3 March 2009
DAFF09/93T
Transcript, Minister for Agriculture, Fisheries and Forestry, Tony Burke
ABARE Outlook Conference 2009, Opening Address
National Convention Centre, Canberra
E&OE
Subjects: ABARE Outlook Conference; primary industries achievements; drought policy review; quarantine and biosecurity review; weed management and Landcare; global recession; food security; Doha; protectionism; Carbon Pollution Reduction Scheme; soil carbon and emissions research; biochar
TONY BURKE: Finally I get to open an ABARE Conference. It’s traditionally done by the Agriculture Minister, although it was abruptly taken from me last year by a man by the name of Kevin Rudd, who became the first Prime Minister to open this conference.
It’s my great pleasure to be with you here again, this time for ABARE Outlook 2009, at a time where we’re able to look at some of the achievements for the last twelve months and then look at how the international context has changed dramatically from 12 months ago.
To work through the policy pathway is to make sure our primary industries remain ahead of the curve and are in the best possible position to thrive into the future.
The achievements since the last year have been many. Of course, there’s been changes on the way through as well. No change is more extraordinary that what we’ve seen over the last few weeks, with fires in our south, which are still burning, and floodwaters our north, which are still covering land.
A two-week flood can be fantastic for the soil. [But] we’ll actually find when those floodwaters recede after six weeks that the landscape will look more like a drought.
We’ve also had a number of policies which were in the beginning stages last year and have now been implemented. We now have a new wheat marketing system where growers have been able to choose who they want to sell through when they’re exporting. So many have taken up that market power in holding back on the sale of their wheat while prices were low and waiting for prices to improve before they decided to shift from on-farm storage back to the marketplace.
Growers have taken opportunities in making their own decisions in this world economic climate, which was a market power that they simply didn’t have previously.
We’ve also, as of last Friday, received the final report on the review of national drought policy. We went through the three areas of study on that: first, the climatic study by the CSIRO and the Bureau of Meteorology; secondly, the work of the social panel, acknowledging that drought is not merely an economic issue but has extraordinary social implications as well; and finally, the draft report in as of last Friday, the final report of the Productivity Commission.
That all goes into a Cabinet process and a Budget process, to make sure that we can do what we talked about when this whole process started. Making sure that every time primary producers interact with the Government, they go away better prepared for the future. Making sure that we can move from a crisis management approach to a risk management approach, to minimise the number of people who ever hit crisis.
The Beale Review into quarantine is also in. To go down the path which I’ve articulated many times, where we have a system which is not only truly science-based, but is seen to be science-based, both in Australia and around the world.
Not everything in terms of quarantine biosecurity has been a positive over the last 12 months. Having celebrated being the first nation in the world – the only nation – to successfully eradicate equine influenza, the Senate then blocked the passage of the mechanism by which the horse industry could be part of future emergency measures, should an outbreak ever occur again.
This leaves the horse industry exposed as the only area in livestock where we are not able to conduct an eradication program again. When issues that have been bipartisan become partisan, we can end up in these sorts of problems. And the horse industry is now having to work through the lack of protection that they face.
Since the demise of the Weeds CRC we now again have a National Weed Centre. And what we’ve previously known as the NHT and the national Landcare program, as separate programs, have now found homes under a system known as Caring for Our Country.
This minimises the amount of paperwork that producers have to be involved with in the funding applications, while preserving the strong identity for Landcare and the strong natural resource management work which has enjoyed bipartisan support for such a long time.
But all those domestic issues are always going to be relevant to the extent that we’re dealing with external pressures coming down on us. Last year I summarised those external pressures as being globalisation – I think I used the phrase ‘shrinking world’ – and climate change.
Those concepts have now taken three separate identities: what was then called the global financial crisis but now is a global recession, the global food crisis and climate change. And I want to work through, in each of those three, the policy changes and policy responses that the Government now needs to work through with producers, to make sure that we are well-positioned for the future when dealing with these external pressures.
The challenge of the global recession has been deeply complex in its impact on agriculture. The immediate hit has been a credit crisis. And that does make it more difficult for people to be able to obtain credit. Fortunately some of the guarantees given to the banks by the Federal Government have meant that access to credit has not been as difficult as it might have become. But that’s certainly the first impact.
