The year in ag: 2012

Fairfax Agriculture Media Canberra bureau chief Colin Bettles takes a look back over the year’s top 10 rural and farming sector issues out of Canberra.

LIVE animal exports continued to be a focus of political and social debate throughout 2012, following on from the controversy surrounding last year’s sudden suspension of live cattle trade to Indonesia.

But it wasn’t all doom and gloom for rural Australia, in what was ultimately meant to be a celebration during the Australian Year of the Farmer. Major breakthroughs were achieved on several long-running policies, including the Murray-Darling Basin and the removal of lingering wheat export marketing regulations. Positive steps were also taken to develop comprehensive strategic industry plans by the federal government and the National Farmers Federation.

1. Live exports

LIVE animal exports continued to divide community and political opinion throughout 2012. Several controversial animal cruelty incidents, highlighted in ABC TV coverage, overshadowed significant advancements in animal welfare.

The events of June 2011 remain fresh in everyone’s memory, with Indonesia cutting its import quota numbers by about 50 per cent.

Animal rights groups maintained calls for the trade’s demise, despite the new Exporter Supply Chain Assurance System (ESCAS), which ensures investigations of incidents and appropriate penalties. Two independent surveys later in the year showed public opinion was turning, with the majority supporting the trade’s continuation, underpinned by continuous animal welfare improvements.

The biggest live export issue for the year was the inhumane sheep cull in Pakistan which sparked another ABC TV Four Corners program, spearheaded again by award-winning reporter Sarah Ferguson. Pakistani authorities seized a consignment of 21,000 Australian sheep at gun point and subjected them to a brutal cull, despite independent expert testing proving the sheep to be disease-free.

Industry leaders proved they were better organised and more effective in dealing with the challenging issues than was the case in 2011. They also received welcome support from the Prime Minister Julia Gillard, federal Agriculture Minister Joe Ludwig and his Department, highlighting the trade’s role in improving animal welfare standards globally and significant improvements in animal welfare outcomes under ESCAS. An investigation of the Pakistan issue is being conducted by the Department, and industry placed a voluntary export ban on the markets involved.

But the live export industry will need to remain on red alert next year with the ALP’s influential Live Animal Export Working Group - headed by vocal critics of the trade, backbench MPs Kelvin Thomson and Melissa Parke - currently developing a model for an independent office of animal welfare, which will be tabled to the ALP Caucus when parliament resumes.

2. Murray-Darling Basin Plan

FEDERAL Water Minister Tony Burke took a bow after finally signing off on the Murray-Darling Basin Plan, which was eventually passed with support from the Coalition. Minister Burke said the challenging water reform process had helped to overcome a political deadlock spanning 100 years.

“Today under the Gillard government, a century late but hopefully just in time, Australia has its first Murray-Darling Basin Plan,” he said in an impressive speech at the Press Club marking the achievement.

The final Basin Plan will see 2750 gigalitres of surface water reserved for environmental purposes and contains an adjustment mechanism which allows governments to improve environmental, social or economic outcomes provided that improving one doesn’t sacrifice others.

The government has also committed to provide an additional $1.77 billion to relax key operating constraints and recover an additional 450GL of environmental water. Minister Burke said the plan includes spending $5.2 billion on irrigation infrastructure which increases irrigation productivity and provides valuable employment benefits during design and construction phases. Of the 2750GL, 2100GL will be derived from current water buyback and infrastructure programs.

Within that 2100GL, about 290GL will be derived from rural communities over a period of time through water buybacks. The remaining 650GL will be achieved through various programs of environmental works and measures to create improvements and savings from the environmental watering pool. But if States don’t put forward projects for achieving the 650GL, the gap must be filled with buybacks.

Minister Burke said no stakeholder or State would look at the final plan and say it contains everything they wanted, but the plan does guarantee the river system will become healthier, not weaker. He said big tender buyback rounds “are now a thing of the past”.

3. Wheat export marketing legislation

THE Wheat Export Marketing Amendment Bill generated deep industry and political divisions during the year, similar to the old AWB single desk monopoly debate. A measure of how controversial the issue became was the re-emergence of former Western Australian Liberal MP Wilson Tuckey into the public debate, lashing out in typical outspoken style at a number of WA Liberals for failing to support their State constituents who were calling for full deregulation.

Several WA politicians pledged to cross the floor and vote with the government, against their Coalition colleagues, including WA National MP Tony Crook, and Liberal Senators Alan Eggleston and Dean Smith. But Coalition leader Tony Abbott breathed a sigh of relief when the final vestiges of the AWB single desk monopoly were eventually laid to rest in parliament’s final sitting week for the year, thanks to amendments from The Australian Greens.

The Bill’s passage through federal parliament was stalled after industry groups sought to expand the market oversight functions of regulatory watchdog Wheat Exports Australia (WEA) to cover concerns about grain export quality controls, port access and grain stock information. The Greens’ amendments ensured a process will unfold in 2013 to look into those issues in more detail, through government and industry taskforces.

Australia’s wheat industry will now be fully deregulated with the WEA - a transitionary vehicle to deregulation appointed in 2008 - winding up on January 1, 2013.

4. Drought reforms

WHILE live exports and wheat export marketing were attracting national headlines in late October, little fuss was made when federal Agriculture Minister Joe Ludwig and State Agriculture Ministers accepted a national package of drought-related programs.

The new drought package is focused on risk management and preparedness for farmers and rural communities rather than crisis management. The new national framework is scheduled to be implemented from July 1 2014. It will have a farm household support payment; promotion of Farm Management Deposits and taxation measures; a national approach to farm business training; a co-ordinated, collaborative approach to the provision of social support services; and tools and technologies to inform farmer decision making.

