Outer Suburban/Interface Services and Development Committee

CORRECTED VERSION

OUTER SUBURBAN/INTERFACE SERVICES AND DEVELOPMENT COMMITTEE

Inquiry into sustainable development of agribusiness in outer suburban Melbourne

Melbourne—19 May 2009

Members

Mr G. Seitz Mr K. Smith Mr M. Guy Ms C. Hartland Mr D. Hodgett Mr D. Nardella

Chair: Mr G. Seitz Deputy Chair: Mr K. Smith

Executive Officer: Mr S. Coley Research Officer: Mr K. Delaney Committee Administrative Officer: Ms N-M. Holmes

Witness

Mr Eric Sharkey Drylands Farming.

Mr Sharkey made an affirmation.

68 The CHAIR—We have Eric Sharkey from Drylands Farming.

Mr SHARKEY—My address is 315 Sharkey Road, Balliang East, 3340.

The CHAIR—Thank you very much. You know the procedure. Obviously you have been around a long time if you have a road named after you, the family name.

Mr SHARKEY—Unfortunately, I am not sure if that is good or bad. Thank you, Mr Chairman and other members. Some background: we have been operating in the Balliang East area for some time. It is roughly 20 kilometres south of Bacchus Marsh and about 40 kilometres north of Geelong and we are east of that road. We are basically in the Werribee grasslands, basalt plains area of Werribee and my fifth generation has just hit the ground, not running yet but he is clearly just about to walk.

The CHAIR—Congratulations.

Mr SHARKEY—What I propose to do, Mr Chairman—and these are my comments on our particular area—I thought I would refer to the terms of reference and perhaps take them one by one with some comments on those, with your permission.

The CHAIR—Certainly.

Mr SHARKEY—The types of agriculture that we have in our area—and I should point out this is the typical peri-urban area and I guess I will make some comments about the interface which is east of us. Traditional cereals is the main activity in the area, particularly malting barley. It is a renowned malting barley area and has been for many years. Animals, of course, and that includes most types of animals. We do have some intensive—which I perhaps will talk about a little bit later—which is similar, interface is similar, but they are smaller areas and they do have perhaps more complications which I will talk about in a moment.

Number 2, the role of agribusiness in economic growth, I think it is fair to say that all the farm families in the area are fully employed on those farms which is great. We do have a bit of labour component through the district and that includes a free-range piggery on our property which employs eight full-time people and some part-time people. We are also—particularly in the animal side of things—very conscious of any health issues that may be around, and to some degree it is also fair to say that in those areas we self-regulate so we are abreast of current concerns and problems and we try and stay above those problems. I would like to think sustainable, and that includes new technology. I would like to mention we have a group of young farmers— my son included—in the area and I am very pleased about, probably 15 or 20. Just about every farm has a representative who is a young farmer. They have sought information and we have sought a little bit of funding recently to do some investigative work in soil moisture testing. I will perhaps talk about that in a minute.

It is worth pointing out, particularly in the grain side of things, that the highest productivity in the last number of years has been through grain production. It is around about three per cent or 2.6 to three per cent. That is clearly above most industries. The only industry that has a higher productivity I think is telecommunications. We like what we are doing, we like where we are. We think we have a role to play and we think we deserve some support, and we would certainly like to stay there.

The role of planning—and it has been mentioned before—I think our biggest problem is that piece of paper that we do not really see yet and that is the right to farm. That is probably our biggest issue in an interface, peri-urban situation. The planning part must make plans so that it does not cause conflict. By that I mean, particularly in the urban rural area, where we do see problems with dust and spray—and that has been mentioned. We do see and hear about problems of night work, noisy work. Thankfully that does not worry us too much yet, although the spraying one—and Geoff Fisken talked about that before—can potentially be a little bit of a problem if we diversify too much, inasmuch as we can cause problems to horticultural and particularly viticultural crops, and that is a real issue, not so much to us yet but potentially.

The other problem that we do have is any stock movement in particular, not quite to the degree that Geoff was talking about either, but maybe there should be some training that people need to take when they get their licence, but they do not understand stock on roads. We also have machinery movement which is also a little 69 bit of a problem because of the general oversize of it these days.

