Drought: the rising dust-cloud of dumb

Is there any area of public policy in Australia that gets weaker treatment than agriculture these days? Whether it’s milk prices or agricultural investment, the normal Australian tough-mindedness about policy gets shunted aside in favour of emotive puffery. Not too many people want to be tough-minded when it comes to our farmers – not nearly as tough-minded, anyway, as they were when they were taking the subsidies away from the TCF industries employing migrant women in Melbourne in the 1980s.

Now I can think of a few reasons for this.

  • Lack of adaptability: People who have lived on a farm all their lives will find it really hard to do anything else. They may be tough but they’re really not that adaptable that they could just move into town and settle down running a milk bar. And no-one wants to shove them off the farm just because they can’t make a go of it.
  • Effort: Farmers are actually working extremely hard, which to most people (me included) makes them more deserving than some.
  • Nostalgia: Clem Smith, Manangatang farmer, has a higher and longer-established place in our national mythos than Vera Dimopoulos, Coburg house cleaner and former seamstress.
  • Distance: Most of us live a long way from farming communities, so we are free to breathe in the myth of farming without observing the less pleasant realities.
  • Our emotional relationship to food: The food issue somehow trigger things in our psyche that make us more amenable to bad policy solutions.

So as we prepare to read the coverage of the latest drought relief announcement, here are a few ideas on drought relief and farm policy that seem in danger of getting lost in the dust:

  • Farming is a small part of the national economy, and getting smaller. (The NFF itself says that the agricultural sector, at farm-gate, contributes three per cent to Australia’s total gross domestic product.) That doesn’t mean it’s unimportant – three per cent is still a lot – but it does mean we are not deciding the future of national GDP when we talk about farms. This is probably one reason we put up with bad agricultural policy: as a sort of policy luxury good, it costs us relatively less than it used to.
  • We export much, much more food than we import. Indeed, we have one of the ten largest food production surpluses in the world, and that’s not likely to change anytime soon. The ratio of exports to imports is about 2.4 to 1. According to the Federal Department of Agriculture, “In 2009-10, Australia exported $24.3 billion worth of food compared to food imports of $10.1 billion. A substantial proportion of these food imports comprised highly processed foods not produced in Australia, speciality branded spirits, seafood and processed fruit and vegetables.” In the incredibly unlikely event that we ever have to endure a food blockade of Australia, there will be a serious shortage of truffles and French champagne, but we will not starve.
  • Plenty of farmers survive drought; we are in no danger of running out of Australian food producers, despite the seemingly endless stream of claims about how latte-sipping socialists will have to go cold turkey if we don’t give the farm lobby everything it wants. When we talk about drought-stricken farmers, we’re talking about farmers at the margin – the ones closest to going out of business. Their distress is real and important, but their problems are not going to change the shape of the national economy.
  • Struggling small farmers are struggling small businesses, with generally the same financial issues as other small business. At any point in time, some of them will have made bad choices of industry and location and product and many other things, simply because they are like small businesses of all sorts and run by people whose judgement is not always perfect. The difference is that other struggling small business owners expect to go out of business if they make these choices. In the world of farm policy, there is an expectation that some subset of struggling small businesses will be rescued.
  • In part because the point above is so obvious, much of the current government rhetoric around drought is now suddenly directed to painting it as a special event that no-one could have foreseen. Tony Abbott and Barnaby Joyce have been repeating “natural disaster” endlessly. But drought is normal in Australia. Check this website for up-to-the-minute info. More than 20 years ago, as a result of a lot of work by Hawke government ministers like John Kerin and Peter Walsh – people who understood farming and good policy – national policy was changed to exclude drought from the category of “national disaster”. Now it’s creeping back, in a sort of rising dust-cloud of dumb.
  • Climate change means there will likely be more drought. Never mind what caused the change; many Australian dryland farming areas are getting hotter and drier and conditions more volatile.
  • Many farmers themselves are well aware of most of this. But they’re mostly too good-natured to say it in the pub in earshot of their broke mates. A few did speak to the Productivity Commission’s inquiry into drought support back in 2008, though. It’s worth reading page 168 of the PC’s report, which lists farmers talking on both sides of the issue. Under the heading “Farmers not in favour of drought assistance”:

“The same producers are queuing every time assistance is offered which proves there is no adapting to seasonal variability. … Those of us who have embraced new technology and diversification are excluded from assistance as [we] are self-sufficient. (G. Schmidt)”

