat and thrive and prosper on making sure that you have good, reliable, safe food delivered to the tables of every Australian, every global customer that is consuming some of South Australia's agricultural products.

Of course, it would be remiss of me not to talk about other sectors. The forestry sector is a hugely important contributor to our economy. It is very disappointing that the former Labor government here in South Australia sold the majority of ForestrySA out of public hands to the tune of about $600 million to pay for Adelaide Oval. Sadly, that buyer bought those forests and paid it off in two years.

It just goes to show how out of step the government was in the sale of that forest and what it meant to a private enterprise to come in, pick it up, harvest it, harvest it hard and export a lot of that product. There was a lot of controversy over the sale of those forests. But what I would say is it supports a majority part of the South-East. Those plantations in the Green Triangle are some of the best forest products in the world. I think they are doing a magnificent job down there.

The fisheries sector, part of the primary make-up of the economy, is also a very important part. It is a $200 million economy. Tuna appears to be the number one contributor. Then we go down to oysters, finfish, abalone and some of the other exotics that are part of driving that sector of agriculture. What needs to be stated is that agriculture is made up of a lot of components, not just the forests and the fish. Horticulture is also a very important contributor.

It should also be noted that the export sector is what keeps the majority of South Australians employed. Yes, we have seen a lot of our ag product go as a bulk commodity, whether it goes into hulls of ships, whether it goes into containers. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.

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