Number 4 is the food production. We are facing a water problem nowhere near the intensity of Frank but we certainly are having serious problems with seasons. Our food production is certainly sustainable given that we receive adequate rainfall, but it still has to happen with good planning. I certainly see the role of environmental in all of this and I think you will see of that this afternoon. I believe you are going to see some of the Grow West sites which is an offshoot of the Port Phillip-Western Port catchment. That is working particularly well and I would like to think that would continue. Since Melbourne Water took over management of a greater part of the Werribee-Little River catchment.

Although we have been hit with a fee, as per usual, I think that is more than offset by the great work that they have been doing, particularly Little River where I have a frontage to, and with that work, mainly on tiger pear, they are doing an excellent job there. I think we can work side by side. Frank is a good example of this: Bacchus Marsh, or around Bacchus Marsh, has a great ability to be close to markets and the words are now that there are low food miles. There is the transport component which is really quite important.

Impediments: clearly the rates are too high but we will all say that. Of our costs—capital costs, fixed costs, whatever you like—probably third in line of those costs to us is rates, the first two being fuel and fertiliser. It is clearly an issue. My personal opinion is—and I know the VFF have an opinion, and that opinion is it should be house and curtilage. I believe that is the way they have always taken it. I do not believe that is the way to go. I much prefer a process be put in place where productivity values can be put on that land and therefore that controls the rates system of that area. That is pretty easy to do. Any department or person can do that, jointly with locals or whatever. You could have a blanket approach to some areas and a productivity valuation be put on that line and you are valued on that productivity. I am not sure that is going to come up.

The other thing that is worrying us too—and that is partly as a result of the fire—is the huge impost upon our insurance costs that fire service levy has. I have learnt in the last few days that that has gone to 68 per cent. That is 68 per cent of every dollar that we pay on insurance premiums, we pay 68c in the dollar levy for fire service levy. I think it is not equitable, it is disadvantaging the people who do pay and do the right thing and pay insurance. Of course on top of that we have stamp duty and GST. I really think there has to be a better way of handling that. That is in the rural area. In urban areas I believe it is only in the mid-20s, 26 per cent or something like that. There is a problem there.

Pest and weeds are a problem. Some are self-inflicted, I have to admit. Once again in the interface areas they do have much more trouble with pests than we do, including wild, roaming dogs et cetera. We have a little bit of a problem where we are; we have seen a certain amount of land banking going on where people come in and buy some very large blocks of land to sit on, so there are some disadvantages in that. It is fair to say too there are some advantages, because as farmers we are unable to pay anywhere near the sort of money that these guys are paying. There is some opportunity for some of the younger locals to capitalise on those areas and lease and share some of that land so it does not sit there being unmanaged, so that is good.

Another issue too, I consider we have poor local infrastructure for our intensive side of our business and that is water. Clearly water is a problem. Personally we rely on groundwater which we have a number of stock and domestic bores, and a couple of commercial ones. Roads are also an issue. We have roads that are back to bare rock and it is very hard to get councils to even talk about it, let alone do something about it. The other thing I think is interesting for some intensive, we lack three-phase power. You would think that is a bit silly. We are 45 kilometres from the centre of Melbourne but we do not have three-phase power, and any enterprise that has happened in our area has to rely on its own source of power supply. We even struggle to get single phase to some of these enterprises.

Number 6 is what is working well—niche or otherwise. Clearly horticulture is the mainstay of the area and I commend people like Frank, and all the problems and trials that he has to go through. What he is doing in the area is commendable. Therefore we must have guaranteed water. We have some viticulture in the area and we have some small backyards that are doing different things—successfully or not, I am not sure. In Balliang we have diversified a little bit. We have some grain storage and handling. I mentioned a free-range piggery. We have a feedlot. We do have vegetables. A market gardener from Werribee has bought some land in Balliang and he is developing that I think to grow broccoli. He is using a quite significant supply of groundwater, deep 70 groundwater, to bring that into supply. I mentioned before about low food miles. We do have the ability to be close to markets, close to the main area of Melbourne. As far as animals go we have trading places like Ballarat Saleyards, Geelong Saleyards, but unfortunately they are—particularly Geelong—under a fair bit of pressure. We may see the demise of that. Ballarat are in a bit of a bind at the moment. They talk about relocation but are unable to bring that forward. I do believe in the auction system is not for everybody, not for all stock, but it is the market indicator and I think that is important.

