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FUTURE FARMING Productive, Competitive and Sustainable

Contents

Future Farming highlights

A new era in farming

Action 1: Boosting productivity through technology and changes in farming practices

Action 2: Building skills and attracting young people to farming

Action 3: Understanding and managing climate change

Action 4: Strengthening land and water management

Action 5: Helping farming families to secure their futures

Action 6: Developing new products and securing new markets

Action 7: Transporting products to market

Future Farming highlights

The $205 million Future Farming strategy takes action across seven broad Action Areas to enable farm businesses in Victoria to become even more productive, competitive and sustainable as they enter an era of unprecedented change.

• Boosting productivity through new technology and changes in farming practices
  
  Major new investment of $103.5 million to expand agricultural research, development and practice change services in Victoria, including the development of new generations of drought, cold and salt resistant crops, improved plant and animal disease control, and new technologies to lift productivity.
  
  
• Building skills and attracting young people to farming
  
  A number of strategies are being implemented to build skills for the farm sector and attract young people to farming. These measures will boost regional education and training opportunities related to farming and its support industries, including new trade wings at secondary colleges for trades that are in short supply in primary industries. Decisions on State and Federal funding for these projects will be made in the 2008-09 Budget and later in the year.
  
  
• Understanding and managing climate change
  
  New support of $11.5 million to help farm businesses to plan for climate change and to provide farmers in key industries with new technologies and strategies to adapt their farming systems to future climate conditions.
  
  
• Strengthening land and water management
  
  Additional investment of $24 million for managing weeds and pests, as well as new actions to assist farm businesses to strengthen land and water management.
  
  
• Helping farm families to secure their futures
  
  A $12 million boost for services to support farmers and rural communities in securing their future and adjusting to change, including a new National Centre for Farmer Health to improve the health and wellbeing of farmers, farm workers and their families.
  
  
• Developing new products and securing new markets
  
  An $11 million package of initiatives to help farm businesses capture new domestic and international market opportunities. This includes enhancing Victoria's biosecurity preparedness and identifying new investment opportunities and alliances.
  
  
• Transporting products to market
  
  A $43 million investment in country rail freight lines serving the grains industry to ensure the rail system can continue to deliver future crops to market. Other major investments are the deepening of the Port Phillip Bay channel and the development of a new wholesale market at Epping.

A new era in farming

Farming is entering a new era.

Our farmers are facing unprecedented pressures and uncertainties. At the same time, exciting new opportunities are emerging. These changes will be far-reaching and will have a profound and lasting impact on the business of farming in Victoria in the coming decades.

Victoria's farm businesses and communities have a proud history of resilience and adaptation to change; building their prosperity through cycles of plenty and adversity. That resilience and flexibility will be critical to meeting the challenges that lie ahead.

Victoria's farm sector, which includes plantation forestry and aquaculture, is well placed to reap large rewards from the rapidly growing markets of Asia. New opportunities are also emerging from innovations in science and technology, emerging water and carbon markets, more productive crop varieties and the growing demand for ‘clean and green' food.

But our farm businesses also face significant risks. The sector is under pressure from drought, water scarcity, labour shortages and increasing competition from overseas markets. It must also manage the long-term impact of climate change, growing urbanisation and new patterns of land use, threats from the introduction and spread of exotic weeds and pests, and changing community and consumer expectations.

To take advantage of new opportunities and successfully manage current and future risks, our farm businesses must further boost their productivity, become more innovative and sustainable, and gain access to highly competitive domestic and international markets.

The Victorian Government has played a significant role in supporting regional communities and industries. We have invested heavily in the infrastructure on which farming families rely, such as irrigation, roads, rail freight and ports. We have also provided substantial support for the development of farming and primary industries in Victoria.

We must now re-focus and strengthen our services and policies to ensure that Victoria's farm businesses and rural communities succeed and grow in this challenging – but potentially highly rewarding – new era for agriculture.

A future of pressures and opportunities

While farm businesses in Victoria are dealing with significant change, they also face a period of new market opportunities.

The appetite of China and India for milk and meat is growing rapidly and the growing use of biofuels in Europe and North America is creating a new demand for grain. The Victorian farm sector's access to global markets will also benefit from any progress in international trade negotiations, which has been slow in recent years.

The continued flow of finance to family farms is reflecting strong growth in the value of land and water assets. In addition, superannuation funds are also investing in rural land, introducing new capital to rural economies and combining their financial resources and risk management skills with the expertise of the farm sector.

But these developments must be tempered by recognition of significant future risks, including fluctuating commodity prices and exchange rates.

While demand for farm products is growing, competition is also intensifying. Globally, agriculture is expanding in South America and Asia in response to strong demand, and the cost of fuel, fertiliser and finance may stay high. Locally, strong competition for land and water may also keep prices high.

Victoria has experienced a prolonged drought throughout much of this decade. Whether this is an extension of 20th century wet-dry cycles, or the first signs of human-induced climate change, or a combination of both, our climate history is no longer a reliable guide to the future.

Climate change is ushering in carbon markets, which will introduce new rewards and risks. Access to new markets will also be affected by our biosecurity safeguards and by community demands for a greater emphasis on sustainability, animal welfare and higher food quality.

Some of these pressures are not new

While some of our major competitors have been protected through tariffs and quotas, Victoria's farm sector has been progressively exposed to local and global markets over many decades.

The sector's management of 60 per cent of the State's land and two thirds of its allocated water has been under growing pressure for decades from competition and community demands for environmental sustainability.

In response to these pressures, Victoria's farmers have achieved an impressive growth in productivity, while adopting better and more sustainable use of resources, improving animal welfare and meeting demands for improved product quality and safety.

Today, our best farm businesses are skilled, sophisticated, productive and profitable enterprises that use advanced technologies and quickly adopt the latest research findings and discoveries. Agricultural production for dairy, cereal, meat and wool products has doubled since the mid-1940s and Victoria now produces around one quarter of Australia's food and fibre exports from just three per cent of the nation's agricultural land.

This significant achievement reflects the willingness of Victorian farmers to explore new ideas and adopt new practices in order to manage change – qualities that will serve the sector well in meeting future challenges.

Victoria's farm sector

While the nature of farming has changed dramatically in recent decades, the sector continues to make a major contribution to economic growth and employment in Victoria.

• farm businesses in Victoria produce around 26 per cent of Australia's food and fibre exports from just three per cent of Australia's arable land
• in 2005-06, the value of products from Victoria's agriculture, forestry and fishing sector was estimated to be more than $9.3 billion
• the number of farms has halved from almost 70,000 in 1963-64 to around 32,000 in 2004-05
• the average farm size has grown from 210 hectares to over 430 hectares
• over 67,000 people are employed directly in agricultural industries – a further 84,000 people are employed in related processing and service industries
• farmers manage more than 60 per cent of land in Victoria and account for over 65 per cent of the State's water use
• between 1999-2000 and 2004-05, the dairy industry was by far Victoria's most significant agricultural industry – producing 64 per cent of Australia's milk production and accounting for 85 per cent of Australian dairy exports. Other significant industries include grain and vegetable growing, grain-sheep and grain-beef cattle farming
• around 13 per cent of Victoria's greenhouse gas emissions are generated by the agriculture sector
• Victoria has the largest area of plantation forestry, narrowly ahead of Western Australia. In 2006, there were 396,000 hectares of plantation forests in Victoria, or 21.7 per cent of the 1.8 million hectares in Australia.

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Note: Values are expressed in 2006 dollars.

Source: ABARE Farm Surveys, ABS Agriculture Census and Surveys, ABS Labourforce Survey

Farming in the future

Productivity, competitiveness and sustainability are at the heart of a prosperous farm sector in Victoria. To drive prosperity into the future, the sector will need access to the latest developments in agricultural research.

It will also be vital to rapidly adopt new and more complex production technologies and practices to raise the quality and value of products leaving the farm gate – and to have the flexibility to diversify into new areas and develop new businesses options and partnerships.

Successful, competitive farm businesses of the future will also be larger in scale and scope. They will use more off-farm capital, specialised technical and financial advice, and non-family labour. They will plan strategically, and trade more actively in land, water, capital and their products to respond flexibly to fluctuating prices and climatic conditions.

They will significantly improve their stewardship of land, native vegetation, water and animals.

The growing complexity of farming will also drive a more corporate approach, involving further separation of ownership, management and labour across the sector. In addition, successful farm businesses will use a wide range of risk management tools to manage cycles of weather and prices.

New farm products will create opportunities for investment and employment along the value chain from the farm gate to the consumer. As Victoria's farm sector becomes more diverse, dynamic and rewarding, new careers will evolve – attracting higher numbers of young people to farming and related industries.

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The challenge of change

The changes taking place in farming have particular implications for small to medium family farm businesses. While some may be supported by off-farm wages, others may need to expand, restructure their operations or change long-standing practices.

With proper support and access to accurate information, farm businesses can resolve these difficult issues and make decisions that will result in positive outcomes for themselves and for the wider regional economy in Victoria.

The more amenable and accessible parts of Victoria have also attracted ‘tree change' migration – the growth of small, lifestyle-oriented farm businesses. These farms are not always managed primarily for profit and often rely on off-farm income and capital growth. This trend is likely to continue for the foreseeable future.

These changes in the business of farming are also contributing to the transformation of rural communities and regional towns. In particular, Victoria's growing regional centres will continue their recent strong growth, generating a broad range of employment, business, social and recreational opportunities.

The new era in farming is being driven by economic, climate and market forces largely outside our control. Attempting to slow down or hold back the rate of change will generate pressure for even more rapid and painful adjustment later.

Different farm businesses will respond to change differently in the years ahead. The role of the Victorian Government is to enable those businesses to adjust quickly and sustainably to change, and to provide the tools and services that farming businesses and communities need to grow and prosper into the future.

New services and policies for farming

The Victorian Government is re-shaping and strengthening its services and policies to enable farm businesses, families and communities to gain the most advantage from new opportunities in challenging and unpredictable times.

In many cases, we will increase our contribution. For example, we will significantly enhance our strategic research and development services to raise productivity and sustainability through innovation. We will also increase our services to farm businesses and rural communities in relation to climate change and carbon markets, and boost health services for farmers.

As the farm sector evolves, Government services must also evolve. We will deliver services that are better tailored and targeted to meet the needs of farm businesses and match industry needs.

In some cases, we will achieve more by doing less – for example, by reducing impediments to markets for land and water, by re-shaping services that are provided by the private sector or that undermine the farm sector's preparedness for climate change.

In other cases, the size of our role will depend on the priorities and co-investments of the farm sector. In particular, this applies to the productivity-focused projects in our applied research and development work.

The Future Farming strategy has been built around seven key Action Areas to provide farmers with the tools they need to build productivity and sustainability, while better managing risk. The strategy sets out new investment and actions that will help farm businesses across Victoria to:

• drive new on-farm technology and practice change
• build skills and attract young people to farming
• understand and manage risks in a changing climate
• strengthen land and water management
• help farm families to secure their future
• capture domestic and international market opportunities
• transport products to market.

The Future Farming strategy reflects the Victorian Government's ongoing commitment to a productive, competitive and sustainable farm sector. The strategy will provide strong, refocused and expert support to Victoria's farm businesses as they confront a future of rapid change, new possibilities, increasing pressures and tough challenges.

Complementary national reforms are needed

To support the initiatives in the Future Farming strategy, the Victorian Government will also pursue and support national reforms.

We will seek a comparable shift in Commonwealth resources towards ongoing support for productivity that has strong industry involvement.

We will provide leadership to develop a national strategy for research, development, technology transfer and practice change through the Primary Industries Ministerial Council.

