The Hon. Dr Mike Kelly's Opening Address of Day 2 of Abares Outlook 2011 Conference - Part 2

I was just in Israel recently and it is remarkable to see the different culture of verture capital and risk taking including in their agricultural sector. This is a country of only 7 million people but it has a pool of $16 billion in venture capital. And they invest in and support their risk takers even if those who get out there and have a go and fail. They are more than happy to get in behind them for their further attemps as people that obviously are prepared to have the courage to take those risks. And it pays off. For every dollar invested in research and development in over a 5 year period you can see a $5 return. Over a 10 year period say $25 return. So it proves to be an effective way of improving your business and looking at what they are doing in agricultural in Israel has a lot of important carry over lessons for us here in this country, and the challenges that we face. So research and development is critical and I would like to see how we can encourage more private investment in that respect. And 1 aspect of this that is very important, and it over laps wit our climate change challenge and the agricultural sector, is the issue of bio-fuels. And I have responsibility for that within the Agricultural Fisheries, Forestry Portfolio and I'm very happy about that. Because there are a number of resons why we need to tackle this, and it's not just climate change, transport fuel use is about 17% of our carbon emissions and on top of that we face a major strategic vulnerability through oil. We are seeing now the disruptions in the Middle East and what it does to world prices. But not withstanding that, there is only 1 way that oil prices will go as the suppliers of oil dwindle. We have already reached a peek oil, have a lot of discussion over this and argument, but reached that status in our country. We are 80% self sufficient in all of production right now, but within 15-20 years or so that will completely flip over and we will be 80% dependent on overseas suppliers depending on discovery of any new sources. But that can only go 1 direction ultimately. Which means of course that will add $20 billion to have balance a payment equation as it stands now. But also we will be at the mercy of groups such as OPEC who have been not afraid in the past to use oil as a political weapon, but in addition to that, when I was in defense and I had the Middle East desk, I did track large sums of money that were coming from unhealthy sources in the Middle East, oil wealth for instance, that was funding radical madrassa and terrorist movements and what not in our region. So from a number of different perspectives tackling this issue is critically important. And there are some exciting things going on out there in the bio-fuels area. But 1 thing we have to beware of of course that we don't wish to challenge food security in doing that. So the Government's priority is not to invest in or research bio-fuel options that would challenge security in arable land. My personal interest is in the arable fuel potential because you can use arable land and saline water for achieving the harvests that we need to replace oil in our transport sector. And when I was in Israel it was very exciting to visit a project at Ashcalon which is large scale power generation facility on the same scale that we have here in Australia, something like 1200 mega watts. And what they were doing was harvesting the carbon emissions from that power plant to flew into an arable pond, which greatly accelerated the growth of the algae. And they were then producing bio-diesel from this and this diesel product can go straight into a standard engine with no blending or conversion of modification. This has huge potential to help us abate our power emissions as well as producing a good source of low emission fuels. CSIRO I think, Tom Berry estimated that we can actually replace our entire transport fuels needs by the equivalent of a 100k by 100k algae pond. Now clearly you wouldn't have 1 of those, but if you had a distributor network of those we would be in a good position to acheive. So I think we will properly see a mix of solutions down the track but we need to take this very seriously for the point of view of the economic and security future of the country. But it also offers great opportunities for jobs and diversified economies in the rural and regional sector. I have certainly had a lot of interesting companies coming into my own electric to set up algae pond bio-diesel facilities without being attached to the power stations. But there is some of this work going on this country and we are certainly investing $20 million into bio-fuels research and we are doing a lot of policy work on how to set up the right brainworks to encourage this research and the market ability. The key now is to move to the industrial level of application of this the technology and the techniques are there but commercializing industrializing this will be the next step. I'd like to just also briefly talk about the other key love of my portfolio, which is Fisheries. Fisheries is a real challenge we know that it's not possible to expand the industry in the wild sector. That has a natural limit to it. And everyone I think except and understands that. But we have a