PRIME MINISTER

FOR MEDIA '  |0? SUNDAY 1 JUNE 1980

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ELECTORATE TALK .  .

Over the past few years Australian farmers have experienced  the highs and lows of life on the land.

There have been both bountiful seasons and the curse of drought.

Cattle were shot as‘virtually worthless only a few years ago. Â·  Ã¢ÂÂ

Now, livestock are much sought after once again.

The wool corporation emptied its warehouses as wool again  became the golden fleece. .  .

In fact, the recovery of our great rural industries from the  deep depression of the mid-1970s has been quite remarkable.

In the past two years, the value of rural production and exports  has increased by 60 per cent while real income per farm has more  than.doubled to be 75 per cent higher than in the first few years  of the 1970s.  ,

The whole nation has benefited. >

And yet again Australian farmers have demonstrated their  traditional resilience and the rural sector has been central to  strong and balanced economic growth.

The fruits of our recovery can be seen in such diverse ways as  the revival of .business in country towns, improved company returns  and the renewed interest in agricultural training courses.

Nowhere is the benefit to the nation more evident than in the  massive contribution to Australia's balance of payments of the  $3 billion increase in rural exports over the past two years.

As we enter a new decade, it is timely to remind ourselves of  the continuing importance of rural industries; to reflect on .   the lessons of the 1970s; and to look at what the 1980s has in  store for Australian farmers.

At a time when mineral energy development attracts so much  attention - and this is completely understandable - it is not  often appreciated that this year wheat, and not coal, is . Australia's largest single export earner and that the rural -

sector contributes 43 per cent of Australia's export earnings.

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I am sure that the mid-1970s will never be forgotten by country  people.  .  .  Â·

In the devastating year'of 1974-75 alone,  a year of reasonable .   seasonal conditions, unit farm costs rose by 30 per cent and  real income earnings fell, by over 40 per cent.

The strong recovery from those depths is due not only to reasonable  seasons but also to the influence of a favourable economic  environment achieved through sound and consistent economic  nfenagement. Ã¢ÂÂ   .  .

Australia's inflation rate is now significantly below the OECD  average. As a result, our competitive position in world markets  is better than it has been for many years.

One lesson we all, learned from the mid-1970s was that no sector  of the economy is more devastated by runaway inflation than the  export-orientated rural sector. For as costs rise, our. capacity  to compete overseas is severely reduced.

During the past five years, Australia's primary producers have  responded to the Government's initiatives designed to create, a  more stable -economic environment.. The .creation of the.  Primary  industry Bank, the Income Equalisation Scheme,  and the Rural  Adjustment Scheme have all had beneficial effects on the viability

of rural industries. .

To secure continuing improvement in the viability of the rural  sector, the Government has also:

. significantly modified the tax averaging provisions

. .  introduced in full the Fuel Price Equalisation Scheme

.  increased the floor price for wool from 250 cents in 1975-76  to 318 cents per kilo. .

. abolished federal death duties .

.  reduced fluctuations in returns to wheat growers and  facilitated, earlier payments for wheat deliveries

.  selectively underwritten prescribed dairy products

.  provided special, depreciation provisions for buildings  for the storage of hay, grain and fodder

.  and recently introduced new ‘ taxation concessions to assist  in increased water storage. _ _

Under these initiatives, wheat plantings have increased by 30 . per cent over the past two years. The value of wool production  has increased by 38 per cent in the same period. The dairy  industry has undergone one of the most successful adjustments

in Australian agricultural history. The sugar industry is at  last enjoying better prices, and it has the security of long-term  contracts for a large part of its exports. Smaller industries .   such as oil seeds, cotton and rice are growing strongly. Livestock, herds are being re-built. .

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Of course the best news for producers and for all Australians  in the past week has been the good rain over much of the rural  area. The outlook for the 1980-81 season is now better than it  was a few weeks ago when drought was tightening its grip. .

I am advised that the 1980 wheat crop is now off to an encouraging  start and if adequate follow-up rains occur another good harvest  is likely.  Pasture growth in many areas will be dependent on  temperatures from now on, but hopefully hand-feeding should become  less prevalent. Surface water supplies have improved and herd  Ã¢ÂÂ re-building is likely to gather momentum. As markets for rural .

produce remain strong, the rural economy looks set for another  reasonable year. No-one know better than the farmer that in the  good times we must consolidate our advantages and build on our  opportunities.  So it must be with Australia. .  .

We cannot allow the significant successes of the last five years  to be eroded by the faulty economic management and defective . policies which dealt such a body blow to the rural sector in the  mid 1970s. . . .  .

We enter the 1980s with the kind of stability and international  competitiveness that should act as an.incentive to all of us. In the years ahead our geographic location will be one of our  great advantages. W e .are a net food and energy exporter in a  region with expanding demand for Australian goods and services of  all kinds.  .  .

This provides for Australian primary producers - as it does for  all others - a challenging role. It is a role which the Government  is determined will be fully and productively played out.

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