We will contribute actively to the Commonwealth Government's development of a national Emissions Trading Scheme (ETS) and, in particular, its consideration of when and how agricultural emissions may be included.

Victoria supports the Primary Industries Ministerial Council review of drought relief and farm support. We agree that Governments should direct more resources to growing the farm sector's capacity to adapt and prosper under climate change – as the Future Farming strategy aims to do.

It is also important that the Commonwealth Government places a higher priority on farm family welfare through support that addresses specific family needs and provides families with time and resources to adequately manage their circumstances.

Rural Skills Project opening eyes and doors

Case Study

Seventeen-year-old Josh Ailey loves his work as a trainee on the K&K Heffernan dairy farm near Terang, where he combines his interest in computers with an enthusiasm for working in the south west Victorian dairy industry.

Josh secured his traineeship after participating in the innovative Rural Skills Project, which helps young people develop job-seeking skills and explores the great range of exciting job opportunities in rural areas.

Josh, who attended Terang College and lives with his grandparents in Noorat, thought that his future would be in computers, and had imagined he would need to head to a big city to find work.

But through the Rural Skills Project Josh learned a great deal about the local dairy industry, including the fact that the industry needs skilled computer technicians.

Josh said at the K&K Heffernan dairy farm, computer-based systems monitor the 400-strong milking herd using ‘smart' ear-tags.

"It's more than just milking cows," Josh said. "There are more jobs in the dairy industry than I thought."

"Before I started, I wanted to be a computer technician and if that failed I was going to go into the dairy industry.

"But now I've learnt that in the dairy industry they need computer technicians, so I can combine the two.

"If I start to really get into the dairy part, I'll stay here in the region and perhaps do share-farming or farming on my own."

The Rural Skills Project aims to overcome labour skills shortages in rural Victoria while helping young people increase their employment prospects.

Based on a partnership between the South West and Wyn Bay Local Learning and Employment Networks, in conjunction with the State Government's Connectus program, the project comprises a four-week learning program for up to 20 participants.

Toni Hancock, Executive Officer of the South West Local Learning and Employment Network, said the Rural Skills Project was like a leadership school that provided valuable support for continuing education as well as training and ideas about rural job opportunities.

"The aim is to get the participants to re-engage with studies and education, and then gain a rural industry traineeship or job," Toni said.

"We're very keen to do the program again and increase the involvement of the dairy industry to take this up as a model for supporting young people to enter the industry."

Competitive Victoria

Successive cuts to taxation levels, as well as the abolition of numerous State taxes, have benefited Victoria's businesses, including farmers. Since 1999, the Government has:

• slashed the top rate of land tax from five per cent to 2.5 per cent
• almost tripled the tax free threshold to the current level of $225,000 compared to $85,000 in 1999
• cut payroll tax from 5.75 per cent to the current rate of 5.05 per cent – to be reduced further to five per cent from July 2008, making Victorian the second lowest state in Australia for payroll tax
• reduced WorkCover premiums by 10 per cent each year for the past four years, bringing premiums to their lowest in Victorian history. This has saved Victorian businesses around $1.7 billion to 30 June 2008
• abolished stamp duty on mortgages reducing costs for farmers, regional home purchasers and other mortgagees. A farmer, purchasing a property worth $485,000, with an average mortgage, would save over $1,600
• abolished all taxes as required under the Commonwealth/State agreement.

*Figures are as at the 2007-08 State Budget

Managing risk with a passion for agriculture

Case Study

Research and development, risk management and a passion for agriculture are driving Birchip farmer Chris Lee's operations in western Victoria.

Chris and his brother manage two holdings which make up the 4,800-hectare family farm, Lochlee, in Birchip, and share heavy machinery as a way of managing risk associated with expensive and specialised broad acre farming equipment.

The Lees work another 4,800-hectare property in Kaniva, near the border with South Australia. This property, Wandari, is run by a partnership and Chris is using soil improvement techniques to convert grazing land into cropping land.

By digging down into sub-soil clay, and bringing that clay to the sandy surface, Chris is turning non-wetting sandy soils, previously suited only to grazing, into more productive land capable of supporting cropping.

It is an innovative approach that has attracted the attention of Victoria's Department of Primary Industries and the South Australian Research and Development Institute, which are involved in soil improvement trials at Wandari.

Chris has also invested in water bore machinery to improve water security at Wandari. This improved access to water allows the Wandari partnership to sub-let parts of the property to specialist growers, such as seed potato producers from Mt Gambier.

"I have a real passion for agriculture and even in these tough times we are surviving, which is a measure of success," Chris said.

"Modern farming is about managing risk, and you have to do something about it, so a lot of what we're doing is about spreading the risk and trying to control the bottom line.

"As a farming operation our measure is improving water-use efficiency in growing grain crops and we aim to grow at least 17 kilograms per hectare per millimetre of effective growing season rainfall.

"To achieve this we have to use the best grain-growing innovations provided by science and research developments, including new varieties, weed control, managed nutrition, yield profit forecasting, and so on.

"Research and development is the real key to productivity improvement and then it is up to us as farmers to implement new ideas and new techniques that improve efficient production.

"Agriculture has a very bright future but it's imperative that the industry attracts the best minds and enough of them to grasp future opportunities."

Action 1: Boosting productivity through technology and changes in farming practices

In the years ahead, Victoria’s farm businesses will drive higher productivity by adapting to change and taking up new opportunities to use innovative technologies and new farming practices.

New technologies and practices are central to the future growth and development of Victoria’s farm sector. Recent developments in computer technology, irrigation technology, production technology, remote sensing, biotechnology, energy systems and digital communications have the potential to drive the productivity and sustainability of farming businesses to new levels.

Victoria’s farm businesses have an impressive history of innovation and sustainable productivity growth. Between 1969 and 2006, Victoria’s agricultural productivity growth averaged 2.1 per cent per year – higher than competitors such as France (two per cent), Brazil (two per cent), New Zealand (0.4 per cent) and Argentina (-2.7 per cent), but lagging behind emerging competitors such as China (six per cent) and established competitors such as Canada (3.3 per cent).

In the past, farmers have lifted their productivity by adopting new technologies to reduce costs, introducing higher-yielding animal and plant varieties, and increasing the size of their farms.

In the future, intensifying competition for world markets and resources means that farm businesses will need to increase performance, adopt new technologies and be open to new practices.

In farming, individual businesses rarely have the capacity to undertake their own research. Most adopt results from applied research and extension activities undertaken by State and Territory agricultural agencies and universities. Strengthening and refocusing the work of these agencies is critically important to the future of Victoria’s farm sector. In addition, new and improved services to farm businesses will be needed to ensure that this work translates into a more productive, competitive and sustainable farm sector.

Sharpening our focus on research, development and practice change

Victoria has a strong record of achievement in agricultural research and development.

Through major initiatives such as the Science, Technology and Innovation Initiative (STI Initiative) and Our Rural Landscape (ORL), significant capabilities in plant and animal genetics and genomics, landscape modelling and practice change research have been developed. This has led to major discoveries and new knowledge and established Victoria as a leader in pasture, crop and dairy biotechnology fields.

Victoria’s plant biotechnology capability has led to the discovery of genes for cold and drought tolerance that are being used to develop new breeds of pastures and crops, such as drought tolerant wheat. Our animal biotechnology capability has discovered gene markers for selecting dairy cattle that produce better milk and for selecting elite strains of Murray Cod for improved aquaculture production.

Victoria’s capabilities in landscape modelling have led to a better understanding of how changes in one part of a farm or catchment area impact on other parts. This has enabled the Department of Primary Industries (DPI) to establish new and improved approaches to regional planning in partnership with local governments and Catchment Management Authorities (CMAs).

Victoria’s leadership in practice change research has led to a better understanding of the decision-making processes used by farmers and industry, helping Government to provide farmers with the information they need to plan for the future.

For the farm sector to stay ahead of its competitors and capture future markets and opportunities, Victoria must retain and expand these strategic scientific capabilities – and ensure that they translate into changes in farming practice.

The Australian Government provides a framework for the farm sector to collectively invest in research, development and practice change through Research and Development Corporations. The Victorian Government, working with other governments, then co-invests with industry in new technologies and practices.

At a national level, Victoria will continue to lead the development of a more coordinated and collaborative approach to investment in research, development and practice change.

At a State level, Victoria will continue to build expertise by:

• developing farming systems that are more productive, use water and nutrients more efficiently and produce fewer greenhouse gases
• breeding plant varieties and animals that produce higher yields and more valuable products with greater tolerance of climatic variation
• developing and adopting technology that helps to rapidly detect, prevent and control pests and diseases.
• These capabilities will strengthen research efforts in industries that are strategically important to Victoria, such as dairy, grains, horticulture and lamb.

A new generation of farm services

The new era in farming requires a new generation of services for farm businesses.

As farmers respond to changes over the next decade, services provided by Government to the farm sector must also change. Services must become more accessible, make use of new technology and be tailored to specific needs of farm businesses or particular industries.

The Victorian Government will improve the range and quality of its services to provide farm businesses with information, technology and support. These new services will help farm businesses boost productivity, become more competitive and improve environmental sustainability. In particular, services provided by DPI will help farmers:

• understand the opportunities and challenges of climate change
• improve productivity while managing natural resources and labour shortages
• use water efficiently
• secure market opportunities created by consumer diversity.

Victoria’s strategic scientific capabilities now form a strong platform for future service delivery. Retaining and refocusing these capabilities will require DPI to attract skilled people to centres to create a ‘critical mass’ of expertise. This will allow DPI to continue productivity research and technology support.

By combining new farm sector services with a renewed commitment to research, development and practice change, the Government aims to drive on-farm innovation that will place Victoria at the forefront of national and international agricultural performance.

Taking action

1.1 Major new investment in research, development and practice change

The research, development and practice change efforts of DPI provide a strong foundation for the future of farming in Victoria. The Victorian Government will provide a significant, on-going increase in DPI’s funding base – worth $77 million over four years then $23.2 million per year. The funding will build on existing strategic capabilities and strengthen Victoria’s focus on key research and development areas.

Funding will be used to:

• develop new generations of wheat, barley and horticultural crops resistant to drought, cold and salt
• increase productivity and reduce animal disease and environmental impacts in the dairy and lamb industries through better management systems
• improve plant and animal disease control through development of better diagnostic tests and modern epidemiological tools
• improve resource allocation and planning by farmers and governments through more effective landscape modelling tools
• produce novel feedstock genetics for next generation biofuels from non-grain sources
• develop new practice change methods to help farmers choose and adopt technological and business solutions that meet current and future needs.

1.2 State-of-the-art services to farm businesses

The Victorian Government recognises that services to the farm sector must keep pace with change. Following an independent review, the Government will invest $8 million over four years to modernise its service delivery to farmers. This important investment will be delivered through a new division within DPI called Farm Services Victoria.

Farm Services Victoria will include the new service delivery responsibilities given to DPI for weeds and pest management and the existing staff and programs of DPI’s Catchment and Agriculture Services.

This investment will allow Farm Services Victoria in DPI to:

• deliver services tailored to meet the needs of farming families and small and large farm businesses
• piloting a range of service options (including web content, online support tools, improved case management and mobile computing) to farm businesses
• build on the latest research on the take-up of appropriate technologies by farm businesses
• increase the ability of DPI field staff to provide advice based on a ‘whole of farm’ perspective.

1.3 Changing irrigation practices

The Victorian Government recognises that improving practices in irrigated agriculture is critical to the long-term competitiveness and security of farm businesses. The Government is delivering the $2 billion Food Bowl Modernisation Project in northern Victoria, which will focus on improving productivity and water-use efficiency. New funding of $2.3 million over two years will be made available to support farmers in this area. This funding will help farmers make decisions to capture the benefits of irrigation infrastructure modernisation by making on-farm changes to their businesses and infrastructure.

