Is agriculture different from any other industry? Is the production of food a more noble
endeavour than any other human endeavour?
Many would answer yes to these questions – especially
farmers like me – and would use these arguments to justify special assistance
from Government. It is an argument that
has worked extremely well in most developed countries other than Australia and
New Zealand. The fact that agriculture
is also subject to the vagaries of the weather also is used to justify special
assistance.
The chart below compares the level of support for farmers in
different countries as compiled by the Organisation for Economic Cooperation
and Development.
Source: Australian
Farm Institute.
The data will come as no shock to Australian farmers – that
they receive the least support from their Government. In other countries, they believe that farming
is much more than just another business – it is a social imperative that must
be supported by Government.
Successive Australian Governments at State and Federal
levels have pursued economic deregulation across entire sectors of the economy
including the farm sector. There are a
number of sectors of the economy that have escaped the deregulatory push, but
that is another story.
Support to Australian producers is limited to the odd
drought payment and some support for research and development. Other countries are content to go on
subsidising their farm sectors through a variety of means.
Indeed it now seems that not only will Australian primary
producers not receive any additional support, but they will contribute a
disproportionately higher burden of taxation revenue than other sectors of the
economy (in reality “negatively subsidised”).
The recent Commission of Audit for the Federal Government recommended a
number of cuts to rural programs including abolishing the Rural Financial Counselling
Services, halving funding to the National Landcare Program, abolishing the Farm
Finance concessional loans scheme and reducing support for Research and
Development Corporations.
In addition to these measures, there has been talk of
reducing the diesel fuel rebate scheme which rebates the diesel fuel excise to
groups such as miners and farmers when they use diesel off-road. This reflects the fact that producers using
diesel off-road should not have to pay the excise to fund road building. Any change to this scheme will be the “thin
edge of the wedge” as any introduction to reduce the rebate will be ramped up
by subsequent Governments.
