Agriculture - going forward

This address was delivered by Ken Matthews Secretary-designate of the (then) Commonwealth Department of Primary Industries and Energy at the ARLN Conference 1998 in Canberra, ACT.

Being a part of Australia's primary industries today is being a member of a pretty hard school. Bad weather, low prices, strong competition, outbreaks of disease — all sorts of problems make it necessary to be pretty hard-nosed decision makers.

Some of you may be surprised to hear that working in government is also a pretty hard school these days too. Policy always has to be hard-nosed, objective and analytical. It needs to be firmly grounded on solid research. It must be rigorous, sharply focused on concrete outcomes, and realistic.

Certainly no self-respecting modern bureaucrat would confess to having an airy-fairy "vision" which might get in the way of good hard-edged policy advice about how to advance Australia's primary industries.

So I thought I'd try to draw for you — not a vision — but rather a sketch of some destinations which we can even now see further down the track.

Let's look out to say, the year 2020. Because I know all of us here are highly-focused outcome-oriented people, and we need to have thought about the outcomes towards which we are travelling. We need to know what awaits us twenty years down the track — or sooner.

As leaders of our sector we can then decide if we want to sign on to that sort of future or whether we need to do something — as leaders of our sector — to change it.

A few trends are clear. The 110,000 operational farms across Australia are likely to continue to reduce in number. The 390,000 farm workforce is likely to reduce also over time. This has been the trend since the industrial revolution and I can't see it reversing.

The disproportionate influence the farm sector has long exercised will continue to decline — a subject to which I want to return.

Though it saddens me as a country boy to say it, I expect that many rural communities will continue their decline. But the growth will not be in all the big coastal cities. The trend towards growth in the larger provincial towns and cities — at the expense of smaller and local communities — will continue.

Rural Australia may well continue to be misunderstood in metropolitan Australia. Given the declining numbers of rural people, and the dwindling proportion of metropolitan people with a rural background or rural relatives, the sense of alienation among many rural Australians will intensify.

The current demographic profile of Australians owning farms is already seriously "aged". The average age of an Australian farm owner today is over 55 years. The generational change which has been successfully completed in every other sector of the Australian economy still awaits us in agriculture.

Your own roles as members of the Australia Rural Leadership Program are very important in that process of generational change. The level of education and the skills training required of successful farmers in the future will be higher. Farming will be a good sophisticated business. While the special "touch" of a good farmer will be needed, it will no longer be sufficient. Finance, technology, marketing, and general business skills will be increasingly necessary.

The terms of trade of farmers, that is the ratio of output prices to farm costs, will continue to decline as it has for almost 100 years (although perhaps more slowly for the next decade). There will be no choice but for farmers to continue to search for productive improvements sufficient to outstrip the decline in relative prices.

International competition will increase in many rural industries. In some areas quarantine changes will enable imports of competitive products where Australian producers have never before faced competition. The level of government assistance and protection will continue to fall. Drought will not be solved, disease will still break out, environmental problems will mount and there will be surprises as technology develops in new areas of agricultural product and process.

How should we respond? As leaders we need to be clear about the sort of future we should be working for. We need to know our objectives. In the language of modern managers, the first step in deliberate planning is to define the outcomes we seek.