1.4 Precision farming through GPS technology

Precision farming using global positioning systems (GPS) technology improves yield and it also reduces inputs such as water, fertiliser, pesticides and energy. Currently, the needs of Victorian farming businesses for high accuracy GPS services are not being met. The Government will invest $1.47 million over three years to provide and market a high accuracy GPS capacity that will allow precision farming across Victoria, leading to more sustainable farming, higher productivity and improved water use. This funding will help establish $3.4 million of related infrastructure through the Regional Infrastructure Development Fund (RIDF).

1.5 High productivity in the dairy industry

A successful dairy industry is vitally important to Victoria’s future. Around two-thirds of Australia’s 8,800 dairy farm businesses are located in Victoria, where the industry employs more than 70,000 people and is the largest exporter from the Port of Melbourne. The Victorian Government will provide an additional $8.57 million over four years to ensure that dairy farmers have the information and technology they need to boost annual industry productivity growth to the three per cent necessary to maintain international competitiveness. DPI will continue to support the dairy industry with new research and development into the application of new techniques in future farming systems, water-use efficiency and agronomic management.

1.6 Stakeholder engagement, implementation and evaluation

The Victorian Government will invest $2.71 million over five years to implement, monitor, evaluate and further develop initiatives outlined in this strategy. The Government will also establish a Future Farming Stakeholder Reference Group.

“Agriculture has a very bright future but it’s imperative that the industry attracts the best minds and enough of them to grasp future opportunities. ” - Birchip farmer Chris Lee

What we’re already doing

The Future Farming strategy builds on actions already being taken by the Victorian Government:

• investing $1.8 billion in new innovation projects since 1999 – including $620 million through two generations of the Science, Technology and Innovation Initiative (STI Initiative)
• the $50 million Our Rural Landscape component of STI is strengthening DPI’s capability in genetic technology development, visualisation, modelling support and remote sensing
• investing $58 million per year in ongoing DPI programs; conducting strategic, applied and adaptive research into new technologies and translating new knowledge into innovative management systems
• providing $180 million for the new Biosciences Research Centre at Latrobe University – a state-of-the-art facility for agricultural research, rapid plant and animal biosecurity diagnostics and agricultural product development
• maintaining involvement in nine cooperative research centres (CRCs) and a range of non-CRC collaborative research arrangements, along with 27 memoranda of understanding with international organisations.

Australian canola grows from strength to strength

Case Study

During the 1990s, the Australian canola industry grew spectacularly, with annual production rates of up to 2.36 million tonnes, and annual exports worth more than $700 million per year.

And while years of drought have slowed production, Australia’s thriving canola industry owes much success to scientists from Victoria’s Department of Primary Industries.

The department established the first canola research and breeding program in 1970 at Werribee, before moving to the current Grains Innovation Park in Horsham in 1982. The program has developed high-yielding varieties resistant to a serious fungal disease called ‘blackleg’.

Since then, the industry has gone from strength to strength and now Australia is the second largest canola exporter in the world after Canada.

Newer forms of herbicide-tolerant canola varieties and specialty oil types could lead to further increases in areas under cultivation as global demand for grains and oils continues to soar.

It is a prospect welcomed by Horsham farmer Peter Velthuis, who sees canola as an integral part of his grain growing and livestock operations.

Peter has 1,200 hectares under cultivation for grain crops, 1,600 hectares for sheep grazing, an 8,000-head sheep feedlot, a share in a 5,000-head cattle feedlot, and also owns HSF P/L, a newly established Stockfeed Milling Company located in the Horsham region.

Canola makes up 30 per cent of Peter’s grain growing operation and, even though costs per hectare are higher than for other grains, the flow-on benefits from crop rotation outweigh the costs.

“We have a four-year rotation - canola, wheat, barley, then legumes, and we always do really well with the wheat crop because the canola improves the soil by helping control pathogens and diseases in the soil,” Peter said.

“We always keep up with the newer varieties being released, and we never keep a variety for more than two years.”

With the end of the moratorium on growing genetically modified (GM) canola in Victoria, Peter is cautiously optimistic about the future for canola farming.

“There’s no doubt that better disease resistance or drought tolerance will make a huge difference for farmers, and we always like to use less chemicals and pesticides,” he said.

“With climate change and other pressures we really need to keep up with the best and latest varieties, no matter whether they are traditionally developed or genetically modified.”

Action 2: Building skills and attracting young people to farming

The future of the farm sector – and of regional Victoria – depends on more young people seeing farming and related industries as attractive and exciting sectors in which they can build rewarding careers.

Engaging young people in primary industries and related activities, such as food production and tourism, is vitally important to the future of farming and to the future of many rural communities.

Young people are more likely to remain in, return or move to rural and regional Victoria if they have access to educational, employment and lifestyle opportunities, and if they believe they are working in an industry that offers good career prospects.

Across Victoria, the number of farmers and their employees directly working on the farm sector has dropped as a result of productivity improvements, including increasing mechanisation. As the traditional image of farming diversifies, farm businesses increasingly rely on more complex and skilled support services. Competitive farm businesses of the future will use specialised technical and financial advice, and more non-family labour. They will plan strategically and rapidly adopt new and more complex production technologies and practices. These developments mean that more job opportunities will exist along the value chain from the farm gate to the consumer.

The Government has invested heavily in regional and rural Victoria and has been successful in attracting families, businesses and investment right across the State. Additional educational opportunities and training services – coupled with a modern, diverse and sustainable farm sector – will attract even more young workers to farming and related industries.

Farming as a dynamic career

For many people, lack of capital has been a barrier to entering farming. However, as new ways of operating and new business models become more commonplace, opportunities for skilled people are opening up across the farm sector.

One example is the increasing use of advice and services from specialist firms. These services include expert advice on new crop varieties or animal genetics, whole farm planning, new technology or new production systems. Off-farm financial and marketing advice is also becoming increasingly common. Much farm machinery also requires specialist servicing.

While the traditional farming family as owner and operator will remain the most common approach for the foreseeable future, changing farm business models will provide new opportunities. Increasingly, professional farm managers will manage other people’s land. Operations that require capital-intensive or specialist machinery, such as harvesting, will be carried out by specialist contractors.

In many cases, these specialist providers will not live on a farm. They will base themselves in local towns and provincial centres, where they can access community and social services.

Farms, like any business competing to attract and retain good staff, will need to continuously improve their capacity to attract, manage and retain employees. They will need to be profitable enough to offer attractive pay and conditions or contract specialist services. They will also need to offer ongoing training and career opportunities.

Expanding agricultural education

Skilled occupations are becoming more and more important to the farm sector as it takes up new technologies, applies scientific research results and explores new ways to manage limited natural resources.

Governments and the private sector have a role in providing education opportunities where there is demand for certain skills. The Victorian Government will take action to make skills training more accessible locally, making it easier for young people to pursue their chosen careers in the regions in which they choose to live and work.

Since 1999, the Victorian Government has directed substantial new investment into improving education and training opportunities in regional Victoria, and boosting skills in key regional industries. Successful initiatives include the Start Your Future Here Skilled Migration Strategy, the Community Regional Industry Skills Program (CRISP) and the Regional Jobs Package. The Government has also increased funding for regional TAFE institutes, including new Technical Education Centres under construction at Wangaratta and Ballarat.

In 2007-08, the State Government committed $50 million to build new tech wings in 30 Government schools – including Euroa Secondary College and Beechworth Secondary College – and modernise equipment in all others. The new Commonwealth Government has gone further by committing $2.5 billion over 10 years to provide funding of between $500,000 and $1.5 million for all secondary schools across Australia to apply for funding to establish Trade Training Centres.

These new trade wings will improve the range of Vocational Education and Training (VET) subjects available at secondary colleges and provide better facilities for learning the core trades associated with rural occupations, such as agriculture, automotive, metal trades and environmental studies.

Nine new Skills Stores are being established across regional Victoria to encourage people to undertake further education and training and to help employers meet emerging skills needs. Negotiations are well advanced for the transfer of the Commonwealth-funded Australian Technical Colleges in Bendigo, Geelong, Warrnambool/Hamilton and Bairnsdale/Sale to Victoria and integration with delivery of VET programs by secondary schools.

The introduction of the Victorian Certificate of Advanced Learning (VCAL), pre-apprenticeships and broader choices in vocational studies has dramatically improved the skills development choices available to young people.

The Victorian Government will build on this strong foundation by ensuring that young people have access to the agricultural studies, skills training and support they need to build a successful career in the farm sector.

Partnership programs

The Victorian Government is also keen to provide opportunities for students in urban areas to take up an interest in agriculture. The Department of Primary Industries and the Department of Sustainability and Environment also run programs such as LandLearn and Teaching Farms to encourage school studies about sustainable agriculture and natural resource management. Based on partnerships between urban and rural schools and community groups such as Landcare, these programs engage students in active learning and community environmental management projects.

Taking action

2.1 Strengthen primary industry skills

The Victorian Government will invest $308,000 over four years to develop a Primary Industries Workforce Development Plan. The plan will identify specific medium to long term skill and training needs in agriculture and associated primary industries. This will allow people to explore skills development and employment options in regional and rural Victoria, and assist farmers and other rural businesses to continue to be viable in regional areas by meeting existing and emerging skill requirements.

2.2 New trade wings at rural secondary colleges

The Department of Education and Early Childhood Development will work with secondary colleges across Victoria to develop a range of proposals to meet the training needs of rural secondary colleges. Bids for the 2008 round of Federal grants to establish Trade Training Centres at secondary schools will close on 9 May this year. Centre proposals will focus on local skill shortage areas in traditional and emerging trades and developing strong partnerships with local employers.

One priority will be new trade wings and Trades Training Centres at medium-sized rural secondary colleges specialising in trades in short supply in primary industries. These new trade wings and centres will improve the range of VET subjects available at these secondary colleges and provide facilities for learning core trades associated with rural occupations.

Some proposals are being developed by groups of schools in conjunction with local TAFE institutes. This will eventually provide a network of locations delivering higher level VET studies for students in years 11 and 12 and significantly improve local opportunities for young people to develop the skills they need to enter the workforce, as well as giving local farm businesses access to a larger pool of skilled workers.

2.3 Investment in regional TAFE facilities

The Government will continue its record of investment in TAFE institutes with a focus in rural areas and expand the availability of courses where skill shortages are identified in the Primary Industry Workforce Development Plan.

Further school and TAFE funding will be outlined in the 2008-09 Budget.

2.4 Rural Education Centres

In 2006, the Victorian Government announced plans to open three Rural Education Centres to provide opportunities for city-based Year 9 students to experience a term of rural education. Two of these – the Alpine School at Dinner Plain and the Snowy River Rural Learning Campus at Marlo – are up and running. These innovative centres are providing great benefits by breaking out of the traditional classroom model and exposing students to learning in a different environment.

Victoria’s third Rural Education Centre has a focus on agricultural studies and will open later this year to cater for 45 students at Glenormiston, near Colac. The 283-hectare Glenormiston campus has a long pastoral history that will now continue by passing on important skills and knowledge to Year 9 students from across Victoria.