The second impact has been that some of the major financial institutions around the world are losing their own equity or even their entire identity. Long before we had the Wall Street story that has emerged overnight, we had the collapse in Lehman Brothers. From that moment, you could see shifting in the grains futures market. Simply by taking some of the speculators out of that futures market, that had an immediate hit on some of the prices attached to soft commodities.
These impacts have continued to flow through. There has been some easing, for example from farm inputs. Some of the wild escalations that were going on with chemical and fertiliser prices have certainly eased somewhat. But the output value has eased at the same time. Fortunately, we’ve been to some extent insulated by the fall in the Australian dollar. Although, of course, that works both ways given that so many farm inputs are imported.
I’ll say it now for the global recession, it’s the same for food security and it’s the same for climate change. In every case the responses converge on a single word. Our policy responses to the three great global pressures – the global financial crisis, or the global recession, the global food crisis, and climate change – all converge on the word “productivity”.
In all of those challenges that I just went through with global markets, the best response is to find a way of driving productivity. For the challenges posed by the global food crisis, and food security, let’s find how that all lands on productivity.
To understand the responses we need to understand the nature of the food security challenge around the world. When it first occurred it was being reported, particularly through North American media, as though the whole challenge of food security was being caused by biofuels policies.
There’s no doubt, if you increase demand beyond food products to fuel products over the same parcel of land, that does have an impact. On latest projections the global food crisis will soon see one billion people going to sleep hungry each night around the world. It would be a massive mistake to land that purely at the feet of the biofuels industry. It’s just wrong. And it ignores the long-term pressures and constraints which have been emerging long in advance of North American biofuels policies.
Those changes can be described in a number of ways. One is the growing world population. The second is the rate of productivity growth within agriculture around the world having slowed from where it was decades ago.
The third pressure is actually a good thing: as the developing world has become wealthier, there has been an increased preference for protein in the diet – for meat. Therefore the total efficiency from the same parcel of land has been harder to gain. And that has put further pressure on food stocks.
It’s also the case that with climate change, to some extent, through water availability, increased drought around the world and massive changes to weather patterns and therefore the reliable rainfall on which cropping depends being harder to come by in parts of the world. Finally, the impact of more major weather events, wiping out large parts of the rice crop around the world last year. All of that combines to have a major impact on the availability of food versus a demand for increased food.
So all of those issues come together. How do we then respond? There’s four areas of response. And generally the public debate only gets to the first one. The first one, of course, is direct aid. When people are hungry in the poorest nations of the world, the first priority from governments around the world, quite rightly, is to try and make sure people are being fed.
But if that’s simply done by direct food aid, it likely carries the added consequence of wiping out local farmers. So it’s important that capacity-building be the second leg of the response to the global food crisis.
The third part of the response to the global food crisis, though, has to land on improved productivity on food-producing nations like our own. We need to make sure that we understand that when there’s increased pressure on food, it’s not simply an issue of hunger in the poorest nations.
It’s also increase in demand and food prices going up throughout the middle-ranking nations on wealth. That provides the nexus between social responsibility and economic opportunity. Both put a demand on us to further drive productivity.
The fourth area of course is: no matter how much food you’ve got around the world, if you want to contribute to solving food security problems, then you want to make sure that food can move. And the trade barriers to food remain unreasonably high.
There was a lot of hope last year around the Ministerial meeting in Doha in July. And for a number of reasons some of the key nations were unable or unwilling to make the hard decisions necessary to bring Doha together. Fortunately, in December last year, meetings were held which mean there are revised draft negotiating texts which take us a bit further in both the agricultural and non-agricultural areas, to at least get back to the point where negotiations last fell over.
Doha is regularly viewed as being purely part of the answer to the global recession. But it is also part of the answer to the global food crisis.
In Madrid [at a high level meeting on global food security] earlier this year, I was more than a little shocked at the rising conversation of protectionism, and to hear people argue that trade is the problem. It is not. Australia is on the correct side of this argument. And delivering a conclusion to the Doha Round is absolutely in our economic interests as a nation. It is in the economic interests of the globe. And it is in the food security interests of the globe.
