CORRECTED VERSION

RURAL AND REGIONAL COMMITTEE

Inquiry into the capacity of the farming sector to attract and retain young farmers and respond to an ageing workforce

Timboon — 18 October 2011

Members

Mr D. Drum Mr I. Trezise Mr G. Howard Mr P. Weller Mr A. Katos

Chair: Mr P. Weller Deputy Chair: Mr G. Howard

Staff

Executive Officer: Ms L. Topic Research Officer: Mr P. O’Brien

Witness

Mr I. Gibb, director, sustainable development, Shire of Corangamite.

Necessary corrections to be notified to executive officer of committee

18 October 2011 Rural and Regional Committee 13 The CHAIR — Welcome, Ian, to this public hearing in the Rural and Regional Committee’s inquiry into the capacity of the farming sector to attract and retain young farmers and respond to an ageing workforce. I hereby advise that all evidence taken at the hearing is protected by parliamentary privilege as provided under relevant Australian law. I also advise that any comments made outside the hearing may not be afforded such privilege. For the benefit of Hansard, could you please state your name and address?

Mr GIBB — My name is Ian William Gibb. My address is 75A Manifold Street, Camperdown, and I am the director of sustainable development with Corangamite shire.

The CHAIR — With your presentation, would you like questions as we go or at the end?

Mr GIBB — As we go is fine.

The CHAIR — Good. Over to you.

Mr GIBB — Good morning. Thank you for making time to receive this submission. Just briefly perhaps I will outline a little bit about Corangamite shire — just where you are. Corangamite shire is a north–south kind of shire, so in the south you have and Skipton up in the north. It has a population of around 17 000. I guess one of the important features to understand is that it has a dispersed settlement pattern, so there are kind of 12 key township settlements. In terms of agriculture, traditionally to the north of Camperdown there has probably been a focus on grazing and cropping and increasingly cropping has tended more to the south. To the south of Camperdown in this area, dairy is the predominant form of agriculture.

In terms of the things that I have handed to you, the letter document is a submission that was made into the inquiry into agriculture and training, which I understand is not this committee, but I am just providing that to you by way of background because there are probably some issues that we touch on in that submission that are also relevant to this inquiry. The second thing was just a copy of my presentation, which I will work through today.

Firstly, it is important to understand that agriculture is Corangamite’s dominant industry. The total output estimate is in excess of $2 million. Agriculture and manufacturing contribute to about 43.8 per cent of total output. The majority of Corangamite’s manufacturing is the result of dairy manufacturing and processing facilities. One of the challenges that this council perceives is the opportunity to increasingly value-add product locally, so while we might produce a lot of milk, and that is certainly the case, there is a clear opportunity to perhaps do more about value-adding that product locally.

Corangamite shire is the largest milk producer within ’s most significant milk-producing region. The strength of the dairy sector underpins the Corangamite economy and supports other industries in the shire such as agricultural services, transport and logistics, and manufacturing. From the 2006 census it was evident that almost 2500 people, or 32 per cent of our workforce, were directly related to agriculture. Industry sectors in transport and manufacturing account for a further 900 jobs, or 12 per cent of the workforce, so it is a fairly significant component of the local economy.

In addition to dairy we also have other agricultural businesses, and I have mentioned we are seeking to try to promote local value-adding through manufacture, boutique production and so forth. An example of that would be that Aussie Farmers Direct has recently relocated to Camperdown. It sources milk locally and processes milk that is distributed directly to customers in Sydney, and Geelong and shortly will also be distributing milk to Brisbane. They have created 30 jobs and plan to increase their employment to about 100 over the next five years and there are a range of roles. That is a very good example of a processing facility that has recently established in the shire. We certainly want to see some more of that.