What we’re already doing

The Government has a strong record on improving training opportunities for the primary industries sector and has made education its number one priority. The Government has:

• committed to rebuilding, renovating or extending every school in Victoria by 2016 including funding 500 schools by 2010 under the Victorian Schools Plan
• invested $13.5 million in the Community Regional Industry Skills Program (CRISP) which assists municipal councils, business and community organisations to tackle skills shortages and create sustainable jobs and industries across regional Victoria
• opened nine new Skills Stores at TAFE institutes across regional Victoria
• established a Statewide network of 31 Local Learning and Employment Networks (LLENs), which involve local schools, other education providers, industry and the community creating pathways into priority skills areas such as farming
• delivered pre-accredited and accredited training in farming-related skills throughout regional Victoria through the Adult Community and Further Education Board
• increased the capacity of Government school teachers to provide career advice for industries including the farming sector through the Careers Education Scholarship program and Industry Placement program
• set up a working group with the Victorian Curriculum Assessment Authority to provide advice to the Education Minister on the development of VCE and Victorian Certificate of Applied Learning (VCAL) subjects related to specific industries; with agriculture and horticulture the first to be considered
• offered a graduate program through DPI to provide opportunities for young people to undertake a two-year training and development program that places them at two or more DPI locations around regional Victoria
• attracted young professionals to regional Victoria through the Make Your Career Happen in Provincial Victoria campaign, which identifies regional skills shortages and opportunities and makes young people aware of study, employment and lifestyle opportunities in regional Victoria
• supported and encouraged the next generation of young regional leaders in agriculture and agribusiness through the Provincial Victoria Leadership Skills Program.

Healthy soils and a bright future

Case Study

Newbridge wool and cropping farmer, Lachlan Ralton, loves the wide horizons on the family farm, but it is the tiny creatures in the soil beneath his feet that he is thinking about.

At just 29, former city boy Lachlan chose farming as a way to explore his ideas about environmental balance.

He studied agricultural science at Dookie College and entered into a partnership with his uncle, who runs the 1,000-hectare family farm, Gourdie, near Bendigo.

Together they have purchased an adjoining property, run about 1,000 merino ewes, and plan to sow 600 hectares of cereal crops this year.

As a young boy growing up in urban Bundoora, Lachlan loved visiting the farm on holidays. Moving from the city to the country was a natural progression, with his interest in the environment encouraging his farming pursuits.

It is a decision he is glad he made. Lachlan enjoys being part of a strong community; he plays for the local Newbridge football team and later this year plans to wed his sweetheart and start a family.

While others have found life on the land to be difficult, Lachlan is optimistic about the future and sees soil management as a key way to overcome these tough, dry times.

“Farming is a great life and there’s definitely a great future or family farms, especially if community networks get together to share equipment and knowledge,” Lachlan said.

“Conventional farming has been a good system for a lot of years, but you can really become too heavily reliant on inputs like chemicals, fertilisers and energy; and that all increases your costs.

“Out here we’re trying to create the right environment for the microbes, fungi, bacteria and other creatures in the soil to thrive. They make phosphates and other nutrients more available to plants.

“We are still learning so I don’t have definitive answers, but there is a lot of interest in calcium levels in soils, so for us that means adding lime.

“Farming is just being able to recognise signs in the environment, and seeing how all the systems connect. I try to think about the impacts of what we do on the land and what could happen to the ecosystem.”

Broad agricultural landscapes of Victoria

Click Image for Larger Version

 

Action 3: Understanding and managing climate change

Victoria’s farm businesses will need to understand and manage climate change to successfully face the challenges and opportunities ahead.

Most farm business managers who have profited from agriculture over the past 150 years have been expert risk managers.

Substantial variability in rainfall, temperatures and extreme events have long characterised farming in Victoria, but our farmers are now facing a changing global climate.

In Victoria, average annual temperatures are projected to rise by 0.3 to 1.6 degrees Celsius by 2030. Farm businesses are likely to experience a drop in average rainfall, reduced water supplies and greater frequency and severity of droughts, storms and bushfires. Increased soil degradation and erosion are likely. Trees stressed by fires and drought will be more vulnerable to insect and disease attack, and aquaculture businesses may also be affected by declining stream flows.

The impact of climate change may vary across the State. While rising temperatures may increase productivity in temperate regions such as the south west, they may lessen agricultural productivity in the drier areas of Victoria.

Without adequate preparation, understanding and adaptation, climate change will impact on Victoria’s farm production. For example, if Victoria’s dairy farm sector fails to adjust to the long-term changes ahead, it could experience a decline in output of around four to five per cent by 2030 and 10 per cent by 2050.

At the international level, climate change will affect production overseas, influencing global agricultural prices. Victorian producers will need to prepare themselves for these changes.

Adaptation

Farm businesses will need sound business plans to meet the opportunities and challenges of climate change. Successful adaptation strategies will vary across regions and agricultural activities, as well as over time.

Farmers will need to adopt new strategies to maintain their productivity in a changing environment. For example, farm level strategies for the cropping sector could include diversifying varieties, shifting planting seasons, changing management practices, redesigning pest management and taking advantage of seasonal forecasting. For the livestock sector, strategies could include changing breeds and/or breeding strategies, managing heat stress in animals by increasing shade and water provision, and managing pasture productivity, pests and disease.

While Victoria’s farm businesses are best placed to make operational decisions, the Government is committed to providing the sector with the information and tools it needs to anticipate and manage the impact of the changes ahead.

Greenhouse gas mitigation

In 2005, Victoria’s agriculture sector contributed 13 per cent or 15.7 million tonnes of the State’s greenhouse gas emissions. Of those emissions, 76 per cent came from direct methane emissions from livestock, with much of the remainder being nitrous oxide emissions from soils, animal manure and nitrogen fertiliser.

Along with industry, the Victorian Government has undertaken extensive research into reducing emissions from agriculture, including developing new practices such as changing feed supplements for ruminant livestock.

Looking ahead, Victoria’s farm businesses will need to consider their role in mitigating emissions in the context of Australia’s broader response to climate change.

The centrepiece of Australia’s efforts to reduce emissions is a national Emissions Trading Scheme (ETS). Initially agriculture may not be covered by the scheme due to measurement difficulties and the trade exposure of the sector. However it is likely that major agricultural greenhouse gas emitters, such as large livestock businesses, will either be included or subject to other incentives to reduce emissions. Additional policy and research measures will be needed to support Victoria’s agriculture sector in driving further emission reductions.

Drought management

Greater climate variability will have long-term implications for the way farm businesses manage risk.

An ‘exceptional circumstance’ declaration (which triggers the eligibility of some farms for drought assistance) requires a rare and severe event with a one in 20- to 25-year frequency. Some regions in Australia have been declared to be in exceptional circumstances for more than 10 years.

Many farm businesses prepare well for low rainfall and continue operating without government assistance. It is increasingly accepted that direct financial business assistance during adverse seasons has undermined incentives for recipients to manage their business risks and prepare for the inevitable periods of dry conditions.

Since 2001, the Commonwealth Government has spent $3.5 billion across Australia on drought assistance, and is currently spending $2 million per day. Victoria has spent over $400 million on drought assistance since 2002-03. Across Australia, 29 per cent of Exceptional Circumstances (EC) assistance recipients have been receiving continuous assistance for between two and five years.

Victoria supports the Commonwealth Government’s review of EC assistance and the call from many parts of the sector for a re-think of drought relief. The Victorian Government’s view is that the review should focus on the importance of strengthening on-going support for productivity and competitiveness, for the wellbeing of farm families and communities, and encouraging widespread adoption of broader risk management approaches by farm businesses.

By shifting to a system that supports the development of new technologies, practice change and productivity growth, farm businesses will be able to manage risks and prepare for change. The Victorian Government will provide farmers with the tools and incentives to manage the impact of change while providing a welfare safety net to support those most in need. The Victorian Government will urge the Commonwealth to consider a new form of temporary welfare payment that is available at all times to farmers based on need, not weather.

Emergency management

In partnership with emergency service organisations, the Victorian Government plays key prevention, response and recovery roles following emergency events such as storm, flood and fire. Contemporary emergency management relies on collaboration between emergency service organisations, Government departments, local government and communities.

The need to develop and nurture this collaboration into the future will become critical as climate change increases the frequency and severity of emergency events.

The emergency risk confronting Victoria will require all Victorians to take some personal responsibility for managing or mitigating risk. Farm businesses need to manage the risks they face from emergency events through appropriate insurance and farm practices. The Government will continue to help prevent, respond to and mitigate the impacts of emergencies, and assist the community to recover and rebuild.

Taking action

3.1 Planning for climate change

The Government will provide funding of $5.2 million over four years to enable farm businesses to plan for climate change. This initiative will provide accessible and relevant information and research, and develop tools and techniques to build skills and engage key rural stakeholders and organisations. This will expand understanding about carbon and bioenergy markets, and identify barriers faced by Victorian farmers in adapting to climate change and reducing greenhouse gas emissions.

3.2 New technologies and strategies

New investment of $6.22 million over four years will be available to provide lamb, grains and horticulture farmers with new technologies and strategies to enable them to adapt their specific farming systems and practices to future climate conditions. These new technologies and strategies will be derived from the latest research and will integrate with existing and planned government and industry practice change programs to ensure that farmers have access to the best and most appropriate management packages.

3.3 Managing climate change in fisheries and aquaculture

Fisheries and aquaculture are important Victorian industries that may be especially vulnerable to climate change. These industries need to develop management practices that recognise the potential impact of climate change. Working with industry, the Government will develop a Victorian Climate Change Strategy for Fisheries and Aquaculture 2008-2018, which will assist fisheries managers and stakeholders to plan for and adapt to climate change.

3.4 National action

The Victorian Government is addressing climate change and will work with the Commonwealth and all other state and territory governments to develop an efficient and effective national Emissions Trading Scheme. We will also work with other governments as well as major farming bodies to re-examine the national approach to drought relief.

3.5 State action

The Victorian Government will develop a Climate Change Green Paper which will provide the framework for future Government actions, including those relevant to the farm sector.

3.6 Emergency management

The Department of Justice, in partnership with emergency service organisations, is developing an Integrated Emergency Services Strategy to enhance long term-strategic planning in emergency services and ensure sustainable services for the changing shape and needs of our communities.

What we’re already doing

The Victorian Government is taking action to help the agriculture sector to manage climate change. Further actions taken through the Future Farming strategy will build on these initiatives:

• extending the Our Rural Landscape program by $13 million in 2007-08 to better understand the impacts of climate change and design agriculturally-based ecosystem solutions
• providing $3.2 million over four years for research into adaptation in agriculture, forestry and fisheries for the Victorian Climate Change Adaptation Program
• establishing the Greenhouse in Agriculture program to provide abatement research to reduce methane and nitrous oxide, while maintaining profitable and viable production systems
• creating the Victorian Office of Climate Change in early 2007 to develop whole-of-Government policy and strategy, focused on long-term issues and the economic, environmental and social impacts of climate change
• more than doubling the emergency services budget from $254 million in 1999 to $538 million last year
• employing more than 200 new permanent firefighters since the 2003 Alpine fires to increase Victoria’s capacity to fight bushfires and undertake fuel-reduction burning
• investing more than $138 million in a response and recovery package after the 2007 bushfire season
• committing $70 million to a Flood Recovery Package after the 2007 Gippsland floods
• providing $2 million over three years to the Planning for Change program, which provides assistance to local government in drought affected areas so that they can engage with business and community groups and help them adapt to climate change.

Better pasture, more productivity, and a good night’s sleep

Case Study

Running his hands through lush pasture on his 400-hectare property in northern Victoria, Katunga dairy farmer Ross Nicoll reflects on how the implementation of a farm plan, laser levelling and the installation of a state-of-the art irrigation system have transformed his farming business.

Today, with these sound practices in place, Ross has doubled the amount of dry feed produced per hectare, and developed a farming system more able to cope with drought and climate change. “Because of the improved water use-efficiency we have increased the amount of dry feed per hectare from an average of seven or eight tonnes to 15 or 16 tonnes,” Ross said.