There’s a further international negotiation later this year which is of similar importance: the discussions that will start to take place at the end of this year in Copenhagen. This is where the issues start to come together as we shift to climate change.
Australia will continue to try to make sure that we have a science-based system which does not unduly disadvantage food production. One of the problems is we can’t disaggregate the human intervention on land, as opposed to natural cycles of growth and bushfire.
Therefore we’ve ended up with an imperfect system where tree production gets counted as a sink, as it should. It should actually get counted in a more effective way which accounts for carbon storage as well. But we don’t give proper credit to the carbon sequestration opportunities available, for example, in well-managed pasture.
You’ve only got to be a child in the very early years of high school before you learn that all the green bits help with photosynthesis. But the green bits at the end of branches at the moment, we count, and the green bits growing straight out of the soil are very difficult to count.
To make sure that the world system does not disadvantage food production, and that we are in the best science-based accounting model that we can possibly be – those interests will be advanced by Australia’s negotiating team as we move towards Copenhagen.
The challenges of climate change are shown in a whole lot of reports on Australian agriculture. There was one at the very end of 2007, from ABARE, which looked at potential impacts of climate change on Australian agriculture.
There was one that came out a couple of weeks ago that looked at impacts of the Carbon Pollution Reduction Scheme on Australian agriculture. Each of them came out with particularly dire predictions. Although, I must say, the ABARE modelling about the impacts of climate change itself were a good deal more dire than the report that came out a couple of weeks ago.
But each of these reports had a precondition within the scenario which we will not allow to ever be true. All the modelling was based on there being no adaptation. All the modelling was based on: this is what will happen if we change nothing. And of all the things on the table as an option, changing nothing is not one of them.
The Government has not made a decision about whether agriculture will be included in the Carbon Pollution Reduction Scheme subsequent to 2015. We have a disposition that we would like to see the Carbon Pollution Reduction Scheme be as holistic as possible. And that means a disposition towards including agriculture. But while there is a disposition, there is no decision on that. And that decision will be made in 2013.
But agriculture, fisheries and forestry, as primary industries, are more affected by climate change than pretty much any sector of the economy. And therefore we, more than any other sector of the economy, have an interest in being part of the solution.
If you don’t have the incentives or the penalties with having emissions counted directly through the Carbon Pollution Reduction Scheme, why would you want to be part of the solution, other than the principle, which farmers have been pretty good at, of just wanting to do the right thing?
This is why I’ve been determined to drive the research into this area of study, so that we can have synergy between what reduces emissions and improvements in productivity. That’s what the research announced last week was very much about.
A lot of this work matches what’s been done for a very long time. When Landcare first kicked off, long pre-dating any of the research I’m about to talk about, the issues for Landcare were biodiversity, protecting the resource of the land itself, and improving productivity.
Little did we know then that the fantastic work of Landcare would also help with improving soil moisture as each drought came past. Little did we know that when we weren’t in drought, that work would be critical in combating salinity.
Certainly very few of us were aware that that work would provide ways of sequestering carbon within the soil and being part of the solution in the greatest global challenge in a new century.
Agricultural emissions are the third highest area of emissions for Australia. They’re 16 percent of our emissions. And of that 16 percent, seven per cent is methane and 23 per cent of it is nitrous oxide. The remainder is largely, but not exclusively, CO2.
Now methane gas remains in the atmosphere for about twelve years. CO2 stays in the atmosphere for about one hundred years. And nitrous oxide stays for roughly a hundred years, possibly longer depending on the science. With methane, you might think, “Well, it only stays for twelve years - not that much of a problem.”
But over one hundred years, emissions of methane per tonne have 25 times the impact of emissions of CO2. Methane has twenty-five times the impact of emissions of CO2. Nitrous oxide - 298 times the impact of emissions of CO2. That’s why it is so important to find ways to drive research and development to give farmers and primary producers as many tools as possible to reduce their emissions on-farm.
Last week announcements were made on reductions in methane and research under Australia’s Farming Future. Today I can announce two new research initiatives that focus on the soil.
