Farm debt limiting our future

The nation’s overlying debt challenges remain the elephant in the room

THE view from my kitchen window is of the Toowoomba range. On any given morning, I can make myself a cup of coffee and look out my window to see the endless procession of trucks carting Queensland produce down the mountain towards the global marketplace.

As I sip a mouthful of my brew and prepare for the day’s work, the iconic highway that neighbours my home carts almost 60 per cent of all the goods that will eventually depart from the Port of Brisbane.

From the cotton that will clothe the Chinese to the beef that will feed the Japanese, the Toowoomba range is a microcosm of our agriculture sector’s international momentum.

We are increasingly being told that a vibrant, innovative and competitive agricultural sector will be one of the pillars essential to underpinning a diverse, world class Australian economy.

But if we are to truly capitalise on the increasing food and fibre demands in this ‘Asian century’ then our government must work with private enterprise to address the structural concerns underpinning sector confidence.

I stood on the Federal Senate chamber floor recently and spoke out against the inaction of the banking sector in providing relevant and accurate data detailing the true extent of farm debt across Australia, particularly our northern regions.

I believe this information shortfall hampers the ability of governments to formulate relevant public policy for the rural sector.

It also limits the ability of not for profit organisations, such as social and financial counsellors, to accurately allocate resources across rural regions.

I would argue that making farm debt more flexible and manageable and increasing farm gate profitability are among the biggest structural challenges confronting the rural sector as its prominence increases on the national agenda.

The federal government is working towards improving farm gate profitability through the development of the white papers for agricultural competitiveness and northern development. The Queensland government has committed to doubling agriculture output by 2040.

But the nation’s overlying debt challenges remain the elephant in the room. Just as individual farms must reduce over-reliance on credit, so too must the nation.

Households all across the Australia are waking up with the stark reality that all the benefits to our standard of living from more than two decades of unprecedented economic growth are at risk if we do not take action to address our nation’s bottom line.

Australia exports more than half its agricultural output and cannot afford to lose its momentum nor competitive edge due to national complacency on debt.

We must make the necessary savings so we can dedicate more funding towards nation building infrastructure.

In my home state, freight volumes are expected to increase from 871 million tonnes in 2010-11 to a projected 1741 million tonnes by 2026.

To give some perspective, that will be the annual equivalent of 21.7 million more truck trips on our roads or 174,000 more freight train trips on our state network.

The world wants our product.

We have got to start building the infrastructure that is going to lift productivity across an economy that has been finding it tough over the last few years.

Whilst no one doubts there is a plenitude of burgeoning opportunities, we first must confront the government’s tough fiscal situation so that we can restore stability and increase business’ ability to plan.

Whether it is moving a mountain or eating an elephant, difficult obstacles have to be tackled one step at a time.

Federal funding for the second Toowoomba range crossing was among the major project announcements from Joe Hockey on Tuesday night.

Once completed, trucks will likely travel this alternative route as they continue their path from the farms of Western Queensland to the Port of Brisbane and beyond.

It will significantly change the morning view from my kitchen window - and will prove a clear vision for agriculture’s future is in the frame.

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FarmOnline
Barry O'Sullivan

Barry O'Sullivan

is a Queensland-based Senator for the Liberal National Party
Date: Newest first | Oldest first

READER COMMENTS

Deregul8
26/06/2014 6:42:07 AM

The problem for farmers are globalists and their central banker henchmen who have the power to mobilise printed money to the short side of futures markets and effectively manufacture deflation. So long as there is faith in paper money, this problem will exist. Just as gold prices are suppressed, so too are food commodity prices. No votes in food inflation and wealthy farmers.
Dave
25/06/2014 8:45:32 PM

Pity we can't have a rational industrial relations policy, eh, thugboy? There's no way your lot can survive without protection and subsidies.
Rational Ag Policy
24/06/2014 7:58:56 PM

The serf - its called the cost price squeeze, its one of the rules of the game you should know all about. People who don't know about it should probably think twice before investing their money in Agriculture. Input prices will always rise and output prices will always fall. Also, if land prices have risen to levels that don't reflect the profit they generate who is to blame, the government (as you suggest) or people (who enjoy farming regardless of the cost) making dodgy investment decisions. I think you really need to blame the latter. Good comment about the hat.
Graeme
17/05/2014 7:19:49 AM

Love it Jacky! Don't you feel so well represented in government by this intelligent man!
The Serf
17/05/2014 5:53:20 AM

The problem is extremely low farm incomes!!!! COP has risen by 300% in the last 15 - 20 years and grass-fed cattle prices are stagnant, which means a $600 animal today is equivalent to $200 in 1996, and that is now less than the COP itself. As cattle prices have failed the price of land that runs the cattle has dramaticly increased when in fact it should have dramaticly declined. Gov. policy is on Productivity not Profit; development must come from Profit not a bank loan; thse are the real issues.
Jacky
16/05/2014 9:47:10 AM

"Just as individual farms must reduce over-reliance on credit, so too must the nation. " Thanks for putting on a hat in your blog photo - gives your populist lines with no offered solution so much more credability
Bush mattersBush matters - LNP Senator Barry O'Sullivan tackles the issues facing Aussie primary producers and people across rural and regional Australia.

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