With Murray Valley Irrigation District water allocations at 43 per cent, Ross has reduced herd numbers from 1,000 in 2007 to 700 in 2008, while continuing to increase production per cow.

It was around six years ago that the drought started to impact on water allocations. In addition, the farm’s manually-controlled irrigation system demanded around-the-clock attention. With a young family of three boys, plus the challenges of water flow management, the big dry and increasing water and feed costs, Ross knew change was crucial to the future sustainability of the farm.

With assistance from the DPI’s Environmental Management teams and irrigation designers, Ross developed a whole farm plan. This plan integrated many aspects of water management and water use efficiency, which gave him the direction and confidence he needed to develop the property.

Development of laser grading, better designed channels and bay outlets, in addition to the upgrading of the recycle dam, contributed to improved water use efficiency. A radio-controlled water distribution system which can operate up to 24 hours a day, seven days a week completes the farm plan objectives.

“By using our water more efficiently we are achieving best practise. We are more professional in the way we manage the pasture and consequently have a more productive farm with fewer weeds and less chemical use,” Ross said.

Home grown pasture is integral in driving profit margins for the business and, in turn, high water efficiency allows for optimal farm productivity and a positive future.

Action 4: Strengthening land and water management

The long-term productivity of the farm sector relies on resources being used in a sustainable manner, requiring Victoria’s farmers to adapt their practices to manage land, water and environmental risks and improve the natural resource base.

Managing environmental risks and adopting more sustainable farming practices are now accepted as essential to successful, productive agriculture.

An important factor in achieving productivity growth in farming is the approach taken by Government to land and water management. A flexible Statewide regulatory framework can drive the development of robust and resilient farm businesses and communities.

As competition for land and water intensifies efficient markets will ensure that prices for these vital inputs reflect their true value, and result in greater productivity.

Farm businesses will benefit from a smooth and competitive water market that allows them to shift water to its highest value use. Farmers will also benefit from balanced and sensitive land use planning that ensures they can maintain, expand, reduce or intensify their operations with greater certainty.

The Victorian Government’s recently released Green Paper, Land and Biodiversity at a time of Climate Change explores how government, the community and landholders can work together to ensure Victoria’s land, seas and waterways are healthy, resilient and productive.

Victoria’s farm businesses are also increasingly subject to community expectations and scrutiny about their methods, environmental impacts and performance. Balancing these expectations with farm business objectives is a reality of modern farming.

Managing water

Victoria’s farm businesses depend upon water and use it in different ways.

Irrigated agriculture relies on groundwater, surface water and in some instances, recycled water. Forestry and dryland agriculture rely on water from rainfall, while inland aquaculture relies on water from rivers and streams. Some parts of the dairy industry rely heavily on water for irrigating pasture, watering stock and cleaning dairy sheds.

In the past, Victorian-irrigated farm businesses have enjoyed a relatively secure supply of water. They now face intense competition for scarce water resources. In the face of greater climate variability, strong population growth and continued low rainfall, this competition is likely to increase.

Maximising the benefits from available water supplies is critically important to the long-term growth and prosperity of farm businesses and communities. Enabling water to move to its highest value use through the market, managing an efficient allocation and entitlement system, and improving delivery infrastructure and on-farm water efficiency will remain important tools for farm businesses in the future.

Over the past eight years, Victoria has led the nation in water management and reform. We gave Constitutional protection to keep our water authorities in public ownership, we were the first Australian State to appoint a Minister for Water and have invested in major projects such as the Wimmera Mallee Pipeline. The 2004 Our Water Our Future plan delivered actions which have saved over 100 billion litres of water per year, and began the planning for the next stage of major water projects. Victoria’s market in water shares, now separated from land property rights, enables the movement of water to its highest value use.

The second phase of the Government’s water strategy, Our Water Our Future, will deliver the single biggest boost to Victoria’s water supplies in decades. A new desalination plant, major irrigation upgrades and an expansion of the Victorian Water Grid are the centrepieces of a $4.9 billion plan to secure water supplies for the long term. Modernising Victoria’s Food Bowl alone will take up to eight years to complete and will involve a total investment of $2 billion to ultimately capture around 425 billion litres of water – ensuring the future prosperity of the region by modernising ageing infrastructure to create a world-class irrigation system.

While the patterns and reasons for water trade are complex, efficient water markets can allow regional communities to adjust to changing demand for water in a timely way. Significant investment in the ongoing national reform of water markets will help to ensure that these scarce resources are used in the most effective and efficient way.

Changing use of land

As the traditional face of farming in Victoria evolves, our land-use planning system must also evolve.

Historically, rural land-use planning has focused on the notion of a landscape where agriculture is the presumed use. This is based on planning goals that include preventing a decline in productive agricultural land, containing urban sprawl and protecting biodiversity and rural landscapes.

The Victorian Government has recently reformed rural zones and created a new ‘Farming Zone’ where non-farming uses are significantly restricted. A key goal of these reforms is to ensure that farm businesses can maintain, expand and intensify their current operations without being affected by non-farming uses in rural areas.

“We play in a harsh environment and we have to be attuned to opportunities – and that’s what we’ve done with water.” Ardmona farmer Jeff Odgers

Urban migration to regional Victoria or new land uses, such as intensive animal industries or plantation forestry, can create conflict between productive and amenity land use. Land-use planning must provide greater certainty and productivity for farm businesses by setting a clear policy direction that balances complex and competing community demands.

The Victorian Government will continue to work with local governments to provide a strategic framework for local planning schemes. This involves increased expert advice and information on the needs of the farming sector from a State perspective, to provide the certainty and flexibility needed by farm businesses to respond to the changes and challenges ahead.

Natural resources management

As land and water managers, farmers have rights and responsibilities.

Victoria’s farm businesses invest around $500 million on natural resources management each year, including improved cultivation, replanting of native vegetation, and pest and weed management. They also spend an average of 85 days each year on natural resources management activities.

Good farm management practices have delivered significant private and public benefits, including improved productivity and amenity, reduced soil erosion and weeds, and enhanced biodiversity.

While many farm businesses are addressing land degradation, soil health, habitat and biodiversity loss by developing their management practices, there is scope for improvement. Historically, inappropriate Government policies and farming practices and land management have resulted in soil erosion, loss of nutrients and native vegetation, and increased salinity and soil acidification in some areas of Victoria. Improved knowledge about solutions, financial resources and collaborative action is helping to improve natural resources management.

The Victorian Government recognises its role in clarifying the responsibilities of landowners in natural resource management and biodiversity conservation, ensuring that farm businesses operating under appropriate guidelines have a community ‘licence to operate’. The Government also recognises its own responsibility to meet community expectations and assist farm businesses to improve environmental and cultural heritage management. The Government recognises that with the right incentives farm businesses can achieve a higher standard of environmental protection than that required by legislation. Voluntary efforts combined with support from Government, such as the Landcare program, have delivered significant local improvements over the last 20 years.

Recently, new approaches have also shown promise, with market-based instruments such as trading mechanisms, auctions and price signals (which influence how landholders manage environmental assets) providing additional incentives. Victoria’s White Paper, Land and Biodiversity at a time of Climate Change will build on these new approaches by working with the private sector to increase investment in improved land and biodiversity management, using carbon markets to improve biodiversity and land health, and expanding ecosystem services markets such as Bush Tender and Eco Tender.

Weeds and pest animals

Despite substantial successes managing a range of invasive plants and animals, Victoria faces new and growing threats.

Increased trade means that Victoria faces a greater range and number of invasive species. More than 2,500 exotic plant species already in Australia could become significant weeds and many new species could enter the country. The majority of these species are not covered by existing approaches.

The Victorian Government has delivered a new biosecurity approach to invasive plants and animals, focusing on mitigating invasive species risks to the economy, the environment, social amenity and human health. Action is being taken to prevent new, high-risk invasive plants and animals from becoming established, eradicate high-risk invasive plants and animals in their early stages, contain high-risk established invasive plants and animals, and protect priority assets from the impact of weeds and pests.

The Government will pursue a new approach that contributes to a healthier and more productive natural resources base, and enhanced biodiversity.

Taking action

4.1 New action on weeds and pests

The Victorian Government will invest an additional $20 million over four years for a range of initiatives to tackle weeds and pests, including:

• supporting local government in their management of weeds and pests on roadsides
• developing incursion and treatment plans for regionally prohibited weeds
• improving early response capability for new and emerging pests in a changing climate
• increasing voluntary compliance for regionally controlled weeds
• more effectively controlling weeds and pests on public land by expanding the Government’s Good Neighbour Program
• improving the use of bio-controls for management of widespread weeds
• reviewing wild dog management options
• increasing community involvement in more targeted programs for integrated fox management.

4.2 National action

The Victorian Government will work with the Commonwealth Government and the Council of Australian Governments (COAG) to progress national water reform in a way that enhances Victoria’s water market, allocation and entitlement system, and improves delivery infrastructure and on-farm water efficiency.

Over $100 million in irrigation upgrades will begin in the first half of 2008 as part of Stage 1 of the Food Bowl Modernisation Project – the biggest water infrastructure upgrade in Victoria’s history. In March, the Commonwealth Government agreed to invest up to $1 billion in Stage 2 of the project – on top of the $1 billion already committed as part of the Victorian Government’s 2007 Water Plan. Stage 1 of the project will capture around 225 billion litres of water, to be shared equally by local irrigators, rivers and Melbourne.

As part of the funding agreement with the Commonwealth, the water savings from Stage 2 will be shared equally by irrigators and the Murray River. This brings the total water savings from Stage 1 and Stage 2 to around 425 billion litres each year. The Victorian Government will continue to work with the Commonwealth in developing Stage 2 of this important national project. We will also be active participants in national reviews of inter-district trading caps and exit fees. We will seek to refine and clarify water property rights to address the emerging effects of climate change on water availability, ground water extraction, land-use change and farm dams.

4.3 Land and Biodiversity White Paper

The Victorian Government will continue working with community groups and landowners to finalise the Land and Biodiversity White Paper. A green paper has been released and further consultation will be undertaken. A white paper will then be released in 2009 and will direct policy and investment priorities in natural resources management, land health and biodiversity for the next two decades.

4.4 Improving rural land-use planning

A new Regional Strategic Planning Expert Group will be established to identify and plan for future scenarios for farming and farming communities. Funding of $3.79 million over four years will be provided to establish the expert group and support its work, which will include identifying barriers to adjustment, developing land-use planning policy to help farmers adapt, delivering regional land-use planning projects identified by the group and, where necessary, changing statutory planning tools to ensure policy alignment with directions in the Future Farming strategy.

What we’re already doing

The Future Farming strategy builds on existing support provided by the Victorian Government, including:

• developing Victoria’s Biodiversity Strategy – a national benchmark for biodiversity conservation and management that outlines how to conserve native species, communities and gene pools, prevent threats and encourage community involvement. It fulfils Victoria’s commitments under the national Strategy for the Conservation of Biodiversity
• implementing Bush Tender – a groundbreaking, auction-based approach to improving the management of native vegetation on private land. Bush Tender is being used in north-east and central Victoria as part of the $502 million Moving Forward regional economic initiative. A further $2.7 million has been provided to extend Bush Tender across other parts of Victoria between 2006 and 2009
• developing the Soil Health Policy Framework to guide investment and strategic policy, to ensure healthy soil continues to support primary production and ecosystem services, and is maintained as part of natural capital
• providing additional funds to protect biodiversity assets across Gippsland, south-west Victoria, the Mallee and the Grampians through fox, rabbit and weed control programs
• reducing red tape associated within Victoria’s planning system and improving the effectiveness and efficiency of land-use planning across the State
• delivering the next stage of the Our Water Our Future water-saving campaign, which provides water security for Victoria’s growing population and economy in the face of drought and climate change. Key initiatives include:
  – $2 billion for the Food Bowl Modernisation Project to upgrade the Goulburn Murray region’s irrigation infrastructure (jointly funded by up to $1 billion from the Commonwealth Government, $600 million from the Victorian Government, $300 million from Melbourne Water and $100 million from Goulburn-Murray Water)
  – adding more than 250 kilometres of new pipelines to the Victorian Water Grid, giving the State a network of almost 10,000 kilometres of pipeline, including the Wimmera Mallee pipeline, to deliver water to where it is needed most
  – implementing Regional Sustainable Water Strategies to deliver on the National Water Initiative and support regional water planning to ensure water security over time.

