Departments of Agriculture could have an important future in rural policy

The following extract is from a 1979 address by the Director of the BAE (now ABARE) and reflects dangers inherent in prophecies by agricultural bureaucrats. There are too many unknowns not the least of which is the international marketing environment.

Farm policies during the 1970s shifted noticeably in the direction of promoting productivity, adjustment and economic progress. The 1980s offer the opportunity to consolidate, reinforce and advance those policies. If this opportunity is grasped, the 1990s will welcome a continuing strong and prosperous rural sector.

The 1990s proved very different from the expectations of this respected senior public servant.

Comment:

Dr. Duffield's five bases for change in the role of Departments of Agriculture merit some discussion:

• Total value of food and fibre industries has grown because of the strong growth in value adding post farm gate.

Value adding was a policy priority for all major political parties and supported by the agro-political movement during the 1980s and 90s. It was supposed to reduce Australian primary industry dependence upon selling unprocessed product on international markets and therefore deliver better farm gate prices. While down line employment has been generated by this policy, it has not delivered on farm gate prices. Processors base farm gate prices on competitive international trade and the levels of demand for particular products not political wishful thinking.

• Rural communities in terms of numbers living there have declined and now have more sources of economic wellbeing

The Productivity Commission in its Draft Report found that only 31 per cent of towns surveyed were in decline. They were mainly inland service towns associated with dryland grazing, grain industries and mining. Therein lies the policy issue.

The Draft Report was based upon the 1996 Census. More recent data available in the Queensland Year Book 2001 demonstrates that over the latter 1990s the trend continues. Tourism has not solved the problem for grazing, mining and dryland farming towns experiencing population decline. For example, the Central West statistical division of Queensland continues to decline despite embracing tourism enthusiastically, with the Stockmans Hall of Fame (Longreach), Blackall Wool Scour, Workers' Heritage Centre (Barcaldine) and the Waltzing Matilda Centre (Winton). This should come as no surprise. Tourism is a low income industry considered overseas a repository of the working poor. Such industries will not stem the population flow particularly of the young and talented from inland towns.

• Five percent of Australians are employed in primary industries which produce less than three percent of GDP.

This microeconomic perspective is typical of a wider community view cultivated in the media to rationalize Australian rural policy direction. Overseas, a macroeconomic perspective underwrites rural policy. The United States views rural America as an integral part of a total food and fibre industry. Research has been undertaken to identify the overall importance to the economy of a stable domestic supply chain for the food and fibre industry. The fact that agriculture accounts for less than 1 per cent of GDP in the US is not an issue because research reveals that it underwrites 16 per cent of GDP and contributes directly and indirectly to 17 per cent of total employment.

We should ask ourselves where is similar work on the Australian situation? Departments of Agriculture should have a vested interest in this area of research.

• Primary industries have a poor image among some members of the public particularly in urban communities.