Excess regulation hurts agriculture: PGA

20 Mar, 2015 01:00 AM
 Tony Seabrook with one of the Lonking loaders his company, AgImports, brings in from China.
Primary producers get very little benefit from $100 million borrowed every day...
Tony Seabrook with one of the Lonking loaders his company, AgImports, brings in from China.

“IT’S infuriating having to spend so much time treating the symptoms of government inaction, for it leaves insufficient time to tackle the deep seated structural problems”.

That is one of the early frustrations of Pastoralists and Graziers Association (PGA) president Tony Seabrook in his relatively short time in the role.

Now into his second year in the job, he has noted how uncompetitive labour costs are and a myriad of government impositions in the form of taxes and compliance costs.

This makes it very difficult for Australian primary producers to compete against competitor nations (including the United States) with a much lower cost base, including grain which competes against Black Sea and even Indian producers.

This is all demonstrated by an accumulated current account deficit of more than $850 billion, and accelerating Federal Government borrowings of nearly $300b, which stimulates the economy and keeps the dollar too high.

“Primary producers get very little benefit from $100 million borrowed every day and $1b paid in interest every month,” Mr Seabrook said.

“This payment is not being used to cure the nation’s problems, but to pay the cost of past mistakes – as bad policy begets bad policy.”

A passion for agriculture has been a hallmark of the Seabrook family, with Mr Seabrook’s great-great grandfather John Seabrook arriving in WA in 1840 and opening a business in Guildford.

John’s wife died shortly afterwards, so to ease his domestic arrangements, he employed local widow Mrs Robinson to look after the house and his children.

Some time later they married and with their nine children, decided to leave Guildford and take up land, moving to a property he had selected south of Beverley in an area that was gazetted “Seabrook Town”, but is now known as Brookton.

John’s son, also John, pioneered a second property, Winarlin, near Pingelly before deciding to move north to Cossack with 5000 sheep in 1876.

The family returned to York in the early 1890s and took up family land known as Seabourne.

In the 1980s the Seabrooks decided to expand their business enterprise by importing Steiger tractors and later, with two sons home on the farm, this expanded to a wide range of other goods and became the business, AgImports.

This range included tyres, air compressors, motors, semi trailers and fertiliser that were imported from China.

“The country is now full of companies selling goods imported from China, so we have decided to concentrate on two items,” Mr Seabrook said.

A self-propelled sprayer, the Vector, is imported from the US and a Lonking articulated loader is brought in from China, with both machines having 8.5 litre Cummins diesel motors.

“The motors, built by Cummins in the US and China, are different models, with the US motor in the 36m sprayer producing 260kw, while the motor in the 3m3 loader, produces 160kw,” he said.

“But the main feature they have in common is my ability to speak to the design departments in both companies and have changes implemented within a matter of days.

“We are State distributors for both products, but importing machinery has provided us with an education in bureaucracy and rules, with our suppliers telling us how much simpler the task is when sending to countries other than Australia.

“The level of over-regulation in this country confers a staggering expense upon the end user.”

As a practical example of Australia’s manufacturing decline, Mr Seabrook notes that in 1980, “all of the machinery on my farm was made in Australia, tractors, headers, ploughs, trucks and utes and almost all of our inputs’’.

“Today, none of it is Australian-made, mostly coming from the US or China,’’ he said.

“The story is the same in the city, where in 1980, all of our household whitegoods, TVs, radios and refrigerators were all Australian made. Today, our houses are mostly full of imported goods.

“The result? We import more than we export – not a good long-term scenario.”

Mr Seabrook says Australia “shot itself in the foot following World War II.

“The tariff policy in the period after WWII started the decline with workers demanding wage increases and employers acquiescing,” he said.

“They felt safe in the knowledge that increasing tariffs would protect them from competition from imports, while efficient exporters, including farmers, would provide the wealth that would be transferred to them.

“Our industrial relations system ensured that wage increases given to the tariff-protected industries were passed on to workers in all of the other industries. CPI wage increases became the catch cry and the lazy way to deal with inflation.

“By the time (Prime Minister) John Howard brought some sanity to our industrial relations system, our manufacturing industries had just about been destroyed, with our high cost wage structure being the legacy.

“We probably have the world’s highest cost structure, with disastrous results for those attempting to compete against low cost producers in the food processing sector.”

Politicians are concerned at the number of votes they will lose if they try to restructure the economy, while “the PGA spends too much of its time trying to deal with the legacy of bad short-term economic policy’’.

When I asked when the Seabrooks became involved with the PGA, the answer was surprising, for it turns out that for many years they were members of the WA Farmers Union (now WAFarmers).

Like most Avon Valley farmers, the Seabrooks were very involved in prime lamb production and the formation of the WA Lamb Marketing Board (WALMB) was a most unwelcome development.

Mr Seabrook and his father were more than competent to market their own lambs and resented any government-imposed board that took that right away from them.

They joined the PGA because it opposed the WALMB and were happy with the philosophy of this new organisation.

Later, a fellow member rang complaining about the actions of Darkan consultant Bob Hall and others who were opposed to the wool reserve price scheme.

Much to his friend’s surprise, Mr Seabrook informed him that he agreed with Mr Hall.

“The battle to kill off the reserve price scheme for wool became the defining battle of the late 1980s,’’ Mr Seabrook said.

“Reason prevailed and the free market re-established itself.”

But the greatest PGA achievement, and the one Mr Seabrook is proudest of, was the deregulation of grain marketing at the Federal and State levels.

“This has brought benefits in the hundreds of millions of dollars annually to WA grain growers – it’s the free market at its best,” he said.

Although he supports the concept of a restructured CBH, Mr Seabrook is concerned that it has become a battle of philosophies not economics and this is blocking the debate.

“Competition has changed the rules, but it is a business analysis, including an examination of its performance, that should decide the optimum structure needed for the task,’’ he said.

“Philosophy and politics should not be used to blur the lines towards either answer, for if it can be shown without doubt which option brings the greater financial benefit to growers then that is the course we need to follow.”

The knowledge and passion Mr Seabrook brings to his tasks demonstrate that he could make a contribution in either a Federal or State Government.


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