“Before I started, I wanted to be a computer technician and if that failed I was going to go into the dairy industry. But now I’ve learnt that in the dairy industry they need computer technicians, so I can combine the two.” Dairy industry trainee Josh Ailey

Turning the tide – from weeds to productive land

Case Study

When dealing with the South American weed Serrated Tussock, Victorian farmer Scott Chirnside realised that keeping farm land productive required land holders to think global, act local and help their neighbours to do the same.

Serrated tussock is one of Australia’s worst weed invaders because of its ability to spread rapidly, causing severe economic and environmental impacts.

Serrated tussock is one of the main threats to basalt grasslands – Victoria’s most valued and vulnerable native vegetation community. It has high fibre and low protein content, resulting in significant loss of livestock production. Heavily infested areas cannot support livestock.

Over the past 10 years, Scott has played an important role developing a community-based approach to managing serrated tussock.

The success of this approach reflects the Victorian Community Weed model, which involves the community in pest management, improving land productivity, securing markets, and protecting the environment.

As a result, local farming communities, Landcare groups, industry bodies and Catchment Management Authorities across Victoria have worked together to reduce the area infested by 37 per cent (from 130,000 hectares to 82,000 hectares).

More than 60 per cent of the remaining 82,000 infested hectares are under management programs.

“Land managers, hobby farmers, industry and semi-government agencies all have a responsibility to tackle the weeds on their patch,” Scott said.

“No matter where you are you have to have every level of government sitting in the one room together with private landholders and commercial industry representatives.

“It’s the only way to achieve the kind of coordinated action and community awareness necessary to make these land areas productive again.”

The Victorian Serrated Tussock Working Party operates on an annual budget of $1 million from the Federal Government and other sources, including $200,000 from DPI.

Today, the Victorian working party includes representatives from 27 Landcare groups, 11 local councils, five Catchment Management Authorities, DPI and the Department of Sustainability and Environment.

Scott now has an Australia-wide role as Chair of the National Serrated Tussock Management Group.

Water trading and successful farming

Case Study

Ardmona dairy farmer Jeff Odgers recognises that success and survival in agriculture demands constant improvement and a sharp eye for any tactic that can deliver an advantage.

“We play in a harsh environment and we have to be attuned to opportunities, and that’s what we have done with water,” Jeff said.

The father of three, who lost a leg in a trenching accident and survived a battle with cancer, is now a Director of Murray Dairy Incorporated (a regional research and development program).

Jeff owns 190 hectares and runs 375 milkers in the Central Goulburn Irrigation District. His farming operation is pasture-based in normal irrigation seasons, and generally water is used on-farm to grow feed. But with temporary water trade prices reaching as high as $1,200 per megalitre, selling water and buying dry feed proved a more effective strategy.

Victoria’s water market enables permanent trade of ongoing rights to allocated water, as well as temporary trade, where some or all of the water allocation in the current season is transferred but the ongoing right is not.

Jeff carried more than 70 megalitres from the previous season and used a total of 100 megalitres to irrigate and create a ‘spring’ on the best parts of his farm to grow pasture. He then traded on the temporary water market from late September to mid-November, selling off a total of 220 megalitres in five parcels.

“That helped our cash flow enormously and we were able to go out and buy dry feed and grain mix to supplement our pasture,” he said.

Since then, Jeff has been able to replace most of the water sold in the spring with water purchased at lower prices in the autumn.

“Milk returns, relative to the price of water, grain, hay, nitrogen fertiliser (they are all variable inputs) determine the production system that we run with during a given season”, he said. “We are interchanging inputs in order to drive maximum profits with manageable risk. That’s the way it is: farms in this region have come a long way in terms of understanding the key numbers in their business.”

Action 5: Helping farming families to secure their futures

As the farm sector enters a new era, there is a clear need to build the capacity of rural communities to manage and adapt to social, cultural, economic and environmental change.

Rural communities are renowned for being innovative and resourceful in the face of significant challenges. They have a strong sense of community and build wide-ranging networks. Many residents participate in voluntary activities, take on leadership roles and consistently report high levels of personal wellbeing and satisfaction.

Robust and resilient farm communities are built on productive and competitive businesses and good social networks. There are real challenges ahead for rural communities in responding to and managing rapid change in the farm sector and in regional Victoria more broadly. But there are also significant new opportunities and possibilities. The role of Government is to work with these communities to ensure that they have the support, skills and information they need to capture the opportunities offered by the new agricultural landscape.

Social and demographic change

Since the 1970s, average life expectancy in rural Victoria has increased by almost 10 years. Birth rates have dropped, the baby boomer generation are farming for longer and young adults are leaving to take up education, work and lifestyle opportunities elsewhere. These trends are resulting in a pattern of structural ageing in farm ownership and in many small rural towns.

Urban environmental preferences and ‘tree-change’ migration are increasing the price of land in amenable and accessible parts of the rural landscape. Farm sizes in these areas are decreasing and enterprises are intensifying. This migration is changing the traditional social composition of rural towns and communities, enhancing the skills base, increasing cultural diversity and having an impact on the capacity of some rural communities to manage change.

While Victoria’s primary industries have increased productivity, the rise of highly efficient, large-scale agriculture in some parts of the State has reduced the demand for local labour and shifted services to larger regional centres.

Smaller towns and communities now play a critical role in the growth of regional centres by providing lifestyle opportunities, affordable housing, workers, consumers, recreational areas and tourist attractions. The major centres contribute to the survival and growth of nearby towns by providing jobs, education and health services, and retail, cultural and recreational activities.

The Victorian Government has a long record of driving growth and building confidence in rural towns and communities. In the face of the new challenges and opportunities ahead, the Government will support farmers and their families to manage change and make sound decisions about their future. The Government will also continue to provide an extended Rural Financial Counselling Service in Victoria for farmers and their families.

Farm family health and wellbeing

Farm family health and on-farm safety is a significant issue for the long-term human capital and workforce capacity of major farming industries.

Stress and mental health issues are widely recognised as having an impact on the capacity of farmers to make decisions and manage change.

The Government will ensure that health initiatives support farm families in areas of highest need that are undergoing rapid change, while working to understand and improve the health and wellbeing of farmers and their families across the State.

 

Taking action

5.1 Working with rural communities

The Victorian Government will invest $3.74 million over four years towards the Rural Futures Initiative to engage and work with 12 rural, agriculturally-based communities each year. The initiative will assist communities, agricultural industries and farmers to make decisions about their future and adjust to change. The proposal will provide key information relevant to farmers and rural communities experiencing change, as well as encourage dialogue between farmers, communities and stakeholders, and support local decision-making processes.

5.2 Farm family health

The Sustainable Farm Families Program will be extended at a cost of $2.18 million over four years to support the physical, mental health and wellbeing of farmers and their families. Funding will be used to run workshops and focus on practical steps to improve the lives of farm families, targeting 500 farmers in areas that are undergoing significant change.

5.3 Case management for farmers

Additional funding of $3.46 million over four years will be provided to pilot a targeted case management service for farmers undergoing adjustment and transition, including the continuation of rural financial counselling support. This initiative will help farmers and their families choosing to leave farming to make the transition, and ensure coordinated delivery of Government services to farm families.

5.4 New National Centre for Farmer Health

The Government will provide $2.4 million over four years to create a National Centre for Farmer Health. The new centre will aim to improve the health and wellbeing of farm workers and their families across Australia. Research programs will investigate the causes and consequences of poor health within the farming community and seek to develop cost-effective policies and programs to improve physical, mental and social health outcomes. Education and training programs will also be offered to health professionals working with the farming community to increase their skills and knowledge about farm-related health issues.

“Farming is a great life and there’s definitely a great future for family farms, especially if community networks get together.” Newbridge farmer Lachlan Ralton

What we’re already doing

The Victorian Government has provided strong support to farmers, their families and rural communities, including:

• implementing the $502 million Moving Forward in Provincial Victoria blueprint for continued population and economic growth in provincial Victoria, with the following major initiatives:
  – a new $100 million Provincial Victoria Growth Fund, to help regional communities capture opportunities for economic and population growth
  – an additional $25 million Small Towns Development Fund, to help smaller towns generate new opportunities for growth through economic and community infrastructure
• providing grants to community organisations and local government to undertake community planning, strengthening and infrastructure projects through the Victorian Community Support Grants program. The program has been in place since 2004 and has supported a large number of rural communities to solve local issues
• investing $1.3 million each year in the Rural Financial Counselling Service, which provides free and impartial financial advice to farm businesses
• delivering the Rural Futures Initiative to help farmers, industries and communities in seven locations that are undergoing significant change to make the best possible decisions about their futures
• supporting small rural communities to work together to plan for the future, deliver new and improved facilities and services and increase participation through the $10 million place-based Community Building Initiative
• enhancing the resilience and capacity of communities and individuals to respond to and manage change through the Community Learning Partnerships funded by the Adult Community and Further Education Board
• providing targeted health support services to 1,000 Victorian farmers through the Sustainable Farm Families program
• employing additional rural mental health counsellors, providing grants to farmers and farm related businesses to help them to retain apprentices, and assisting severely drought affected families through the Victorian Drought Response program
• employing Community Engagement Officers – Women in Drought in five rural regions to create opportunities for rural women to meet, share information about local activities and approaches, and develop supportive networks to deal with drought and climate change
• ensuring access to Maternal and Child Health services in all communities in rural Victoria and undertaking community building demonstration projects in 16 rural communities.

Sustainable farm family

Case Study

Recovering in hospital after a serious accident gave Kaniva cropping farmer Harry Rabone plenty of time to think about the importance of health.

“I had a motorbike accident on the farm a few years back, ended up in hospital, and wasn’t expected to come home,” Harry said. “It made me realise that health is pretty important.”

When DPI ran a Sustainable Farming Families health education workshop in nearby Horsham, Harry and his wife Jacci took time out from their busy farming schedule to attend.

For Harry and Jacci it was a life-saving decision. Basic health checks included as part of the workshops identified an early-stage skin cancer on Jacci’s leg. Harry found he had high cholesterol levels which, combined with a family history of high blood pressure, required immediate attention.

Both health issues were addressed immediately with excellent results, and regular health checks, exercise and a healthy diet are now part of the Rabone’s family routine.

“I try to eat better and do a bit more exercise – after a long day in the tractor I’ll ride the pushbike, and instead of taking the ute down to the workshop I’ll walk,” Harry said.

“We also learned about healthy eating, checking food labels, the importance of exercise, and looking out for changes in your own body and in your partner.

“This program helps you become pro-active about health, and not just be reactive when something goes wrong.

“I’d certainly recommend these programs to everyone, and not just people in rural areas.”

The Sustainable Farming Families health education program is being rolled out to 1,000 farming families across Victoria over the next two years. Topics include cardiovascular disease, cancer, stress, diabetes, women’s and men’s health, farm safety, nutrition, physical activity, anxiety and depression.