Examine exemplary programs: I tried very hard but I am afraid I could not think of too many exemplary ones. Starting with local government, local government are fine but they have tried to come into the area and perhaps do some planning on agricultural activities. It has been done by other people. I do not believe it should be their role. I do not believe it is their core business, so I would hope that they perhaps do not go on with that. Whether the department lacks funds, I am not sure, but it is not consistent. Their extension is there but it lacks experience and it does lack the consistency. They will come in and they will work on a role and then they perhaps move on or personnel will change and so we are seeing a little bit of that across the area. There is closure that the previous speaker spoke about. I do not have a problem so much with that. For years perhaps governments have walked away from that sort of role but it is absolutely essential that governments still remain that third party when it comes to new research, research done by private enterprise, that departments can still be there and assess that research and give us the information, rather than a commercial arrangement that might weaken. We do not always trust some of the commercial people. Whether it be on national variety trials of grain or whatever it may be, I still believe in the absolute role.

The research has been reasonable at a department level and a government level and I particularly commend them on the role that they have played and the money they have put into Latrobe University at Bundoora where they have been working now for some years on genetically modified wheat to the point where it is almost to be released. That supposedly will give us some cross-tolerance and also some drought tolerance. That sort of work is very commendable and if that is what the role is then more of it. I will need to be the umpire which is what I have said.

Federally—once again I am not sure exactly what happens at all these levels. [EC] is the main one— Exceptional Circumstances—and they have a role to play in that but I am not sure that it has been focused exactly the way it should at the moment. It is obviously very difficult to manage. Other people that we might talk to, mainly private people, are [SFS], which is a bit of a spin-off doing their raised beds, Southern Farming Systems publications. GRDC do a great job and obviously we have other people in other areas like wool and sheep. I hope that, for instance, live sheep export which I am a great supporter of, and we use extensively, does continue.

The future: I think more of the same. Things hopefully will not change too much in my area, the peri-urban area, but food security is a priority. We must, if at all possible, reduce our imports for health and employment. We need to at least keep an eye on red tape and if possible reduce the red tape that is emerging and we should embrace the technology even more than we are at the moment to all primary production, not only in what I am interested in but certainly to all primary production. That includes using our best resources, and our best resource unfortunately is dwindling, and that is water. I personally have talked long and hard about Melbourne Water, Western Treatment Plant, getting that up through the Balliang area and into Bacchus Marsh with unfortunately little result, but that is a top priority.

As mentioned by Western Water people, we are using biosolids very successfully and they are coming out of the Barwon Water Treatment Plant, so they are some of the things we are trying to capitalise on and use in our area. I will finish there, Mr Chairman, and hopefully it was not too boring, and I will answer any questions.

The CHAIR—Thank you very much, Eric. Since you have gone through all these points, number 8, did you go overseas? Did you ever go overseas and look at farming over there?

Mr SHARKEY—No, not really. I stumbled on that, I must say. I did not quite know how to perhaps answer that. The issues I see is we still export about 80 per cent of our product, so the international market is very relevant and very real to us. The issues around may be out of our control, things like the dollar and certainly things like the people we are competing against who do not have to export very much, and they can do it very cheaply because of their subsidy system. 71 The CHAIR—I notice when we are talking about the western basalt plains that all the windbreaks are virtually old ones. I have not observed that new ones have been planted. When I say 'new', 20 years old, 10 years old. They all seem to be around about 50 to 100 years old. We are in windswept plains here.