“It is disconcerting to see a number of ‘inefficient’ graziers … receiving drought assistance when they have done little to plan and manage the risks of drought … (J. Cooper)”

“… the current exceptional circumstances assistance system does not encourage the efficient operation of farm businesses through economies of scale, in fact they encourage the opposite. (L. Mann)”

“Efficient farmers who save and invest off farm are penalised, whilst farmers who waste money [and] spend everything get more help. (H. Clark)”

“A farmer who has diversified risk, managed borrowings conservatively, kept operating costs low and planned a financially secure retirement is less likely to qualify … (P. Wallace)”

  • A small subset of farmers continually claims that the problem is returns. You might as well say that Holden’s problem is that it can’t charge $200,000 for base-level Commodores. It’s kind of true, and at the same completely wrong. There is no “right” level of farm prices, any more than there is a “right” price for a Commodore.
  • Farmers have been told for decades that they need to get big or get out. As that curmudgeonly rural realist Peter Walsh once pointed out, the problem is that when farmers hear that, almost none of them choose to get out. Instead they borrow and bid up farmland prices, trying to get big. A few years later conditions turn bad, or prices drop, or interest rates rise – it only takes one of those three – and the ones who took the silliest risks find themselves worse off than ever.

Now, if after all this, you still want to support struggling farmers with special assistance, here’s the thing: there are good ways and bad ways to do it. And among the very worst ways is a concessional loans scheme. That’s a scheme to help drought-stricken farmers get even deeper in debt. Do this, and you’re enabling their problem. Indeed, my bet is that within the decade we will see troubled farmers complaining that with this scheme, the government was encouraging them to take on more debt.

Note that this is bipartisan buffoonery: Labor set up such a concessional loans scheme last year; today’s announcement just makes it bigger and worse.

The Abbott government had the guts to turn off the drip-feed to the auto industry when it had demonstrated beyond doubt that it could not make itself long-term competitive. They deserve credit for that decision. But put today’s package together with the Graincorp decision and it becomes clear that agricultural policy is going to be a mess for … well, at least as long as Barnaby Joyce is in Cabinet, and probably longer.

One of the outstanding features of agricultural policy is the ritualistic repetition of the claim that agriculture is special and extraordinary. It’s not. It’s just specially and extraordinarily badly-analysed.

Update: I was impressed to hear the ABC’s World Today program interviewing Professor Linda Botterill on the dangers of concessional loans scheme. Botterrill and her colleague Bruce Chapman point out that if you want to support farmers, a better alternative to concessional loans is income-contingent loans that get paid back when the farmer has cash – a sort of HECS scheme for farmers. Australia pioneered income-contingent loan schemes in the 1980s, so putting one in place in the farm sector seems somehow fitting.

Update 2: The Botterrill interview sent me looking for Botterill and Chapman’s submission to the Productivity Commission inquiry. It’s excellent on several points, including our lack of understanding of rural poverty.

Update 3: I rewrote the top of the article and added a couple of sentences elsewhere. Sorry, but I keep thinking about this stuff after I stop writing.

About David Walker

David Walker runs publishing consultancy Shorewalker DMS (shorewalker.net) and is an editor and writer for hire. David has previously edited Acuity magazine and the award-winning INTHEBLACK business magazine, been chief operating officer of online publisher WorkDay Media, held policy and communications roles at the Committee for Economic Development of Australia and the Business Council of Australia and run the website for online finance start-up eChoice. He has written on economics, business and public policy from Melbourne, Adelaide and the Canberra Press Gallery.
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52 Responses to Drought: the rising dust-cloud of dumb

  1. Steve says:

    When reading shot from the hip stuff such as the above, one often wishes that Australian farmers would cut off supply of food. A few weeks would do it.

    One of the unique features of Australia; it is the only liberal democracy that persecutes its farmers.
    Australian farmers receive the least (if any) assistance of all farmers in the western world.
    Australian farmers are also the most efficient in the world. That is, they produce more food per farmer than any other country on earth.

    They deserver their place in national mythology. They’ve earned it.

  2. David Walker says:

    Steve, I hadn’t previously been made aware of the farmer persecution policy. Can you explain a bit further what it is, exactly? I’m kind of sceptical about this claim, and it’s one of the things getting in the way of me taking your other claims seriously.

  3. Tel says:

    Barnaby Joyce is, I admit, a bit of an agrarian socialist. He is smart on matters of debt because he has years of experience and very much understands the balance of investment vs returns. I don’t think he is quite as unattached when it comes to subsidies.