The program is delivered by DPI and Western District Health Service, along with rural health services across the state and agricultural industry groups.

Action 6: Developing new products and securing new markets

To succeed in an increasingly competitive environment, farm businesses must increase their capability in developing new products, identifying and securing new markets, and maintaining access to existing markets.

Agricultural production in Victoria is highly export-focused, with some industries such as dairy exporting more than 65 per cent of their produce. This highlights global competitiveness, but also emphasises the importance of market access.

New opportunities and challenges are now emerging in international food and commodity markets. Rising incomes in high-growth countries such as China and India will translate directly into increased consumption and potentially new markets. On the other hand, Victoria’s farm businesses will face increasing pressure as producers in these countries and other countries also target the same markets. Some consumers are also looking beyond price and quality attributes to the health, environmental and ethical attributes of food.

In the future, understanding markets, improving the value of farm products and creating efficient supply chains will be a critical factor in the competitiveness of the farm sector.

Market access

While Victoria’s farmers supply products to more than 100 countries, access to some markets for some products is limited or completely restricted. Easing these restrictions will create new market opportunities for Victoria’s farm sector.

Multilateral reform, bilateral trade agreements and a variety of country-specific tariff and non-tariff barriers shape farm businesses’ access to overseas markets. In the longer term, multilateral trade offers the best opportunities for market access. In the interim, bilateral negotiations on tariff and non-tariff barriers have the greatest potential to improve market access.

The Victorian Government will continue to work with the Commonwealth to provide intelligence, liaison and research to substantiate market access requirements for Victoria’s farm sector and to fast-track priority market access negotiations.

The Government will also focus on emerging sectors with the potential to secure new international markets, such as aquaculture.

Biosecurity

Australia has a high biosecurity status as it remains free from many of the harmful pests and disease that affect agriculture, human health and the natural environment overseas. This has given Victoria and Australia a competitive advantage as a major agricultural exporter. However, we are highly susceptible to exotic pests or diseases that breach the quarantine barrier.

In recent years, Victoria’s and Australia’s biosecurity has come under significant pressure from the increasing movement of people and goods; the evolution of new or more pathogenic strains of infectious agents; and changes in climate, ecology, population demographics and resource use that affect distribution of pests and diseases.

In 2007, Victoria’s farm sector was affected by outbreaks of fruit fly, anthrax, abalone virus and equine influenza (EI). The EI outbreak, while infecting only horses in New South Wales and Queensland, demonstrates how such events require significant Government and industry resources to achieve successful prevention, control or eradication.

Victoria’s major response capability for animal and plant pests, disease and invasive species is coordinated by Biosecurity Victoria (BV), a division of DPI. Key activities of BV include surveillance and diagnosis to eliminate the possibility of an exotic pest or disease, with a strong emphasis on the early detection of exotic organisms.

The Government will strengthen Victoria’s biosecurity capabilities, ensure existing biosecurity infrastructure is more sustainable, and develop measures to address new and emerging biosecurity threats.

Food safety and quality

Good food safety systems are critical for public health and are a prerequisite for access to any local or international market.

All governments play a key role in establishing and enforcing food safety standards. Most of Victoria’s farm businesses seek compliance with industry quality standards. Also most exporters are required to meet compulsory minimum quality standards.

Victoria has led the way in Australian food safety reforms and the Government will continue to strengthen its partnerships with the farm sector to consolidate Victoria’s reputation for clean, high quality food, while minimising the regulatory burden on farm businesses and the food chain.

Animal welfare

A high standard of animal welfare is central to running a successful farm business and ensures market access of animal products domestically and internationally.

The wider community is paying increasing attention to livestock management on farms. The Government has helped farm businesses to meet the animal welfare expectations of the broader Victorian community through codes of practice and guidelines. However, the community is now looking for greater levels of assurance from governments that livestock producers are managing their farm animals in accordance with the guidelines.

Victoria has played a leading role in the implementation of a national process to develop mandatory standards for the management of farm animals. This will provide enhanced animal welfare outcomes in key industries and foster greater understanding and confidence in the community about the animal welfare performance of the Victorian farm sector.

The Government will take new action to ensure that production systems in Victoria meet the appropriate animal welfare standards.

Taking action

6.1 Better market access and supply chain development

The Victorian Government will provide $2.93 million over four years to improve industry and Government understanding and response to market and value chain challenges. This includes developing a more responsive and internationally competitive agrifood sector that is able to capture new market opportunities. This initiative will focus on developing new and existing markets, fostering alliances within value chains and supporting market driven enterprises for farmers.

6.2 Support for organics

An additional $1.08 million over three years will be provided to assist the Victorian organics sector to develop its resilience and further differentiate and substantiate organic products. The funding will be used to develop a reference group to help the industry tackle current challenges and capture emerging opportunities. This initiative meets the Government’s commitment to the sector given in its response to the review of the moratorium on GM canola.

6.3 Support for aquaculture industry

Aquaculture is an emerging sector in Victoria with the potential to be a major international industry. Aquaculture also provides opportunities for horticultural and dairy businesses in northern Victoria to diversify, enabling them to produce Murray Cod and other species for international markets using existing irrigation infrastructure and water.

New funding of $4.05 million over four years will enable DPI and Regional Development Victoria to provide innovative research, market and value chain development and investment attraction activities for the development of aquatic farming systems and services, genetically improved species and health enhancing products. This initiative will integrate agriculture and aquaculture production systems by supporting existing agriculture to diversify into the seafood industry.

6.4 Support for the grapevine industry

Funding of $3 million over four years will be provided for a targeted program to improve biosecurity and market access for a number of Victoria’s grape-growing regions that currently have an unknown phylloxera status. The Bendigo/Heathcote, Bellarine Peninsula and Macedon regions will be surveyed for phylloxera to enable these to be declared as phylloxera exclusion zones (PEZ). This will be accompanied by a community awareness and compliance program that will help maintain the status of the zones and prevent the spread of phylloxera in other parts of the State.

In addition, we will establish a Victorian Viticulture Biosecurity Committee to ensure that industry plays a key role in the management and funding of future phylloxera and exotic grapevine pest control programs.

6.5 Ongoing leadership in biosecurity

New actions will be taken to consolidate Victoria’s leadership in biosecurity, including:

• leading the review and development of Victoria’s new Biosecurity Strategy to identify current gaps in the State’s biosecurity framework and risk management procedures
• placing a greater focus on the development of a seamless national capability to prevent, prepare for and respond to pests, diseases and invasive species that affect agricultural production, as well as natural and built environments
• developing a Biosecurity Framework to combat invasive plants and animals.

6.6 Improved food safety and standards

The Victorian Government recognises the importance to the farm sector of a food regulation regime that supports and manages food safety, while allowing the food industry scope to innovate and respond to market opportunities. The Government will:

• implement its response to the inquiry by the Victorian Competition and Efficiency Commission into food regulation in Victoria with the aim of achieving a more simplified food regulation system
• continue to advocate at the national level for the principles of good regulatory practice to apply to food regulation and for the development of national food standards through the Council of Australian Government’s Food Regulation Agreement
• address gaps in knowledge about food safety objectives and improved systems and standards to mitigate risks to food.

6.7 Improved animal management

The Victorian Government will continue to work with the Commonwealth Government, other states and livestock producers on practical national animal management and biosecurity standards for the livestock industries.

In consultation with stakeholders, the Victorian Government will develop a Livestock Management Bill. This will validate the operation of the national standards and protect complying farm businesses from intrusions that jeopardise the integrity of their biosecurity systems.

6.8 Support for plantation industry

The Victorian Government has a strong record in facilitating sustainable plantation development on private land in Victoria. In line with the new Timber Industry Strategy, the Government will continue to support the plantation industry by providing an environment that supports sustainable investment and employment, and assist the industry’s adaptation to environment, social and economic change.

What we’re already doing

The Victorian Government has a strong record of achievement in supporting the farm sector and regional industries to access new markets, including:

• working with commercial partners to develop novel products and processes that increase nutrition and industry competitiveness through our role as a joint partner in Australia’s leading food, health and nutrition research organisation, Food Science Australia (FSA)
• providing $11 million from 2004 to 2008 for the Next Generation Food Strategy – a framework to drive growth in the food production and processing sector, targeting seven key areas: sustainability, product integrity, industry and regional development, exports, innovation, education, training and careers, and promoting excellence
• maintaining and developing biosecurity and market access programs for the livestock, plant, fisheries and forestry industries through Biosecurity Victoria, an agency of DPI
• providing a research, training and teaching resource in animal welfare science through the Animal Welfare Science Centre, in collaboration with the University of Melbourne and Monash University
• reviewing planning scheme requirements for timber plantation developments consistent with the Government’s response to the Victorian Competition and Efficiency Commission’s report on Regulation in Regional Victoria.

From local horticulture to global aquaculture

Case Study

When Sunraysia horticulturalist Col Beasley turned his mind to aquaculture, he figured the simplest way to grow Murray Cod would be to create a feedlot system; similar to the one used for sheep and cows, but underwater.

It has proved to be a simple and spectacularly successful approach, with domestic and Asian markets clamouring for all the fish he can produce.

Col Beasley owns the 3,450-hectare Thurla Farms at Red Cliffs in the Sunraysia district, which he converted from dryland to irrigated horticulture, growing wine grapes, melons, avocados, asparagus and grain.

To manage risk by diversifying and to explore more efficient ways to use precious water resources, Col began to experiment with raising Murray Cod hatchlings in his irrigation storage dams.

Col and his sons designed and patented the modular ‘underwater feedlot’ system for growing the cod and, after just two years of commercial production, he has established keen markets in Asia for the firm white flesh and delicious taste of Murray Cod.

He has sold his farming business and licensed his technology to leading Australian computerised monitoring system manufacturer, Computronics Holdings, which plans to refine the electronic monitoring systems Col developed to manage the fish hatchery and to market them to other farmers.

Computronics already develops and markets technologies to improve farmer productivity and long-term sustainability and Col’s dam-based aquaculture system is just one of several new technologies Computronics is looking to add to its portfolio.

Meanwhile Col has negotiated with Sunraysia Rural Water Authority to pipe in 3,800 megalitres of nutrient-rich ‘Class C’ treated waste water for drip irrigation of an expanded horticultural zone, and root zone irrigation of grain, cereal and fodder crops.

The treated waste water is ideal for growing energy, fibre and fodder crops, as well as for growing other fish varieties for use as feed stock for the Murray Cod.

By using waste water to grow grains and other fish for use in the Murray Cod fish meal, Col plans to work with Computronics to achieve the ultimate goal of a fully sustainable business, which produces fresh fish and fruit; recycles waste into fertiliser, fuels and energy; protects natural waterways and biodiversity; and re-uses urban waste water.

“I have been farming for 38 years, and it’s about advancing where we are – life on the land is getting tougher, and if you don’t move with the times you don’t survive,” Col said.

“Take fertiliser for example – it went to $1,300 a tonne. We can’t grow anything at that price, but we can make fertilisers from our farm wastes while we grow fish for export markets and then use those fertilisers on valuable food crops.”

Cutri Fruits – new ideas and new markets

Case Study

Faced with the loss of key international markets, skyrocketing water costs, and falling domestic prices, Swan Hill stone fruit growers Cutri Fruits set out to survive and thrive using new ways of thinking.

Dominic and Connie Cutri established their stone fruit farm at Woorinen, growing peach, nectarine, apricot and plum trees, and were regional pioneers with automated irrigation systems.

In 2005, their son Gaethan and his wife Nicole gave up their city careers and returned to help run Cutri Fruits. Gaethan, a lawyer, and Nicole, a public relations specialist, brought new ideas for business management and marketing to the farm, which has helped make it more efficient and open new markets for their delicious fruit.

