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Boosting Farm Productivity

I spoke last night on a bill that will see Australia re-engage with the International Fund for Agricultural Development, and started my speech by telling the story of when I used to go along as a high school student in the 1980s to talk international development with my local MP, member for Berowra Phillip Ruddock.

International Fund for Agricultural Development Amendment Bill, 5 February 2013

It is a particular pleasure to follow the member for Berowra in this debate on the International Fund for Agricultural Development Amendment Bill 2012. My first-ever engagement with a federal parliamentarian was when I was a young volunteer for an organisation called Community Aid Abroad, now part of Oxfam. Community Aid Abroad invited us to visit our federal member of parliament, to speak about the importance of foreign aid and why it should be increased. I suspect I was to the left of the member for Berowra even as a whippersnapper but I do remember him being very good to me, giving me at least half an hour of his time, listening through what I am sure were not particularly well-informed comments about foreign aid and providing some genteel responses about his views on the issue. Those meetings do occasionally come back to me now is a federal member of parliament, thinking about the importance of giving time to somebody who has passionate feelings about an issue even if one might know more about that issue than they do. I use this opportunity to thank the member for Berowra, some two decades late, for his generosity in that regard. It made a mark and it continues to shape my dealings with my constituents.

Mr Ruddock:  Can I interject and say thank you very much.

Dr LEIGH:  The interjection is greatly appreciated. The topic before the House today is foreign aid and global poverty. As Robert Lucas famously said, once one starts to think about the human welfare involved in these great issues, ‘it is hard to think about anything else’. I think it is important in this place that we do not just speak about the quantum of aid, important as that discussion is, and I am pleased to be part of a government which is increasing our overseas development assistance ratio to GNI to 0.5 per cent by 2016-17, but that we also talk about what that aid can do. We are in a world in which the statistics on poverty are staggering, where 1.4 billion people living in poverty and two-thirds of those are in our region. Every day 22,000 children under the age of five die from preventable diseases. Millions live in makeshift camps and gangs in Africa perform acts which are more abhorrent than anything a Hollywood movie producer could dream up.

Australia’s aid does make a difference. To take one year’s example, in a single year the Australian foreign aid program built 2,000 schools in India, funded a women’s crisis centre in Fiji, prevented 8,000 cases of blindness in East Asia and provide clean water to 1.2 million people in Southern Africa. World Vision CEO Tim Costello claimed that the Australian aid budget in a typical year saves around 200,000 lives. So we can make a difference. Australia may be a country which contributes only a couple of per cent to the world’s economy but what we do does make a difference.

In my view the Australian aid program should be shaped by the principles of comparative advantage, by thinking about what it is that our aid program can do better than other countries’ aid programs. There are three areas in which our country’s development assistance program has a comparative advantage over those of other countries. The first is in resource extraction. We are one of the few developed countries in the world with high mineral wealth and have useful lessons to teach developing countries about the effective extraction of those resources in a way which enriches the whole population.

Our second comparative advantage is in dealing with fragile states. The region in which we live has a large number of fragile states. I think the Australian experiences in East Timor and the Solomon Islands stand in stark contrast to other attempts around the world to intervene in fragile states. That is also an important comparative advantage of the Australian aid program. The third comparative advantage is in dry land farming. Australia’s experiences with dry land farming are important for other countries. Our farmers have more experience in good water management, in the selection of hardy crops and animals and the management of seed stocks in environments in which rainfall is volatile. We convey some of that information through the Australian Centre for International Agricultural Research, through involvement in the World Food Program, the G20′s Committee on World Food Security, and our involvement and re-engagement with the International Fund for Agricultural Development is, I think, another way in which Australia’s expertise in dry land farming can be conveyed to developing countries.

There is great possibility for bringing millions of people out of poverty through improving agricultural productivity. The 1960s and 1970s saw a green revolution in which the combination of hybrid seeds, chemical fertilisers, pesticides and herbicides massively raised agricultural output. By one estimate, the green revolution saved a billion people from starvation. Yet today, when Africa should be a net food exporter, it has become a net food importer. African cereal yields are 66 per cent below the global average. Africa is a continent that has one tractor for every 868 hectares, compared with the global average of one tractor for every 56 hectares. So Africa is a place with fewer farm machines than it should have.

There have been some successes. Malawi’s agricultural output has increased substantially. We ought also to think about innovative financing models. The economist Ted Miguel has argued that aid agencies should work with developing country governments to provide drought insurance to rural households, allowing them to deal with the volatility that will inevitably come from climate change. There are climate models that predict increased rainfall volatility in Africa’s Sahel, the part of the world containing Chad and Niger, where average incomes are less than $1 a day and where people just do not have the financial resources to deal with climate shocks.

Australia has traditionally played a role in liberalising barriers to agricultural trade. It was the Hawke government that set up the Cairns Group of agricultural free-trading nations in 1986, bringing together developed and developing country agricultural exporters in order to bring down the tariffs that stood in the way of agricultural products. There is an international deal to be done in which the United States abolishes its ethanol subsidies and the European Union takes a more science based approach to genetically modified foodstuffs. Those two changes would bring enormous benefits to developing countries which are agricultural exporters.

The member for Wakefield detailed well why Australia has chosen at this point to re-engage with the International Fund for Agricultural Development. We understand that Australia’s withdrawal from the fund in 2004 was based on the sense that IFAD was not delivering cost-effective and tangible returns and that it did not have a clear mandate or role. But our view is that IFAD has improved and that there is a strong business case for Australia to rejoin IFAD. Another important reason is that it is to our comparative advantage to do so. If Australia is to be a country that focuses our aid program on the things we do better than other donors then we ought to be involved more in resource management, more in fragile states and more in dryland farming. So it makes sense to re-engage with IFAD.

In closing, I encourage AusAID officials in their dealings with IFAD to urge it to carry out the most rigorous possible evaluations. The randomised trials revolution, which has swept the world of development economics, has its origins in agriculture. Randomised evaluations are known as ‘field experiments’ because it was in agriculture that they were first tried. Australian farmers since the 19th century have been setting aside two plots of similar soils, trying different seed varieties or a different fertiliser mix and seeing which performs better. But we can do that with our policies too. We can do that with policies that help countries deal with drought assistance, with smarter ways of providing information to farmers and with more effective strategies for seed management. All of these things should be rigorously evaluated, because if we had all the answers to world development we would not have over a billion people in poverty today. I commend the bill to the House and commend Australia’s re-engagement with an important organisation to help us take our dryland farming expertise to the world.

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