    However the Graincorp issue was not a matter of subsidies, it was a matter of who should own it, and by implication who should manage it and how prices should be set. In the case of Graincorp I wasn’t personally against allowing foreign ownership, but to allow foreign capital to grab national assets is not a simple decision by any means. If it’s likely that the foreign owners will simply milk rent out of the asset without investment then might as well leave it in the hands of Australians. The Howard government is carefully picking its political battles, and in the bigger scheme of things Democracy is always right (until we go back to Feudalism).

    Getting to the farmers and drought, take a look at the long term rainfall charts for any of the Eastern states. The year-on-year variation is huge, but the trend is close to flat. Do the same with some of the long running met stations… compare the 30 year mean against the 100 year mean rainfall.

    So how to handle year-on-year variability? Hmmm, how about water storage?

    But there’s a problem if any farmer wants to build a dam… getting permission is almost impossible. In the wet years we get excellent outflows into the ocean, and in the dry years we get a rising dust cloud of dumb. Water storage. There’s your answer.

    Is that a “get big or get out” problem? No, it’s a regulatory problem.

    Is that a problem related to debt and investment? No, agricultural dams are cheap to build.

    • David Walker says:

      Tel, to the extent that my “hotter and drier” reference addressed history, it was directed to the past 40 years. I wasn’t trying to be controversial; I simply didn’t think this was a very highly contested remark. The BOM website has the data; I’ve added a link in the text.

      The PC noted in the 2009 report that “the meteorological evidence is that the geographic extent and frequency of exceptionally hot years has been increasing rapidly over recent decades”, and suggests that for the bulk of the country, best projections are for higher temperatures, more low-rainfall years and continued variability (though the PC doesn’t refer to increased variability, and the rainfall projections are pretty uncertain).

      All these statements about the climate future are predictions, and they could all be wrong.

    • Mel says:

      But there’s a problem if any farmer wants to build a dam… getting permission is almost impossible. In the wet years we get excellent outflows into the ocean, and in the dry years we get a rising dust cloud of dumb. Water storage. There’s your answer.

      Lol. You must live in the city. This is simplistic and wrong and so many levels that I can’t outline them all. Large dams of the type that would supposedly make any difference in drought years are incredibly expensive because of the engineering standards they must meet and the high evaporation rates over most of Australia make them not even remotely economic propositions. They also rob water from neighbouring properties and from irrigation and town water reservoirs.

      No amount of extra dams in my 600mm rainfall zone in Central Victoria would improve farm viability. Slowing the flow of water would help (as per Peter Andrews), but not dams.

      The fresh water that leaves rivers is also needed for estuarine ecology etc.. It isn’t “dead water”.

    • Ken Parish says:

      It appears to be true that there is no long-term trend of either increasing or decreasing rainfall across south-eastern Australia. See for example this report. However there is certainly increasing frequency of extreme weather events and that is expected to increase as time goes on. More importantly, temperatures have increased markedly over the last 40 years across the drought-affected areas of New South Wales and Queensland. In fact they have increased by a massive 1.2-1.6°C in that period. See this map. You will appreciate that this magnitude of increase in average temperature unavoidably means much higher levels of evaporation and much lower levels of vegetation cover than was the case 40 years ago. Consequently, clearly there will now be many areas that have become marginal or non-viable for farming activity.

      As for the claim that there is lots of run-off water to the ocean in good years and that therefore the whole problem could be fixed by building lots of dams, that may well be true of farming land on coastal rivers. However those are not the drought-affected areas. The drought-affected areas of New South Wales and Queensland are overwhelmingly inland areas whose rivers drain into either the Murray-Darling system or Coopers Creek etc and ultimately into Lake Eyre. I am not aware that the latter system has ever drained to the ocean even in good years, and no sensible commentator would suggest that it is a great idea to build large dams anywhere on the Murray-Darling system. Governments have only just recently managed to conclude a workable agreement that might eventually see minimum sustainable environmental flows restored to that system after many years of over-allocation of water rights.

      I can’t help observing that Tel’s libertarianism appears to be highly selective.

      • David Walker says:

        Ken, working from memory, the rainfall projections for eastern Queensland, in particular, are markedly different from those for the south-east (i.e. through to northern NSW) and south-west. Eastern Queensland is odds-on to get more rain. The south-east and south-west are odds-on to get less, though with a high degree of uncertainty. Even if rainfall in the south-east doesn’t change, though, evaporation will ensure the soil is drier.