In terms of key issues, I might just talk a little bit to the issues that we raised in our submission to the other committee. The first is in relation to population attraction and retention. In Corangamite there is very limited population growth. In fact in the northern towns and indeed communities generally there is a decline in population with the exception of Skipton, which is fairly close to Ballarat so it has had some slight growth. In the south there is limited population growth. It is fairly static. We have an ageing population, which is quite a common thing, but that does provide challenges in terms of future employment and the skills base. We think there is an opportunity to really try to work on some population-attraction strategies, and the council is certainly keen to do that. We are looking primarily at two things — trying to attract population from other regional and

18 October 2011 Rural and Regional Committee 14 metropolitan locations and also looking carefully at opportunities for migration in terms of both opportunities through skilled migration and also unskilled migration. So we are doing some work in that space at the moment.

Mr TREZISE — What type of work are you talking about, Ian?

Mr GIBB — Basically in the underskilled area there is a need for more labouring work. In the skilled area there is a need for additional skilled people in relation to manufacture, in relation to professional people and so forth. There is a very low unemployment rate and there are skills shortages.

Mr TREZISE — So what initiatives is the shire taking to attract those people?

Mr GIBB — We have done some work looking at a population-attraction strategy, which we are doing some work on now, and there are two components to that. One is around branding and generally a kind of marketing campaign, and the other is around looking at opportunities around migration.

The CHAIR — Migration from anywhere?

Mr GIBB — Both skilled migration and looking at the opportunity for unskilled migrant labour as well. There probably are opportunities there.

Just going back to my submission, I think one of the key issues is around workforce planning in terms of the need to make sure that we have a skilled workforce and also an appropriate labour supply to promote agriculture into the future. As you know, farms are larger, there are now smaller workforces due to technological changes, and there is a need to look at opportunities in towns and communities for new forms of employment and so forth.

The second point I want to talk about is education and training. I think it is clear that increasingly farmers require higher levels of education and training than they have in the past, and the cost of training and the cost of time away from farms are key issues. This is quite a difficult area in which to promote training. In the south-west I guess we are lucky that there are some very good training providers. There is South West TAFE, which has the Glenormiston campus, and also Deakin University. One of the things we have been trying to do is work with those organisations to encourage partnerships and to look at opportunities around training and education. Further issues around training relate to wages, so agricultural wages are generally lower than the incomes of people in the mining industry; for example, unskilled labourers in the mining industry. There is a need to look at income support and wage issues.

The majority of farmers, about 70 per cent, now employ people other than the family on the farm. In our experience there is a need for provision of assistance in relation to industrial relations, occupational health and safety, wages and so forth, so some basic kind of training. As I said, we are trying to build local training product, and we have been having some discussions with South West TAFE, indeed with the DemoDAIRY project just outside Camperdown and Deakin University in that regard. One of the other things that we are interested in — —

Mr TREZISE — Ian, just on that point, in relation to employing people, do government departments, for example, actively assist farmers such as in health and safety? Does WorkSafe — —

Mr GIBB — Yes, yes. I am sure they do, but it is kind of about building knowledge around some of those things that farmers need to know in terms of improving farm management and systems on farms to cover off on those areas.

Mr TREZISE — I would like to think departments such as WorkSafe, and I am only using this as an example in the employment area in health and safety, would be in the area proactively assisting farmers in recognising issues.

Mr GIBB — And DPI as well. Yes, but my understanding is that there is a need for some more structured training around some of those things to cover off those things. One of the other things that we are interested in that I have raised in the other submission is that we have looked at a couple of models overseas. There was one in Vermont in the States, which is a sort of useful case study, where they have built a whole institute around cheese — the manufacture and packaging of cheese; it is a whole training facility which is associated with the university. 18 October 2011 Rural and Regional Committee 15 That has had really great spin-offs in terms of people setting up microbusinesses as a result of that training and then also establishing infrastructure that is shared — so opportunities, for example, where facilities that are used to mature cheese or to cut and wrap cheese are shared by all of the producers. We think there is some prospect to look at opportunities like that — local vocational education and training that can add value to product and build microbusinesses. That seems to perhaps be a model that could apply here in the south-west given that it also has a kind of tourism market at its doorstep. That is an example of a different model, but it is an interesting one in terms of the local economic benefit that can arise from joining training and very small businesses — but nonetheless businesses that have some capacity to grow — together and making sure that there is a good fit between those things.