Minister Ludwig said programs in the new package will be available at all times, without the need for a drought or Exceptional Circumstances declaration.

5. The National Food Plan and the NFF Blueprint

THROUGHOUT 2012 both the National Farmers Federation (NFF) and the federal government engaged in consultations designed to create strategic plans for agriculture, in what’s expected to be a insecure food future underpinned by rapidly increasing global population and rising demand for Australian food products, especially in Asia.

The NFF is expected to launch its Blueprint in early 2013, which will merge with the government’s National Food Plan (NFP) white paper released during 2012.

The NFF gathered feedback at numerous forums. Some of the key issues raised in the consultation included; perception of agriculture; land usage; government policy, red tape and funding; education; water availability and management; commodity prices and profitability; succession planning; competition policy and supermarket power; biosecurity; climate variability; rail and road infrastructure; foreign ownership; attracting younger farmers; and R&D funding.

NFF president Jock Laurie said the two plans would play vital roles in securing a strong and sustainable future for the agricultural sector.

6. Foreign investment – Cubbie Station

CONCERNS about escalating foreign investment in Australian agriculture peaked during the year, when the federal government granted its approval to sell Queensland’s iconic Cubbie Station to a joint consortium dominated by Chinese investors.

Treasurer Wayne Swan approved selling Cubbie, the largest water licence holder and commercial agricultural operation on the Murray-Darling Basin, after scrutiny by the Foreign Investment Review Board (FIRB). The approval was given to the Chinese textile company Shandong Ruyi and Australian-owned wool and grain marketing company Lempriere, with the Chinese required to sell down its 80 per cent interest to 51pc within three years under the sale conditions.

Mr Swan placed other conditions on the multi-million dollar sale, including local marketing and sale of the station’s cotton production by Lempriere. But the sale generated heated controversy and ignited bitter Coalition divisions, when Nationals Senator Barnaby Joyce said the FIRB’s national interest test was a “farce”.

Pastoralists and Graziers Association of WA executive committee member, Gary McGill, said the National Party’s opposition to foreign investment in Australian agriculture was largely based on “xenophobic fear-mongering”.

7. Industry representation

SEVERAL issues highlighted the fractured nature of farm representation during the year, in particular the expression of multiple opinions on wheat export marketing by grain representative groups.

A challenge was also issued to the National Farmers Federation by the Agribusiness Council of Australia (ACA) which aims to launch early next year. The ACA is trying to establish a comprehensive representative body for agribusiness along similar lines to the Minerals Council of Australia.

Federal Independent MP Tony Windsor added fuel to the issue by launching a scathing attack mid-year on NFF’s capacity to represent the industry. Mr Windsor said the NFF was ignored within the corridors of power and considered ineffectual, having tied itself to the National party.

“I hear concerns around the place about the NFF and as soon as their name is mentioned, it’s seen in derogatory terms by a lot of people,” he said.

NFF president Jock Laurie retorted, “Mr Windsor can say what he likes: the important thing is that the NFF is not afraid to stand up against policy we don’t agree with”.

8. Supermarkets wars

THE domination of Australia’s supermarket duopoly of Coles and Woolworths, with 80 per cent share of the retail grocery market, remained a contentious issue throughout the year.

Coles continued selling home-branded milk at $1 a litre as part of its loss-leading retail strategy and the dairy industry continued raising concerns in Canberra about the industry’s viability under that pricing arrangement.

The issue took an unlikely twist in May when high profile Australian entrepreneur Dick Smith said Australians should feel “proud and lucky” to have the two Australian owned companies operating in the domestic retail grocery market. Mr Smith said breaking up Coles and Woolworths’ 80pc grip on the local retail market would only expose them to “unmerciful” foreign-owned multinational companies like Wal-Mart and Costco, and farmers and rural communities would be “collateral damage”, with processing forced offshore.

9. Carbon tax

The government’s new carbon tax system came into being on July 1, with opinions remaining deeply divided. The multi-billion dollar legislative carbon trading package is the biggest taxation reform in the nation’s history. It aims to reduce greenhouse gas emissions by putting a $23 a tonne price on carbon while holding the nation’s largest polluters to account.

However, critics believe the tax will achieve little in the way of environmental benefits. The Coalition has pledged to repeal the carbon tax if it comes into power next year and continued attacking its cost impacts on various sectors of the economy, including agriculture. Parkes MP Mark Coulton said inputs costs like fertiliser and chemicals, and eventually fuel and freight, would also be hit by increases. “For the vast majority of farmers the biggest threat to their future is not climate change, but the government’s carbon tax,” he said.

Climate Change Minister Greg Combet also made a gaffe by suggesting farmers can pass on increased costs from the carbon tax back to consumers. The statement was severely criticised by farm leaders and other critics, for failing to recognise farmers are price takers, not price makers. The Minister later backpedalled on his statements, saying Australia’s agricultural sector has the most to lose from climate change - but primary producers are not directly liable for the carbon price because the Gillard government has exempted the agricultural, farming and fisheries sectors from the carbon pricing mechanism.

10. Australian Year of the Farmer

THE Australian Year of the Farmer (AYOF) roadshow toured the nation during 2012 spearheaded by Australian cricketing legend Glenn McGrath as ambassador.

“The messages we’re trying to get out there about our farmers are really important and people seem to understand that and appreciate what we’re saying,” he said.

“We need to take time to think about what our Aussie farmers actually do for us all on a daily basis - from the food we eat to the clothes we wear and even the houses we live in.

“It’s not just a matter of going to the supermarket or to the butchers to get our food and what we need to survive; there’s a lot more to it than that.”

FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Canberra CommentFairfax Agricultural Media Canberra correspondent Colin Bettles tackles the big national rural and agricultural issues which will impact regional and rural Australians.

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