        • Julie Thomas says:

          Maybe farmers are getting a bit smarter. I read this in the weekly newsletter for our rural area of south west Queensland where the patchy rainfall and the evaporation rates are being noticed and remarked upon.

          One local farmer was quoted as saying thusly;

          “There were times where we wouldn’t get out into the field until about 11 because it would be so wet, but now its dry as a bone.
          “Is global warming or climate change actually happening?
          “It is enough to nearly make you believe it.”

          What does that word ‘nearly’ signify? Somebody who knows the farmers better than I do said it is significant and akin to an admission that they are now willing to listen.

      • csning says:

        That’s exactly what I thought. How in the world is this different from car manufacturing? They’re trade exposed, meaning how well they do is highly dependant on the dollar, which is highly variable too.

      • Phil says:

        I believe that the South west bit of WA has suffered ~30% (not sure of the exact number) decline in rainfall. Not sure if it was a CSIRO or met BoM report

    • derrida derider says:

      I’m deeply unconvinced, Tel, that it is the greenies who are preventing farmers from storing their water. Big dams aint cheap (ie they mean big taxpayer subsidies) and small ones don’t droughtproof anything, though having lots of them tends to distinctly UNdroughtproof all downstream properties. Perhaps that last, rather than socialist bureaucrats in alliance with anarchist Greens, is the reason for those pesky regulations?

      On the broader question of how easy farmers find it to dip their hands into taxpayers’ pockets while loudly proclaiming their rugged selfreliance and unique moral worth, I would note that it is far from a uniquely Australian phenomenon. Take a look around the world.

      • Tel says:

        http://www.abc.net.au/7.30/content/2003/s767315.htm

        A small group of farmers is taking the Victorian Government to court, challenging recent law changes that prevent farmers from building new dams for irrigation without getting a licence and paying for the water.

      • Tel says:

        http://www.adelaidenow.com.au/news/farm-anger-at-dam-water-charges/story-e6frea6u-1226134324554

        WATER authorities will press ahead with plans to charge Adelaide Hills farmers for using water from their dams.

        An updated plan to be released today will call for dams and bores used for commercial purposes in the western Mt Lofty Ranges to be metered.

        Furious farmers fear the move will open the way to more costly regulation. The plan requires 2144 existing users to obtain water licences for dams and bores, but South Australian Farmers Federation chairman Peter White says this is just the beginning.

        • derrida derider says:

          What on earth is your point Tel? Those farmers are taking other farmers’ water (see my comment about the downstream effects of small dams, and artesian water is an even more rationed resource). Of course they should pay for it; selling property rights to a limited resource is the classic LIBERTARIAN way to make sure the resource goes to its most valued use.

  4. Phil says:

    I grew up in country Victoria in a small farming community. While we were not farmers (dad was a motor mechanic/general engineer) you could always pick who were the “good” farmers, by this I mean which ones had business sense. They were the ones who continued to improve their business and property whether it was a good season or in drought. I don’t have a lot of sympathy for poor business practices and failure to make allowances for the future. But this action is typical of the agrarian socialists that form the national party.

  5. I used to be not trampis says:

    you beat me to it so I have linked your article and Harry Clarke’s on my site.

    good article by the way.

  6. Mel says:

    I’ll try a counter-argument to the OP.

    From memory, the farm sector of western industrialised economies traditionally has the lowest profit margin of all sectors of the economy (the finance sector has the highest profit margin). The low profit margins, the cruel and erratic nature of the Australian climate and occasional high Australian dollar can conspire to sink even well run farm businesses. Maybe it makes sense to keep good farms in business with some minimal assistance through tough times rather than letting them go to the wall. Maybe it is a terrible waste of skill and experience- a misallocation of resources- when good farmers end up on the dole, in early retirement or doing menial unskilled work.

    Moreover, keeping Fred, Wilma and their three kids on the farm might save tax dollars over the medium to long term compared to the alternative of Fred and Wilma moving into town, and potentially experiencing precarious low wage employment, family breakdown and social dysfunction. It would be interesting to see studies of what happens to farming families after the farm fails. Maybe I’m being excessively bleak.

    • David Walker says:

      The OP actually has a fair bit of sympathy for this view, which leads you down the path to re-engineering the welfare system to do better at supporting people who are working hard and creating a bit of value, even if they’re not very good at running a business. Down this path lies Milton Friedman’s negative income tax, but possibly also other solutions.

      Mel, the OP also thinks you’re being quite appropriately bleak about post-farm farming families in general (although I have relatives who did alright post-farm) and they need more support. Botterill and Chapman make the point that rural poverty in Australia is not well-understood.