Last year at Outlook the Prime Minister highlighted the importance of investigating how better soil management can be part of our response to climate change. Two new reports to the Bureau of Rural Sciences have driven home the importance of soil in reducing carbon dioxide emissions in the atmosphere. The research found that even small increases in the amount of carbon retained in soils could make a big contribution to reducing greenhouse gases. And there are other benefits, such as improved erosion control and habitat for increasing biodiversity.
The potential benefits are great. But the report also highlighted that there’s more work to be done before we can include organic soil carbon in the trading scheme. We need consistent methods of measurement. And we need to understand the effects of different farming systems and land-use practices on the permanence of soil carbon.
The Government’s new soil carbon research program aims to help close these gaps in science. It will involve nine projects across Australia worth $20 million, including $9.6 million from the Climate Change Research Program. Programs will be established in all states and the Northern Territory to look at three things: changes in the total carbon and the soil profile in response to current farm management practices; stocks of soil carbon under various soil types and climate combinations; and thirdly, changes in these stocks with improved farm management practices.
Examples will include sampling of cereal, sheep and beef properties in south-eastern South Australia, particularly the Fleurieu Peninsula, Kangaroo Island, the Mid North, lower South East, Murray Mallee, and the Eyre and York Peninsulas. Perennial pasture sites will also be identified and sampling undertaken throughout the country, particularly in Western Australia and NSW.
The overarching project, run by CSIRO, will coordinate these research programs and, importantly, provide a nationally standardised methodology for the sampling and analysis of soil carbon.
Over time, there will be increasing amounts of consistent information included in the national datasets. This will improve the understanding of soil carbon stocks and the impacts of management practices on soil carbon. It will also provide additional data to improve predictive modelling and aid decision making.
Complementing this initiative is the Government’s Nitrous Oxide Research Program. Made up of nine projects, it’s worth $11.8 million, with $4.7 million coming from the Climate Change Research Program. The focus here is on the development and use of a nationally standardised methodology to collect of data on nitrous oxide emissions from agricultural soils. [Nine] projects will monitor nitrous oxide emissions from soils under various management options from five key farming systems – sugarcane, cotton, dairy pasture, and rain-fed and irrigated cereal cropping.
Nitrous oxide accounts for around 23 per cent of our agricultural emissions. Some of these emissions come from the burning of crop residue and savannahs. But most nitrous oxide comes from soils when there are lower levels of oxygen in the soils.
Soil oxygen supply varies with soil type and differing agricultural practices. We need data from across the country that shows the nitrous oxide emissions from soils in different locations and soil types and under differing management practices.
The critical aim of all these research initiatives is fundamental to our response to climate change: reducing emissions whilst boosting productivity in agriculture.
Post the minerals boom, we talk a lot about silver as a commodity, and usually in terms of silver bullets. From time-to-time people come up with concepts of a silver bullet where we can do just one thing and instantly all of our emissions problems will be solved. These programs, whether about mass tree plantings, about one corner of the total science on soil, or wherever they are, usually look too good to be true because they are too good to be true.
That’s not to say they’re not part of the solution. That’s not to say that the Government’s not doing work in areas like biochar. We’ve been doing it for some time and we continue to do so. We need to continue to push the edges of research in all of these areas.
But we also need to consider emissions in a different framework as far as primary production is concerned. That’s with one word: waste. Once we view emissions – whether it be excess CO2, methane or nitrous oxide – as a form of farm waste, we can see clearly how improvements in R&D in this area will improve productivity.
Whether it lowers the demand for chemical or fertiliser use, whether it improves growth rates for plants or animals and whichever path it goes down through feed efficiency, what we’re actually about here is trying to eliminate another form of farm waste. The way to guarantee a good take-up on the ground is to make sure that lowering Australia’s emissions profile matches up with an improvement in productivity on-farm.
Climate change, the global recession and global food security – each of those issues we’re in the middle of. We are not in the middle of the Carbon Pollution Reduction Scheme this side of 2015. But we’re in the middle of the impacts of climate change. We’re in the middle of the impacts of the global recession. We’re in the middle of the impacts of a global food crisis. If we can focus on improving productivity, then we won’t simply manage our way through the current challenges facing the globe. We’ll be ahead of the curve. We’ll be well-positioned for the future. And indeed, we will thrive.
ENDS