Tax incentives White Paper focus

The competition watchdog is to get a "flying squad" to investigate farmers' complaints about supermarket giants such as Coles and Woolworths allegedly bullying producers.

The new "farm-savvy" Australian Competition and Consumer Commission commissioner is one of the key features of the long-delayed Agriculture White Paper, unveiled by Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce on Saturday.

The White Paper contains $1.2 billion of spending over the next four years, comprising $730 million in new measures and $500 million for building dams, including an extension of the Ord irrigation scheme.

It also provides for drought concessional loans of up to $250 million a year, for 11 years, at a total cost of $2.5 billion.

The White Paper has a big focus on improving tax incentives for farmers. From July 1 next year, farmers will be able to use their farm management deposits as a business loan offset, reducing interest costs by about $150 million a year.

Farmers will also have their maximum FMDs doubled to $800,000, especially welcomed by WA wheat growers with inconsistent rainfall.

And to give farmers more predictability over their financial affairs, they will be able to opt back in to income tax averaging from next year.

Bolstering ACCC oversight of the agricultural sector will cost $11.4 million, with fair trading and strengthened competition in supply chains to be the new commissioner's mandate.

A two-year pilot program to encourage farmers starting up new co-operatives will receive $13.8 million.

With a view to protecting Australia's prized biosecurity status for premium markets in Asia and Europe, an extra $200 million will be spent on surveillance and analysis and $31 million on technical barriers and five new overseas "agriculture counsellors".

Food export labelling will be tightened under a $12 million plan to enhance Australia's food safety credentials, building on the improved country-of-origin labelling regime.

WAFarmers president Dale Park said the White Paper initiatives focused on building a stronger business environment, research and development, drought and risk management, infrastructure and trade and market access.

"If we're going to double the value of agriculture in the next 10 years, we need to have these initiatives and policies in place, so the White Paper is a good start," he said.

Mr Park said it was encouraging to see some of the recommendations made by WAFarmers incorporated in the White Paper, including changes to the FMD scheme.

But the Pastoralists and Graziers Association called the White Paper a disappointment and lost opportunity.

President Tony Seabrook said he welcomed the increase in FMDs but other than that there was little for WA's farmers.

"There was a real opportunity to recognise the very different environment of Australian farming," he said.

"Our country's farmers find themselves competing against very low cost of production from the Black Sea, Brazil and India and fiddling around the edges won't help with this fundamental reality."

Williams farmer Jamie Fowler welcomed the doubling of the FMD maximum deposit limit, which he said allowed farmers to put aside funds in good times to cover low- income years.

Mr Fowler, who applies FMDs to his own program, said these were a useful tool for farmers.

He said farmers with larger FMD accounts would be likely to benefit from a better relationship with banks, which treated those with added security more favourably.

Also announced was that, with the co-operation of banks, farmers could use their FMDs to reduce the interest they pay on business debt.

"This ability to offset will help to reduce the interest farmers pay on business debt, ultimately improving our net cash positions," Mr Fowler said.

_AT A GLANCE _

·$730 million in new measures, over four years.

·$500 million for building dams, over four years.

·$2.5 billion in concessional loans, over 11 years.

·$150 million interest saving offsetting farm management deposits.

·FMD limit increased from $400,000 to $800,000 a year.

·$11.4 million increase in ACCC agricultural sector fair trading and competition oversight.

·$13.8 million co-operatives pilot program.

·$200 million on overseas biosecurity and analysis.

·$31 million on new overseas agricultural councillors.

·$12 million on tightening export food labelling, with improved country-of-origin regime.