      Handouts for drought may be bad policy, but well-constructed welfare measures for farmers should be welcome. We do have one or two already.

  7. derrida derider says:

    the farm sector of western industrialised economies traditionally has the lowest profit margin of all sectors of the economy

    Translation: “the farm sector has the most inflated asset prices relative to measured income of all sectors of the economy …”

    Sorry, but you can’t complain of poverty while you’re sitting on an eminently realisable multimillion dollar asset. Generate income from the bloody thing or else sell it to someone who can.

    • Mel says:

      Translation: “the farm sector has the most inflated asset prices relative to measured income of all sectors of the economy …”

      Asset prices don’t show up on a profit and loss statements, genius.

      • Tel says:

        They do when there are mortgages involved (hint: interest payments). Hopefully you aren’t giving financial advice to the rural community.

        • Mel says:

          Asset prices are asset prices. Interest payments are interest payments.

          I hope we’ve now cleared that up.

        • derrida derider says:

          Tel’s right, Mel. The point of owning a big asset is so that you can borrow against it to invest in income growth, and if you can’t turn it into income then you should sell it to someone who can.

          Companies that are consistently asset-rich but income-poor are considered badly run, having a lazy balance sheet and hence ripe for takeover.

  8. john Walker says:

    David
    Good article.
    In my locality it is evaporation that has risen sharply (more than rainfall decline). We have far more hot NW wind days than we did 30 years ago.
    Natural Sequence methods, which raise stream beds back up to the levels that they were pre-settlement do help. Instead of big rainfall events rushing down creeks that had become deep drainage ditches, the water spreads out soaks in and forms chains of ponds,and slowly leaks out over longer periods of time. Storing water under the ground is better that storing it in small open dams.

    However NSW bureaucracies have had problems distinguishing natural sequence structures from dams ( one local was at one point threatened with a million $ fine) and the rules are complex: how many ‘water courses’ join a stream upstream of the point where you want to build a structure is part of what determines what can be done without a lengthy approval process . And exactly what constitutes a ‘water course’ can be a line on a 1:2500 map that was made almost completely by satellite mapping with next to no on the ground checking.

    • peter says:

      I believe the NSW situation regarding ‘runoff” is that a landowner can take 10 percent but there are lots of rules about prohibiting ‘turkey nests’ across significant gully lines etc. These changes followed a lengthy period where building farm dams was virtually free, courtesy of the ‘Soils Division’.
      Agree with comments regarding ‘bad’ farmers claims on ER – ‘exceptional circumstances’ and its sequel …noting that ‘to dob’ is frowned on.
      Regarding climate change I believe it is absolutely imperative that farmers update on ‘carrying capacity’ an ‘estimate’ of the local stock and station agent who obviously has a vested interest in boosting such a figure. Landowners that allow less than 70 percent of ground cover (grass etc) to develop as a result of grazing pressure ought to be put out of business. Stronger wind pressure as recently reported will worsen soil loss.

      • john Walker says:

        We once sat down with a farmer friend and tried to work out the rules re watercourses:

        Around here we are part of the Sydney Catchment area -they have their own rules and definitions, then there are other state department(s) with their own rules and definitions and then is also local government with its own rules and definitions of ‘watercourse’.

    • A small but important point, John: a map at a scale of 1:2500 would not (could not) have been made from satellite imagery. Aerial photography maybe, but it’s likely there would also have been field verification of some sort as well.

      If the photogrammetrist who plotted the disputed watercourse put it there, you can bet that it is, in fact, a watercourse (at least occassionally) – from memory the criterion is that there be eroded banks.

      • john Walker says:

        Sorry typo, meant standard CMA 1:25000 maps. There are others but these are what is usually used.

        Re “criterion is that there be eroded banks.” do you know more?
        It was quite confusing as to what was a: ‘watercourse’, varied a fair bit according to which official of ‘what ‘, that you spoke to.

        • I think you’d be hard pressed to get 1:25 000 maps off satellite imagery as well, John. We used to use 1:80 000 aerial photography (nominal scale) for 1:100 000 and 1:50 000 maps. What gets classified as an actual creek depends a bit on the mapping agency and the intended purpose of the map, but a watercourse was formally defined in the Specification we used (wording from memory, 20-odd years ago) as having clearly-eroded banks. That would indicate that water flowed along it often enough to cause that erosion. CMA should’ve been (but possibly weren’t) operating from the same, or a similar, Specification.

