Some of the prices paid for stock across Queensland during the past week have been the lowest in decades, Agforce said today.
The rural lobby group said seasonal and market factors were deflating beef cattle prices and highlighted the need for flexible policy arrangements to support Queensland farmers.
AgForce Queensland General President Ian Burnett said the factors contributing to the current market climate had been gathering steam over recent years and were now bearing down on profit margins.
“The issues impacting on these prices and other operating conditions are varied but a number of them have been accumulating for some time,” he said.
They include:
- The high Australian dollar
- High debt levels as a result of borrowing to purchase property at elevated prices followed by a correction of the market over the past five years
- The Federal Government failing to secure Free Trade Agreements with key Asian trading partners
- The one month suspension of live cattle exports to Indonesia in June 2011, and
- Increasing input costs, including fuel and electricity
“The combined impact of these elements has been compounded by bushfires, consecutive flood events and now drought across more than a third of the State,” Mr Burnett said.
He said Queensland primary producers were world-leading farmers who incorporated risk management efforts into their business models and had a proven track record of productivity gains.
However, the alignment of so many negative factors at one time was damaging even the most proactive and sustainable rural enterprises.
“There’s no doubt short-term assistance measures are urgently required to help our beef producers, as well as other struggling agricultural producers, through the present challenges they face,” Mr Burnett said.
“However it’s imperative we focus on the development of flexible policy approaches that will restore productivity and profitability to the sector – not just in the immediate term, but for the security of primary production into the medium and long term as well.
“AgForce Queensland has invested significant resources into the ongoing development of achievable and realistic strategies to address declining profit margins and difficult operating conditions.”
Agforce believes key policies for both the short and longer term include:
- Facilitation of professional, cost neutral debt mediation services
- Government commitment to business support for droughted producers who’ve demonstrated reasonable preparedness measures
- Reform of the Vegetation Management Act (1999); removal of the Wild Rivers legislation; and further reductions in other rural red tape
- Continuation of the existing uniform electricity tariff policy and community service obligation, as well as the continuation of agricultural electricity tariffs
- A halt on further leasehold rental increases until an affordable free holding methodology is finalised and an alternate rental methodology is made available to landholders who don’t embark on tenure upgradesk
- Prioritisation of a range of Free Trade Agreements – in particular with Korea, China and Japan – and revitalisation of the live export trade to Indonesia
- Removal of stamp duty on inter-generational sales
- Establishment of a new visa category or the introduction of concessions to 457 visas to allow sponsorship of semi-skilled agricultural workers to deal with rural labour constraints
- Relaxation of a range of transport requirements for drought-affected producers to enable stock to get to sale
“The current pressures on profitability … did not develop overnight and there is certainly no single silver bullet solution to alleviating the weight of these problems,” Mr Burnett said.
“However, we are the best suppliers of premium primary produce in the world and this will underpin our longer term ability to remain a viable and vibrant industry.
“The storm of events currently hurting us only further emphasises the value of the work AgForce is doing in policy creation and advocacy and our ongoing efforts to ensure the security of the sector for generations to come.”