It is also perhaps questionable whether the benefits of agricultural careers are properly promoted. There are benefits, for example, in dairy in terms of advantages of flexible working hours, opportunities to build assets and so forth. It has been our experience a little that perhaps more work needs to be done around the promotion of careers in dairy in particular.

The CHAIR — Who should do that work?

Mr GIBB — I think that can be done locally. I think it can be done by South West TAFE — by educational institutions. I think there is an opportunity to do that better than perhaps it is done. I think we can probably do some of that.

I think there is also a need to address questions around how people enter agriculture and how they build assets and equity. That seems to be a sort of stumbling block in that it is difficult for young people to move into agriculture, to achieve ownership and to achieve equity. There might be some work that could be done around alternate business models, alternate financial packages and the sorts of things that might actually help that transition. I think it is clear, for example, that in relation to sharefarming there are some products which are targeted towards assisting in sharefarming but that there are gaps around, for example, the purchase of stock. Just in the little bit of work we have done it is clear that there is a need to review some of those models in terms of how people build equity, how they build assets and what the pathway is to move through that so that people can really achieve ownership and equity over time and so that sharefarming models and so forth are reviewed to make sure that they are appropriate in the current financial context.

The CHAIR — So you said about stock — —

Mr GIBB — As I understand it, it is sometimes difficult for people to borrow in order to buy stock or finance stock acquisition, particularly if they have no land assets. I do not know. It is not my field of expertise, but I am suggesting that from what we hear there might a need to look at some different business models that perhaps facilitate greater opportunities for equity and ownership.

The CHAIR — In financing stock?

Mr GIBB — Yes. I think that increasingly there is probably also a need to review how, for example, sharefarmers move into ownership as well. Traditionally I think what you did was save up enough money so you could then have a deposit and buy some land and so forth. Whether that model is still appropriate now might need some review as well. I think it is quite important, because what we have seen is that as the farming community ages and people do not take up the family farm — in some cases they will, and in some cases they will not — we need to look at models that make it attractive for young people so that we can introduce people who do not have a background in agriculture in particular into agriculture and be confident that they can progress and are not just stuck labouring and that there are opportunities in terms of business models that are appropriate to that. I think there is quite a challenge there.

We also need to make sure that there are good career pathways and good pathways in industries allied to agriculture. For example, in Corangamite there is a lower rate of year 12 completion than in other areas of regional . There are also lower participation rates in terms of the TAFE system or university, so there are gaps around education in this region in comparison to other regions. That suggests to me that there is perhaps a need to look at opportunities to increase training and make sure that we have good pathways for young people.

18 October 2011 Rural and Regional Committee 16 We also want to make sure that there is increased investment in demonstration and research facilities. The DemoDAIRY facility, for example, outside Camperdown might be a model for further investment, and there might be opportunities to look at expanding its role as a demonstration facility and also its role in relation to training.

The other area I think is critical in terms of training is to try to make sure, as I said before, that there are greater linkages between local education provision and increased value-adding and boutique production so that there are opportunities to make sure that there is more targeted training and that we train people to add value to the product. Those are the kind of opportunities we want to focus on.

Mr HOWARD — You have been pretty thorough. In working through the issues, obviously a number of them are not new to us, but there are new things to think about in the way you presented them. I do not have any further questions.

The CHAIR — Any concluding remarks?

Mr GIBB — Perhaps what I will say is that I think the council has certainly been keen to start to plan this space a bit more. We have just done a new economic strategy and are certainly doing some work on population attraction. I guess what is certainly evident to us is that partnerships are really critical, both with state government and with other organisations. I think there are opportunities here in the south-west to try to build those partnerships to deliver outcomes, so I guess that will be the other kind of theme, and increasingly that will be required.

The CHAIR — Thanks very much for the time you have taken to make the submission and the time you have taken here today to give a presentation. In approximately 14 days you will have a draft copy of what you have said from Hansard. You will be able to correct obvious errors, but other than that it will be as it is. Thank you very much.

Mr GIBB — Thanks. Thanks for the opportunity.

Witness withdrew.

18 October 2011 Rural and Regional Committee 17