Embargoed until deliveryF7/ 6
3.00 p. m. JjA U ST LIA
PRIME MINISTER
FOR PRESS 29 JULY 1977
ADDRESS AT OPENING OF KANANDA DISTRICT COUNCIL YOUNG FARMERS
CONFERENCE : WARRNAMBOOL
It is a great pleasure to be invited to open your Annual Conference.
You could not have picked a better electorate in which to hold it.
It has been quite a wrench for me to spend so much time away from
my property over the past few years. Still, there are so many
other farmers in the present Cabinet, I almost feel at home in
Canberra these days.
It is now just over eighteen months since the Liberal and National
Country Party coalition was elected to Government. This seems
therefore an appropriate occasion for me to review with you what
we have been able to do in tackling the problems of our primary
industries during the first half of our first term.
We came to office with the strong conviction that Australian rural
industries must continue to play a significant role in Australia's
development. We saw and continue to believe that the fortunes
of the rural sector and those of the rest of the economy are closely
bound together. We viewed with deep concern the division which was
developing between city and country. One of our major challenges in
Government has been to halt and repair that rift, and to promote a
better understanding by those in urban areas of the problems of
country people and of the mutual inter-dependence of the rural
and urban communities.
It has been our aim to encourage the sound development of existing
and new primary industries and to foster the most efficient and
effective utilisation of our agricultural resources. Great
emphasis has been placed in our agricultural policy upon measures
to promote stability and confidence in the rural sector and on
the development of existing and new markets for agricultural
commodities. We are totally committed to retaining a viable rural sector which
will continue to contribute significantly to export revenue and
provide high quality food and fibre for consumers. We further
believe that our agricultural policy should form an integral part
of our overall national economic and social policies.
our first objective has been to attain general economic recovery.
When we came to office, the economy was in very bad shape. The
budget deficit was running out of control at around $ 4 billion
a year; inflation was running at an annual rate of 16% of more;
and a large number of our industries, including most of our rural
industries, were facing serious financial difficulties. / Against
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Against this background, the task of the Government was clear to
reduce inflation. It was essential that a climate of stability
should be created in which economic growth and development could
once again be generated throughout the private sector. Confidence
about our economic future had to be restored. Nowhere was this
more vital than in the rural community. The situation has been
so serious as to raise doubts in the mind of many primary
producers about the long-term viability of some industries,
which for a long time have contributed to the wealth of this
country and the welfare of its people.
These doubts were basically the result of reduced access to markets
for many rural commodities, and decreasing competitiveness
because of our higher inflation rates than those of other exporters.
In short, our farm costs rose more rapidly than farm prices. Despite.
significant increases in productivity, the real incomes of primary
producers declined dramatically. Such movements in farm incomes
have made it increasingly difficult for many farmers with marginal
properties to maintain satisfactory incomes. Some have had to quit
farming altogether, and many families have had to supplement their
income from off-farm sources. In addition, low farm incomes have
affected investment plans with perhaps serious long-term implications.
Most major Australian agricultural industries rely heavily on export
sales. Some 90% of the wool clip, 75% of the sugar, 65% of wheat,
and 55% of beef and veal production are exported. In these
circumstances, Australian agriculture is very vulnerable to
fluctuations in world market conditions and to protectionist
policies adopted by importing countries. The Government has been
endeavouring in every possible way to secure improved access to
overseas markets for our primary products.
The Ministers for Primary Industry and Overseas Trade and myself
have devoted considerable time on this matter, and I am glad to
say that our efforts are bearing fruit. In respect of beef we
have succeeded in securing increased access to the United States'
market and have maintained access to the Japanese market in the
face of adverse demand conditions there. Substantial sales of
beef to Russia and Eastern Europe have been helpful.
There has been good news also for other commodities. The recent
sale of 3 million tonnes of wheat to China is the largest ever
negotiated. Australia has further penetrated the Middle East
market for lamb and live sheep, and the volume of cheese sold to
Japan has continued to increase.
our trade with the European Economic Community, however, is far
from satisfactory. Their Common Agricultural Policy has created
grave problems for agricultural exporting countries such as
Australia. Under this policy, domestic agricultural production
is artificially stimulated by high prices supported by restrictive
import policies, and this greatly inhibits access by other more
efficient producers to the large European market.
But even worse, the EEC subsidises the export of surpluses
generated by the Common Agricultural Policy which seriously
disrupts our other traditional markets around the world. My
Government places a high value on our relationships with the
European Economic Community and its individual members. During
my recent visit to Europe I was glad to be able to have warm and
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discussions about these matters. Indeed, at times they were
very warm.
To those European leaders who showed interest in Australia's
uranium, I made the point that, should Australia decide to enter
the export field in this commodity, both buyers and sellers would
regard stability of supply and access as an important consideration.
