COMMENT

Joel Fitzgibbon's Canberra Report | Agriculture a 'missed opportunity' in 2020 Federal Budget

Agriculture a 'missed opportunity' in budget

Only time will tell whether all the huge and eye-watering budget deficit the Federal Government produced last Tuesday night will represent debt well-spent.

Each and every dollar spent must be one which stimulates the economy, saves and creates jobs, and provides appropriate support to those suffering the worst consequences of COVID-19.

We already know there were some missed opportunities, health and aged care amongst them. So too the sustainability and profitability of our agriculture sector.

The government continues to say it supports the ambition of the National Farmers' Federation to grow the value of Australia's farm out-put to $100 billion by 2030.

It's a challenge that is now more difficult because three years after first making the commitment, drought and COVID-19 have pushed the value of farm output down.

So, with only nine years to go, we'll need to do more, not less.

Yet despite its words of support, the Government has not produced a plan to get us there.

Doubling farmgate value can't be done by doubling farm output volume. Australia does not have the water, soil, people, and money to do so.

Rather, we must focus more on the return we receive for our products, and lowering the cost of producing them.

Our agriculture sector has many strengths: the quality and experience of our farmers, and our reputation as a provider a clean, green, safe and high-quality food, are chief amongst them.

We also enjoy proximity to the big markets of Asia and mature trading relationships.

But we have challenges too, including limited labour, capital and natural resources.

There are also emerging threats, a changing climate, and a deteriorating relationship with our major trading partner.

We continue to underperform on the innovation front, and we are increasingly dependent on imports for our inputs to production and our crop protection products.

New competition is emerging, and freight rates are falling which undermines the advantage our proximity to markets gives us over many of our competitors.

Add poor productivity and patchy profitability and its obvious government has some work to do.

To reach $100 billion by 2030 we need an overarching strategic plan for the agriculture sector, one which identifies and addresses the weaknesses, counters the threats, provides guidance for investors, and leverages the opportunities with well-targeted government investment.

Government must also be more honest about our structural issues - that's the first step to addressing them.

It remains a fact that 80 percent of the sector's output comes from just 20 percent of our farm businesses.

According to the ABS, 60 percent of farm entities have a turnover of $200, 000 or less. Poor natural resource allocation remains a problem and will remain a brake on farm output value if not addressed.

Yes, producing a strategic plan is hard because it requires government to be honest rather than popular.

But done well, it will be popular because it can turn the increasingly difficult path to $100 billion into a reality.

Budget week was another missed opportunity.

Very best wishes to my beloved Cessnock Goannas in Sunday's Real NRL Grand Final.

  • Joel Fitzgibbon is the federal Member for Hunter and Shadow Minister for Agriculture and Resources. Contact his office on (02) 4991 1022 or via joelfitzgibbon.com.

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