very good industry in this country that is worlds best practice in many ways. We have certainly halved the rates of over fishing classification in the industry to below 12% now. And's its going well. But as I say there is a limit to it and seafood is an important source of healthy protein and for a hungry world the potential is there for us to develop a significant agricultural industry beyond what we already have. All together now seafood and agriculture contributes about $2 billion to the economy employs about 16,000 people but we can get a lot more out of this. We have massive untapped potential in this country in agriculture and it's great to see the work that the FRDC is doing in this respect but we also need to I think increasingly look to encourage private investment in that area and facilitate research. There's some exciting research going on, I recently visited the clean seas facility in South Australia where they are looking to trying to crack the nut on Southern Blue Fin Tuna Agriculture. That obviously has massive value potential if they can close the loop there. So agriculture is going to be massively important for the future of the world. Future this country has a potential industry there of multiple billons of dollars. We also understand of course there is a challenge in terms of work force in the agriculture sector and it was wonderful to see the kids at the Haywire gathering the other day that we both at and some wonderful kids out there that are starting to see the exciting potential that new technologies and techniques and having open minds about employing and thats what we really need now is to think outside the box. I know my own area, my own family, traditional farming sometimes hold you back. If this is the way Dad and Grandad did it. you are a a bit slow sometimes to pick things up. But in other newer farming areas like Carnavon Base, and we are seeing a rapid pick up of new technology. We must excellerate that. We must take advantage of these wet times to allow us to invest in these on and off farming infrastructure changes and new technologies. And you see companies like Nedaphene Israeli Irrigation Company with great technologies in drip and sub-surface irrigation that haven't really been picked up as much as they should of been in this country recently. Visited an almond farm in South Australia. You know permant plantings like that lower into the murray obviously ideal for drip and sub-surface irrigation. Why the hell isn't it being picked up and when I talked to them about you know there was all sorts of skepticism, the lines would get blocked, wouldn't work etc. But it does work and we need it. And we have to start networking our farms effectively. They need to start talking to eachother about these things because farmers talking to farmers is the best way to get these things picked up. And so I am hoping for example that with the role out of the National Broadband Network and reinvigorating the land care structure we can restructure we can improve the networking amongst out farming community to really accelerate the pick of these things. So it's a challenging future for us out there but an exciting one as well. I'm really proud and pleased on behalf of my own region and behalf of farmers to be out there are trying to improve that situation for them. Obviously the risk management needs a lot of policy work as well and how we manage the risks of that we have seen developing in crops, a lot of people forward selling crops etc As well as losing them we now have to work out I think a better way to even out that risk. So we will keep working on that. And I very much look forward to seeing a product of your thinking it's so critical to have your minds working together on these subjects. And it's important for not only the country and the world. But can I just finish by saying one thing, we have seen this discussion during this week in relation to our carbon initiative our climate change policy. And everybody should be absolutely clear about this. That this Government and every member of that Caucus, are absolutely determined to fight this battle. There is complete steal in every spine in that Caucus to take this on and to make it work and to do it this term. Time for stuffing around on this is over. People need to work with us to make it a good system. The offer was there for us to have a multiparty approach to this. There is no choice but to get it done. And we are absolutely determined to do it. For the sake of this country and the future of this planet it has to be done. So we need to work together, constructive criticism is fine but it is not an option to put this off any more. And we wil not put it off any more. Thank you very much. (clapping) Dr. Mike Kelly, thankyou very much Dr. Kelly has got to go off to another appointment so we can't field any questions but certainly steely resolved at the end of the Parliamentary Secretary's speech this morning and leaving us I think in no doubt about the direction the Government is determined to take. A very interesting session. Now the next 1 in this room in 15 minutes time is of course on that very subject "Climate Change" And Professor. Ross Garnaut and a range other distinct speakers involved with that. That gets underway in 15 minutes Good morning and enjoy the rest of the day at ABARES (end session)