        • Oh, and from memory: you may be right about the lack of field verification. I don’t think CMA did too much of that.

        • john Walker says:

          Sorry the maps are/were? based on aerial photos.
          I think that eroded banks would not suit all actual streams, some around here are undamaged natural ‘chains of ponds’ and some of the small streams in the Monga forest do not have eroded banks.
          The problem down here was as much about LG interpretations of other levels of government interpretations and so on. The LG interpretations at the time seemed arbitrary and when the farmer pushed back the matter was dropped

        • john Walker says:

          David off topic but I really adore maps! have hundreds and hundreds of all kinds of maps.

        • John, chains of ponds would also be plotted off the aerial photography. I should also probably explain that by “eroded creek bank”, I don’t mean damaged, just that it’s clear from the photos that running water has made a creek for itself.

      • john Walker says:

        There are a few mapping errors in my area that are a bit strange. For example there is a reasonably large brick and tin structure at Reidsdale http://www.photographsofaustralia.com/cities_and_towns/pages/old_church_d610e.html , it was shown on previous editions of the CMA 1:25000 maps but went missing in the latest edition, it is quite visible and still there.

        And there are errors that suggest lack of on the ground checking -There is a ‘ road’ on the Badja 1:25000 that does not exist and never existed- at the time of aerial photos, a farmer had slashed a narrow strip (about 2-3Ks long) so as to put up a new fence. The thing is this non existent road connects to a dirt but 2wd road that is also is self not quite where it should be on the map- in this locality the actual road is about 1k to the west of where the map puts it.

        Re the farmer and the water authorities.
        Part of the problem was a matter of interpretation of watercourse and ‘natural’: one of the watercourses up stream from the natural sequence structure the farmer had built, on close inspection looked quite a lot like a (circa 1850s ) drainage ditch- it was very strait, cut across the contours in a unnatural way and connected what had been a swamp with the main watercourse.

        • The missing building is odd, as is the misplaced road (although I’ve noticed a couple of positional errors on the odd CMA map I’ve tried using as source material for other maps). I think some of their maps are based on much older, less accurate, source material, and haven’t been changed in line with detail plotted from aerial photography. The misinterpretation of a slashed strip as a track is not so surprising, as inexperienced photogrammetrists often get it wrong (I once plotted a bunch of caravans as buildings, and I got mocked for it by the blokes who’d actually gone there to check it).

          The watercourse, otoh, should be a no-brainer: if it ran straight and didn’t go down a re-entrant in the contours, it should’ve been labelled as a drain on the map.

        • john Walker says:

          Re the ‘drain’ the area it is in is fairly flat , just a slight rise of about 2-3 m(at most) between the swampy ground and the main creek, less than the standard maps 10 meter contour interval.

          The missing building is odd, it is on the previous edition, is visible from the road. Is it possible that its de-consecration , as a church, somehow got miss -translated by the mapmakers as ‘demolition’ :-). More generally I think the new maps do not show ‘ruins’ and other traces as much as the older maps.

          The misplaced road could have a few explanations; the area has been logged on and off for about 150 years; there are a number of old roads in the vicinity, though none of them is very visible;it is also possible that the 2wd dirt road may have been upgraded about the time the aerial photos were taken (1999).
          And the older editions of the Badja map were also unreliable on this area, it is right on the tip of a very wild area of steep mountain slopes that have provably never seen much human, ever.

  9. paul walter says:

    I wondered why the cockies got away with it again, after everyone else got kicked in the guts.

    • murph the surf. says:

      Oh come on Paul you know exactly !
      We provide an example of how to be , how to live to our suffering urban fellow citizens……
      Growing food for the toiling masses without any thought for ourselves, our careful guardianship of the environment ensuring they all have somewhere nice to go for their 4 weeks free time.
      As they gaze into the rural and seaside real estate agent’s windows they get to dream, to imagine another life , another place to buy a cool and delicious ice cream.
      We are in fact a subsidised reality show and without it what would Australia be ? A series of scarcely related “Hong Kong”s clinging to the coast wondering how we all lucked out in the refugee raffle….

  10. billie says:

    I dispute the assertion that Australia is a net food exporter.