Mr SHARKEY—That is right. I can show you personally on our place probably four to five kilometres of trees that could be anything from 10 to 30 years old that would hardly be much taller than you and I. It has been very difficult to do that. We have not had a lot of success. I am not big on varieties but we have tended to try and go for some quick-growing typical indigenous type trees but it is not working. We do have one of the bigger stands of the bull oak, casuarina—whatever it is—in Southern Victoria on our property, so we do take some pride in that. We have fenced that off at various times to try and get regrowth. You are right, it is very hard to establish.

Mr GUY—Are there any interstate examples that you are aware of in relation to right to farm, either legislation or ministerial orders or schedules or anything that stand out that Victoria should be looking at? Any interstate examples—Queensland or New South Wales—that manage this issue better than what we may, or we may be able to look at?

Mr SHARKEY—I could be parochial and say, no, but I am not familiar with any. The one that I perhaps like—and do not know a lot about—is over in South Australia there is a recycled market garden and it is called Virginia.

Mr SMITH—I think it was done by the private sector, a company called Earth Tech who are very successful. They did the one down near Clyde and used water from the south-east purification plant down there, much to the chagrin of the minister at the time who would not give a permit for two and a half years because he was afraid he was going to be blamed for selling off our water supplies.

Mr SHARKEY—Yes. I read a little bit about that. I thought that was very successful.

Mr SMITH—Very good, yes.

Mr SHARKEY—Can I pre-empt what Don was going to say—

Mr NARDELLA—I did not say anything.

Mr SHARKEY—Said before about excision.

Mr NARDELLA—Yes.

Mr SHARKEY—I think there is a bit of confusion about excision and that may be from the VFF, it may probably be from me. There are a couple of areas, and definitely Geoff Fisken is right when he says that we should not give anybody the opportunity to excise land in the area when it is fully developed farmland, highly productive farmland. I think where the confusion comes a little bit—and I support to some degree—is if you need to or would like to excise some land for a family member or a long-time farm worker, and I still do not necessarily agree with excising it—and you probably can get a permit to build a house on the property, but what people are telling me is that banks and other funding organisations will not fund a person to build a house on land that is not owned by them. It makes it more difficult. That is where perhaps the excision may be possible where it be, say, one to five acres or something, but excising land just for the sake of it, I do not believe in it either.

Mr NARDELLA—You will get extensively quoted as well then.

Mr SHARKEY—To some degree that is the VFF position.

Mr NARDELLA—Their position is a bit more amorphous in saying, yes, they support rural lot excisions but, yes, they also support the right to farm, and they are mutually exclusive as far as I am concerned because inevitably those blocks of land and those houses are sold off to the lifestyle changers 72 because that is where you get your maximum return in that rural lot excision and that is where you get your problems.

Mr GUY—That does not make them mutually exclusive, that makes them quite to the contrary.

Mr NARDELLA—No, it makes them mutually exclusive.

The CHAIR—All right. Terminology. What water have you got? Do you have bore water?

Mr SHARKEY—We use groundwater exclusively for that. It is a commercial bore and it is monitored. We also have a small olive grove which also has a commercial bore. I think we have something like eight other stock and domestic bores which are windmill driven. I would certainly support more piggeries, more feedlots, but we do seem to be restricted by some basic—

The CHAIR—When you are cereal cropping, what do you do? What, do you have stock two years or how do you run your paddocks? How do you manage them?

Mr SHARKEY—We are direct drilling now so a big percentage of those paddocks would be continually cropped. Some of the others, for one reason or another, might be cropped for three years and then we would have a rotation of pasture for two, three years and then back into cropping again. Sheep in particular are a very important component of our operation at the moment because we have not been able to achieve much production in the grain side for the last 10 years. Certainly sheep have been very good to us.

The CHAIR—Are sheep more sustainable than beef cattle?

Mr SHARKEY—It is only recently we have sold the few cattle that we had left and that was really because of the dry conditions.

The CHAIR—Too much water or not enough grazing?

Mr SHARKEY—Too difficult to maintain them, yes. You can manage sheep a lot better.

The CHAIR—Thank you very much for your presentation, Eric, and in due course you will get a copy of Hansard for your perusal.

Mr SHARKEY—Thank you.

Witness withdrew.

The CHAIR—We will adjourn the committee for lunch now.

Committee adjourned.