Ag's White Paper déjà vu

My list starts with the removal of government-caused obstacles to profitable agricultural production

THE previous government developed the National Food Plan, to “set a long term direction for our food system and help prioritise our actions and focus resources”.

The current government is developing a White Paper to “drive the long-term agricultural policies of the government and ensure Australia’s agriculture sector remains a significant contributor to the economy and local communities".

We do not have a plan for the mining industry, the finance industry or underpinning the proliferating coffee shops. So why spend taxpayers’ money on a plan for agriculture?

Central government planning does not have a good record. The former Soviet Union was fond of five-year plans that prescribed how the country was expected to operate. Giant billboards were erected in major cities exhorting the populace to strive to reach the plan’s goals.

But it was all fiction. Production never matched the plan, the country either ran out of things or they were in the wrong part of the country, and huge amounts of stuff had to be imported.

Most of the National Food Plan was similarly fiction. While some of the goals were rational, the means of achieving them were fanciful. It is now dead and buried and its website archived, but there is a sense of déjà vu about the forthcoming White Paper.

I don’t believe Australia needs a plan for agriculture any more than it needs one for the tattoo industry. But if we are to have one, it could probably be limited to a single paragraph that reads, ‘let’s feed and clothe as much of the world as we can, indefinitely and profitably’. Everything else just follows.

That would not be sufficient for Ag Minister Barnaby Joyce though, because he likes to think he has his hand on the tiller. So I have come up with a few suggestions for him, and the government in general, to turn that aspiration into practical reality.

Because the aim of the White Paper is to “identify pathways and approaches for growing farm profitability and boosting agriculture’s contribution to economic growth, trade, innovation and productivity”, my list starts (and ends) with the removal of government-caused obstacles to profitable agriculture production. Spending other people’s money is not required.

There are hundreds of such obstacles, led by restrictions on private property. Let’s get rid of the prohibitions on land clearing along with all the other rules and regulations preventing farmers from using their properties for productive purposes. In fact, how about an entrenched legal right to “quiet enjoyment” that binds the government? If the owners of privately owned land are not harming anyone else, it should be nobody else’s concern. And if the government diminishes its value, it should pay compensation.

Next on my list is government intervention that drives up the cost of inputs such as chemicals, machinery, freight, fertiliser, seeds and services. There are still plenty of inputs subject to tariffs, which bumps up their prices, and the rules and bureaucracy that govern the supply of inputs add substantially to the final price paid by farmers. Think agricultural chemicals, fertilisers and road transport, for example.

Next, make it easier to employ people to work on farms. The minimum wage prevents hundreds of thousands of Australians from getting a job, quite a few of them on unemployment or disability benefits. Many would welcome the dignity of work and to earn more than they receive in benefits, and there are thousands of farmers who would be glad to employ them, but it’s against the law unless they are paid the minimum wage.

And it doesn’t stop there. Those with a job must be paid penalty rates for working on weekends, public holidays and after hours, yet the right time for sowing or harvesting crops, or shearing sheep, is not limited to business hours. Let’s allow employers and employees to negotiate their own terms of employment and keep the government’s nose out.

Then there is the question of liability. Landowners and employers are commonly held liable when a visitor or employee on a farm is injured, even if primary responsibility lies with the person injured. The cost of insurance to avoid crippling costs contributes to high farm overheads. Let’s reinstate personal responsibility and put an end to incessant victimhood.

The government also reduces the profitability of agriculture is by putting its hand in farmers’ pockets. An example that particularly grates is compulsory levies to fund generic marketing and R&D, with many producers paying tens or hundreds of thousands of dollars a year, and a few over a million.

Some claim the levies address market failure, although economists tell me it is governments that fail, not markets. And while the levies are occasionally used for industry benefit, an awful lot of money is wasted. Ultimately, marketing and innovation are what determine which businesses succeed and which do not. Let’s boost profitability by abolishing levies, or at least give each industry a vote on whether to retain them.

And the final item on my list, although I know there are many others that could be added, relates to capital gains. Farmers invest heavily in their properties in the expectation that at some time in the future they will get it back in the form of higher value. Let’s allow them the freedom to sell their farms to the highest bidders, no matter what nationality they are.

Now that’s a plan.

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David Leyonhjelm

David Leyonhjelm

has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
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READER COMMENTS

Bruce C
28/04/2014 6:54:05 AM

Because there is a lot more money to be made out of mining and the profits allow the big mining companies to keep all the greenies, animal libbers and other whingers at bay through the courts. Not much money in agriculture and if we want to produce our own food, let alone supply Asia, in fifty years time, we need to have a plan. If you don't plan, you plan to fail, David.
dunart
28/04/2014 7:57:12 AM

if we plan to sell into the world market, surely any plan will have farmers being able to access the world market for costs of production that match the price received. if the community through the govt wants to intervene, then that should be at the cost of govt, not the world market income food producer?
Simon
28/04/2014 9:01:38 AM

Miners have the Minerals Council of Australia through which they lobby Gov't and get their way. You can bet that between them and through Minerals Council they "have a plan". Agribusiness has 4,000 representative bodies that mostly fight with each other and within themselves. We need an Agribusiness Council if ever there is to be an industry supported "plan". By the way, our biggest trading partners all seem to have plans and all we seem to do is promise to give up sovereign rights in return for trade concessions. This is a pathetic negotiation stance and all because there is no plan.
The Serf
28/04/2014 10:02:00 AM

and... the first job is to repeal the AMLI Act and disband the MLA/RMAC structure. Currently, meat and cattle are in short supply world wide we need nothing else than what we currently have to sell, and sell at about 300% better return than our closed industry; deregulate repeal and remove ESCAS the rest will come.
dogsbody
28/04/2014 10:08:45 AM

Because eventually we will be all mined out, if the rate of sales of prime agricultural land continues(to ensure food security for foreign entities) we will not be able to feed our own. Without a plan we are going to be in strife. The big problem with the current federal government the only plan they are likely to make is to ensure foreign sales go through without too many problems. Don't worry David for the next 6 years you should get a (heavily subsidised) feed, can't see the pollies going hungry can we? If the going gets tough you can always have a stiff drink (excise free) .
Peter Callil
28/04/2014 2:04:14 PM

Spot on commentary as usual David. The reason we have become addicted to government assistance is because they have taken away our freedom to live and do business on our terms. It's only right that they should make amends for imposing their will upon us if it's not really for the "Greater Good."
Mike
28/04/2014 3:00:07 PM

I like this guy!
stockman
28/04/2014 4:17:48 PM

If Leyonhjelm is so clever and thinks he knows so much why isn't he running the country? Easy to sit back and complain when you are being fed by the taxpayer.If not now,then after July 1.
lou
28/04/2014 4:17:49 PM

David is right. Why keep throwing hard-earned taxpayer dollars (including mine) at all these plans/reports/green papers/white papers/ that create a huge PR-induced brouhaha when they're launched, and then proceed to sit on the bureaucratic shelf with no apparent follow-up?
Frank The Furious Farmer
28/04/2014 4:51:47 PM

Serf, We already have one Senate review of the Red Meat Industry sitting on the government shelves gathering dust. If the Government elect to do nothing this time then there will be hell to pay!! What makes me laugh is Hon Barnaby Joyce has it within his powers to fix the mess without a Senate review, Does he think after we had our say he will make a half baked executive decision and he expects we will sit back and accept it?? He could be in for quite a surprise if he thinks this is what will happen.
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Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

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