    Nestle Australia board member Elizabeth Broderick said that Australia was a net food importer on Jon Faine ABC Radio 774. I assume a Nestle board member ‘knows her onions’

    Whether “In 2009-10, Australia exported $24.3 billion worth of food compared to food imports of $10.1 billion” I think its time to look at the mix on supermarket shelves in 2014.
    Canned and frozen fruit and vegies are imported from Europe, China via NZ
    biscuits made in China and Fiji
    meat – Australia
    fish – imported
    canned fish – Thailand
    dairy – still Australian
    bread – still Australian but the bake at home variety is Irish
    aspargus from the Kooweerup farmer was grown in Mexico & Peru

    • paul walter says:

      Yes, everyone knows it, it is not talked about in media, like a number of related issues to do with tariffs, FTA’s etc through to tax dodging and unemployment and it is a con.

      We are being house-trained to accept shit when it is not necessary through creation of a need that allows for pilfering of the Aussie hip pocket.

      No infrastructure spending, no fear not; too educated and they might realise what’s being done, too independent or self sufficient and offshore forces can’t dictate prices in and out of the place.

      A ghetto, apart from all the local collaborators and kleptocrats.

    • David Walker says:

      I assume a Nestle board member ‘knows her onions’

      That would be a mistake. Various food industry lobby groups and populist politicians have made the claim over the years. It continues to be wrong. I don’t want to make claims when I don’t have knowledge, and I don’t know Nestle Australia’s situation or its corporate imperatives. However, I can imagine a world in which Nestle Australia would find it convenient to have protection from competition.

      The dodgy claims are aided by the fact that the category “food and groceries” in some cases includes imported high-value items like medicines, cosmetics and soaps.

      What has been happening is a rise in canned food, particularly vegetables and fish, from various countries in Asia. However, there are also plenty of indications that canned foods, in particular, make up a declining part of Australians’ food consumption; we’re eating out more and using more fresh food at home. (Call it the “Masterchef Effect”.) The combined effects are putting pressure on canners like SPC.

      In checking data sources I came across an item on the now defunct Politifact Australia website. It sets out the facts better than I could do in the absence of a spare afternoon – so I’m going to quote it all. At some point it will disappear from Google’s cache, and it ought to stay on the record:

      Within three to eight years Australia will be a net importer of food and “will not be able to feed itself”.

      Politifact finding: False

      It won’t be too long before Australia will need to import its own food, says the Independent Queensland MP, Bob Katter. Jumping in after an ABC Q & A program question about the need for more economic reform, Katter waved a sheaf of papers in a plastic sleeve and said it again.

      “… here’s the figures. I always bring them with me because people don’t believe me … within three years if you want to use different (sic) – eight years, this country will be an importer of food. It will not be able to feed itself.

      “Now, is there any long-term planning here? Is there any long-term commitment to policies that will enable us to produce enough food for us to stay alive in this country or [will] we have to buy it from overseas?”

      Katter worries about local food producers having to compete in a free trade market with cheap foreign produce that undercuts Australian jobs and industry. Such concerns hit a chord with many people, in city and country.

      He wants temporary tariffs and intends to introduce legislation to reduce the market shares of the supermarket giants and to compel the labelling of unregulated imported foods.

      But will we really be importing more food than we export by the early 2020s?

      Katter’s office responded to our queries with copies of pages 407-408 from his 2012 book, An Incredible Race of People as well as links to a host of economic statistics. In his book, Katter summarised in table form data he compiled from a series of Australian Bureau of Statistics (ABS) and Australian Bureau of Agricultural Resource Economics and Sciences statistical catalogues up to 2010.

      They related to four trade categories: food and live animals; fruit and vegetables; pork and fishery products.

      But figures in the categories were mixed, with some listed in volumes and others by value.

      Each of the four tables appeared to show steady rises in imports since at least 2006. In the case of fruits and vegetables, and pork, the figures showed unrelenting increases in import volumes since 2001.

      Fishery product imports by value rose from 2006 and exceeded exports by 2010.

      And under the broad category of “food and live animals”, Katter’s table showed imports almost always rising since 1998 while exports – sometimes treble the value of imports – fluctuated.

      Katter wrote in his book that the figures showed Australia would be net food importer, “whether your projections use a five-, ten- or fifteen-year timeframe”. “Variations will occur,” he wrote, “but trendlines are indisputable”.

      Are they? Is Katter crystal ball gazing or assuming trends are irreversible?

      We went to four experts who use ABS and ABARES figures for a living. It’s sometimes tricky getting to the bottom of it all but our experts agreed Katter’s prophecy of an Australia unable to feed its people from domestic production was wide of the mark. Very wide.