“With the strong Australian dollar, the loss of the Taiwanese market, and price competition from Chile and South Africa, Cutri Fruits was of the opinion that the local market would be oversupplied and prices would fall,” Gaethan said.

“And like many other horticultural producers, we are being forced to buy water on the temporary water market at up to $1,200 per megalitre.”

With the Australian market saturated, and prices falling below the cost of production, Cutri Fruits became direct exporters.

Nicole’s experience in marketing and public relations proved invaluable in identifying, costing and executing an effective international marketing and export strategy. Austrade and the Victorian Government helped identify potential buyers, while Nicole and Gaethan travelled overseas to meet buyers.

The move paid off and last season Cutri Fruits exported between four and 24 tonnes of fruit each week to buyers in the United Arab Emirates, Singapore, Hong Kong and Thailand.

“We’re definitely exporting again next year,” Gaethan said. “If we can survive and maybe thrive when it’s this tough, it’s only going to get better.”

Action 7: Transporting products to market

To get products to market, farm businesses rely on access to reliable and economical transport options serving both domestic and international outlets. Rail infrastructure has declined over the decades and a major re-investment program is underway to provide the track needed to transport products to market.

Farm businesses, and the grains industry in particular, rely heavily on the regional freight network for the efficient, timely and safe movement of agricultural produce. The increasingly competitive global marketplace means that moving produce to and through Victoria’s international gateways in an efficient and timely matter is critical.

Agricultural produce is exported through three of Victoria’s commercial sea ports – Melbourne, Geelong and Portland. Perishable high-value, low-volume products are increasingly air-freighted through Melbourne or Avalon Airports. Most Victorian food and fibre exports, however, are transported by ship in bulk form. This means the rail network and access into the Port of Melbourne are critical issues for farmers.

The Victorian Government is working in partnership with the private sector to undertake significant investment in Victoria’s rail, road and port network. The Government has taken action to ensure that the State’s transport network has the capacity to support changing industry needs and meet the growing freight task over the next 20 years.

Road and rail transport

Victoria’s freight task is expected to double between 2004 and 2024, so further investments in our road and rail network are needed to provide for the future needs of the State’s farm sector. Road freight is expected to grow strongly, but Victoria’s rail network will need to take up a higher share of the freight task. Reduced grain harvests in recent years and a deregulated market environment have contributed to reduced demand for rail freight services in some areas; at the same time the condition of the track has deteriorated as a result of the failed privatisation of the regional rail network.

The Victorian Government is undertaking a number of initiatives to expand regional Victoria’s network of inter-modal terminals, including funding for an inter-modal terminal at Dooen (near Horsham and Shepparton) and feasibility studies at Geelong. The Government is also securing AusLink 2 funding for the Nagambie bypass; Princes Highway East Duplication; Princes Highway West Duplication; and various improvements along the Western Highway, Geelong Ring Road and Colac-Lavers Hill Road.

Following its $133.8 million ‘buy back’ of the country rail network from Pacific National in 2007, the Victorian Government commissioned the Victorian Rail Freight Network Review and is implementing a number of the review’s recommendations. The Government is committed to a sustainable rail freight network for Victoria that gives the agriculture sector a choice on how they get produce to market.

The rail freight network has faced a series of challenges, most recently the drought, which has cut tonnages. But as the review confirms, one of the greatest challenges was a flawed Kennett Government privatisation that did not require the private operator to invest in the network.

The privatisation created a maintenance backlog, requiring a methodical and prioritised works program. After buying back the track, the Government immediately injected $25 million to undertake essential maintenance.

The Government is committed to improving the rail network across Victoria. Work has started on the $73 million upgrade of the Geelong to Mildura rail line, one of Victoria’s busiest freight corridors with around 1.5 million tonnes of product transported each year. When the upgrade is complete, freight train speeds will reach up to 80 kilometres per hour, reducing travel times from 14 hours to 10 hours and creating a more competitive transport alternative.

Air freight

The use of air freight has expanded dramatically in recent years – giving many specialist farmers access to new markets for time-sensitive quality products. There are huge markets overseas for fresh produce – and sectors such as cut flowers and seafood have grown rapidly through the opportunities opened up by air freight.

Victoria’s Avalon and Melbourne Airports operate export services. Both airports have considerable scope for further development to enable Victoria to become the gateway of choice for air freight operations.

Victoria’s ports

Victoria’s four commercial trading ports play a vital role in supporting Victorian farmers. In total they handle in excess of $80 billion in trade each year – providing an international gateway to over 300 markets. The Victorian freight and logistics sector accounts for 14.7 per cent of Gross State Product – one of the highest percentages in the western world. The Port of Melbourne is Australia’s largest container and general cargo port.

Currently 31.2 per cent of exports in the Port of Melbourne originate in regional Victoria and the majority of these exports are agricultural products or processed food, beverages and other commodities, including horticultural produce, dairy and grains. This reflects the trend towards the containerisation of agricultural commodities.

The Victorian Government recognises the crucial role our ports will play in growing the prosperity of regional Victoria. In 2004, the Government released its vision for the future development of our commercial trading ports through the Victorian Ports Strategic Framework. Draft development plans have been released for all four of Victoria’s commercial ports. These identify the challenges facing our ports, and the opportunities to increase efficiency through technological advancements.

Melbourne Markets relocation project

The relocation of Melbourne’s wholesale fruit and vegetable market is also expected to provide substantial economic benefits to the State. This important project will create a more efficient market precinct and free up the existing Footscray Road site for port and rail development over the next 20 years. In one of the largest infrastructure projects being undertaken in Victoria, the market will be relocated to a new site in Cooper Street, Epping, in Melbourne’s north. It will replace the ageing and restricted facility at Footscray with a large, modern, innovative and efficient fresh produce trading and distribution precinct.

The core of the precinct will be the relocated Melbourne Wholesale Fruit and Vegetable Market and National Flower Centre currently situated in Footscray Road. The precinct will also include an extensive, complementary development accommodating facilities and businesses that improve and develop the transportation, handling and marketing of fresh produce.

The Melbourne Markets are an important part of the State’s economic infrastructure, with an annual turnover in excess of $1.6 billion. As it is fully developed over the next 10-20 years, the new market precinct is expected to drive over $1 billion of investment on the site. The principles under which the market will be developed have been signed off by the State and the market community’s project entity Victoria Fresh Markets Pty. Construction is due to begin in early 2009, with market operations due to commence in 2011.

Taking action

7.1 Regional rail review

In December 2007 the Victorian Government released the final report of the independent Rail Freight Network Review chaired by the Hon. Tim Fischer AC, Switchpoint – The template for rail freight to revive and thrive! and immediately reduced access charges for domestic grain shipments. This reduced grain handlers’ freight costs by about $6 a tonne, making overall rail freight costs competitive with road freight costs, and resulted in GrainCorp contracting to keep this freight on rail.

In February 2008 the Government announced a $20 million Rail Freight Support package that extended the access charges rebate to export grain, and made rebates available to export container terminal operators who continue to use rail for freight to port.

The review identified a number of priorities and levels of investment to upgrade Victoria’s rail freight network. The Government will invest $42.7 million, including $23.7 million to enable the upgrade works to start progressively on the priority Gold lines. This means the most important lines will be upgraded in priority order to ensure they continue to provide a competitive transport alternative and are capable of carrying the harvest when better seasons return. A further $19 million will be allocated for maintenance works on the freight network over the next 12 months.

7.2 Channel Deepening in Port Phillip Bay

The Channel Deepening project is part of a broader freight strategy of the Victorian Government. The economic benefits of channel deepening have a direct effect on Victoria’s farmers. On average $90 million worth of exports leave the Port of Melbourne every day. The project will result in better economies of scale in shipping, ultimately leading to reduced costs for farmers in exporting Victorian goods overseas.

Exports will improve after completion of the project and the long-term effect of this will be great economic benefit to rural and regional Victoria. Significantly, regional Victorian GDP is expected to be boosted by $50 million between 2010 and 2020 as savings are felt throughout the supply chain.

Economic studies suggest the channel deepening project will create 1,107 jobs, with a flow-on of 905 jobs, in Victoria. The total economic impact of the Channel Deepening project on regional Victoria is estimated at $248.8 million.

The Port of Melbourne commenced the Channel Deepening project in February this year; it is expected to be completed by the end of 2009.

What we’re already doing

The Victorian Government has a strong record of investment in infrastructure to support the farm sector and regional industries to access new markets, including:

• significantly improving the State’s road and rail network, with $13 billion in investment in infrastructure projects since 2000 including upgrading the main regional links from Melbourne as part of the regional fast rail project
• investing $133 million to buy back the rail freight network; $25 million for priority maintenance and upgrades; and, in conjunction with the Commonwealth, $73 million to upgrade the Mildura rail line
• providing a $20 million short-term support package for Victoria’s rail freight industry to support export container and grain freight terminal operators to keep freight on rail while infrastructure is upgraded and industry restructured
• delivering improved rail access to the Ports of Melbourne and Geelong
• providing more than $380 million through the Regional Infrastructure Development Fund for critical economic and industry infrastructure in regional Victoria
• implementation of the Victorian Ports Strategic Framework to guide future development of Victoria’s four commercial trading ports: Melbourne, Hastings, Geelong, and Portland, including the Channel Deepening project for the Port of Melbourne
• progressing through VicRoads the uniform national regulations for the transport of hay and straw by truck through the National Transport Commision (NTC) – and working through VicRoads with NTC to develop a national fodder transport policy to free farmers from unnecessary restrictions on the dimensions for carrying hay and straw.

Summary of Funded Actions

Action 1: Boosting productivity through technology and changes in farming practices
Major new investment in research, development and practice change	$77 million over four years
State-of-the-art services to farm businesses	$8 million over four years
Changing irrigation practices	$2.3 million over two years
Precision farming through GPS technology	$1.47 million over three years + $3.4 million from the RIDF fund
High productivity in the dairy industry	$8.57 million over four years
Stakeholder engagement, implementation and evaluation	$2.71 million over five years
	$103.45 million
Action 2: Building skills and attracting young people to farming
Strengthen primary industry skills	$0.308 million
	$0.308 million*
Action 3: Understanding and managing climate change
Planning for climate change	$5.2 million over four years
New technologies and strategies	$6.22 million over four years
	$11.42 million
Action 4: Strengthening land and water management
New action on weeds and pests	$20 million over four years
Improving rural land-use planning	$3.79 million over four years
	$23.79 million
Action 5: Helping farming families to secure their futures
Working with rural communities	$3.74 million over four years
Farm family health	$2.18 million over four years
Case management for farmers	$3.46 million over four years
New National Centre for Farmer Health	$2.4 million over four years
	$11.78 million
Action 6: Developing new products and securing new markets
Better market access and supply chain development	$2.93 million over four years
Support for organics	$1.08 million over three years
Support for aquaculture industry	$4.05 million over four years
Support for the grapevine industry	$3.0 million over four years
	$11.06 million
Action 7: Transporting products to market
Regional rail review	$42.7 million
	$42.7 million
Total: $204.51 million
* New school and TAFE funding will be outlined in the 2008-09 Budget.

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Published by the Department of Primary Industries, Marketing & Communications Branch. April 2008

© The State of Victoria, 2008

This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

Authorised by the Victorian Government, 1 Spring Street, Melbourne, Victoria 3000, Australia

ISBN 978-1-74199-888-7 (print)

ISBN 978-1-74199-889-4 (PDF)

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For more information about DPI visit www.dpi.vic.gov.au or call the Customer Service Centre on 136 186