I stressed that this principle was equally applicable to trade in
other items. Press reaction overseas suggested that this point
was noted and understood.
As a result of my discussions, it had been agreed that there will
be further major bilateral talks between the Community and Australia
on our trade problems. We would be mistaken to expect rapid and
major changes in the Common Agricultural Policy, but I would hope
that this dialogue will point the way to solutions of some of the
more important problems that the Common Agricultural Policy has
created for our primary industry exports.
In recognising the importance of these discussions for Australia,
the Government has decided to appoint a member of the ministry,
John Howard, as Minister for Special Trade Negotiations with the
European Economic Community. He will lead discussions with the
Governments of the nine member states of the EEC and the Commission
in Brussels on all bilateral and multilateral economic and trade
matters in which we are involved.
The Government has also been seeking to improve the marketing of
our products by reviewing the functions, composition and powers of
existing commodity boards. You will all be aware of the reconstruction
of the Australian Meat Board as an Australian Meat and
Livestock Corporation, which, by virtue of its composition,
powers and financial arrangements will be adequately equipped
to oversee and promote Australian meat and livestock exports.
Despite the need for Government expenditure cuts to help curb
inflation and restore our confidence in the private sector, the
Government has recognised the serious financial difficulties
facing many of our rural industries, and we have established
a wide range of assistance measures to help them ride out their
difficulties. Some of these measures have been designed to provide essential
short-term assistance. They include such measures as: carry-on
loans at concessional rates of interest to beef and dairy
producers; abolition of the meat export levy; underwriting of
prices for certain dairy products; assistance with drought and
other natural disaster relief; fertiliser subsidies; relaxation
of eligibility criteria for unemployment benefits to include
primary producers; and the extension of stabilisation schemes
for apples and pears and dried vine fruits.
Other assistance measures undertaken by the Government were
designed to aid longer-term structural adjustments. We have
introduced a new rural adjustment scheme replacing the old rural
reconstruction scheme with improved provisions. Assistance is
now provided not only for farm build-up, debt reconstruction and
rehabilitation, but also for farm improvements, carry-on finance
( currently for beef and dairy producers) and for household support.
/ Another
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Another important measure in this category has been the
introduction of,--the Income Equalisation Deposit Scheme. We
see this scheme as a significant means of helping farmers cope
with the problems of fluctuating incomes. In addition to these
assistance measures which relate specifically to the rural sector,
we have taken a number of other initiatives which have general
application, but which are nonetheless important forms of
assistance to the farming community.
I refer to such schemes as tax indexation, increased probate
exemption, the investment allowance, trading stock valuation
adjustments and family allowances.
Looking back to our first eighteen months in office, it can fairly
be said that we have made considerable progress. The great majority
of our rural election policy commitments have been met. None of
them have been abandoned. one initiative which is still to be
implemented is the establishment of a National Rural Bank.
Agriculture is a capital-intensive industry.
The technological innovations of the post-war period accompanied
by the sharply rising cost of labour have produced a steady
increase in new capital investment. This trend of substituting
capital for labour has had important consequences for the structure
of farm enterprises. The average size of farms, for example, has
increased to enable exploitation of economies of size.
of major-importance has been the need by farmers to resort
increasingly to borrowed funds to finance their capital needs
and operating expenditure. The Government believes that access
to finance on suitable terms and conditions has become an
increasingly serious problem for the farmer. Too often he has
had to use short-term funds to finance what is essentially a longterm
investment. Consequently, the coalition parties undertook at
the 1975 elections to establish a National Rural Bank to provide
more flexibility to cater for the special needs of individual
rural producers. A considerable amount 6f work has been done
on this proposal. We have received many submissions from
interested bodies and individuals. A sub-committee of the
Government members Rural Committee has conducted an investigation
into the matter, and we have also received a report from the Bureau
of Agricultural Economics reviewing the rural credit market. The
Government is now considering the best form which the Bank might
take. Whatever form that may be, primary producers will be
assured of better access to finance on terms which meet their
specific requirements.
Finally, may I mention that young farmers, as well as other young
Australians, will be beneficiaries of the Queen's Silver Jubilee
Appeal for Young Australians, which is being conducted at the
present time. The Government has contributed $ 2 million to this
appeal and I * hope it will be generously supported by the whole
community. Funds raised through this appeal will be available for
a number of purposes including projects or activities of organisations
of benefit to young people, and scholarships for young
people to promote standards of excellence and achievement in
their chosen vocations. / The Government
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The Government is very sympathetic to the problems of the
rural sector and will continue to provide assistance to
ensure its future viability. I believe that the current
problems of the rural sector must receive the widest possible
publicity so that better understanding will result between
city and country people.
It is important for all Australians that we maintain a
viable and efficient rural sector with potential expansion
to take advantage of opportunities as they arise.
I now have much pleasure in declaring the Annual State
Conference of the Victorian Young Farmers open.