      It turns out some commodities – wool and cotton, for instance – can be counted as “food”. Other complicating factors include free trade agreements, domination of our domestic food market by Coles and Woolworths, demand by consumers for unseasonal foods and niche products like truffles and foreign cheeses, and the fact that most of our imports are for food that is not fresh, but processed.

      And since 2010, the Aussie dollar has been spectacularly high.

      Katter’s assertions found no friends.

      Mick Keogh, executive director of the Australian Farm Institute, an independent think tank, said Katter’s statement was “complete and utter garbage”. “I am being quite mild,” said Keogh. “It nearly drives me crazy.”

      Australia was the fourth biggest net exporter of food in the world, he said. Growth in food imports, substantial though some were, were mostly in processed foods – canned and frozen foods, for instance – as well as fresh New Zealand potatoes.

      Mike Stephens, national president of the Australian Institute of Agricultural Science and Technology, said Katter’s conclusion was simply “wrong” because Australia produced more than double the food it needed.

      Only a fifth of our wheat and beef production was needed domestically. “Sixty per cent of our dairy goes to Asia, all our live cattle, 29 per cent of our mutton, half our lamb and virtually all our grain. The reason food is imported is because it is cheaper,” said Stephens.

      Alan Randall, professor of agricultural and resource economics at the University of Sydney, was a tad more diplomatic. One had to be “reasonably selective” to come to Katter’s conclusion, he said. Katter had identified a few trends but “there is not much danger that the country will slip into net importer status”.

      The boss of ABARES, Paul Morris, was equally emphatic. He pointed us to the first page of Australian Food Statistics, a publication that shows $42 billion of food is produced in Australia. The $30.5 billion in exports was nearly three times the $11.3 billion import bill. “As a nation we don’t have a food security problem,” Morris said.

      Our ruling

      Bob Katter has relied on selective use of statistics and come to wrong conclusions. As a leading food exporter, Australia is not in danger of having to import more food than it produces, a cataclysmic shift in circumstances aside.

      We rate this as False.

      (Originally posted at http://www.politifact.com.au/truth-o-meter/statements/2013/may/17/bob-katter/within-three-eight-years-australia-will-be-net-imp/ – this site is now offline.)

    • David Walker says:

      Billie wrote:

      I dispute the assertion that Australia is a net food exporter.

      The main source of BS on Australia’s food importing seems to be a 2010 study for the Australian Food and Grocery Council, the lobbyist for packaged food, drink and grocery products manufacturers.

      Here’s more on the “net food importer” myth from the fiercely independent Ross Gittins:

      So how did the food and grocery council get exports of $21.5 billion and imports of $23.3 billion for 2009-10, giving that deficit of $1.8 billion? By using its own definition of ”food and groceries”. We’re not talking about farmers here, but the people who take their produce and process it for supermarkets.

      So the council’s figures exclude all our unprocessed food exports, including wheat (worth $4.8 billion in 2009), other grains and live animals. On the other hand, they include ”grocery manufacturing products” such as medicines and pharmaceuticals, plastic bags and film, paper products and detergents.

      That’s food? It turns out that our exports of ”groceries” totalled $4.9 billion in 2009-10, whereas our imports totalled $12.9 billion, leaving us a ”grocery” trade deficit of $8 billion. This is hardly surprising. Since when was Australia big in the manufacture of medicines? If you leave out groceries, the report’s figures show we had exports of processed food and beverages worth $15.9 billion, compared with imports of $9.9 billion, plus exports of fresh produce worth $700 million against imports of less than $500 million.

      That leaves us with a trade surplus of $6.2 billion for fresh and processed food and beverages. We’ve been conned.

  11. paul walter says:

    Speaking of droughts just reading at BBC, a colossal one apparently has hit Sri Lanka with the failure of their monsoon.

    How would you be, if you lived in a place like that, where even a slight tilt in divine benevolence becomes an existential threat for millions?

  12. Hildy says:

    In the same vein as “why are we subsidising internet access for millionaires with the NBN”, “why are we giving concessional loans to millionaires”?

    If there is a national interest in food security, should it not be managed on the demand side (ie through on market operations purchasing a certain amount of food per time period and reselling it, ensuring that that amount of food is produced locally)?

    any income contingent loan system (secured on assets, etc) should be available to all australians, not just the wealthy.

    • Mel says:

      “why are we subsidising internet access for millionaires with the NBN”

      There is a very good reason for providing universal services and it is political. The lower classes are shit at organising and defending their own interests whereas the middle and upper middle class are good at it.

      It is no coincidence that many state secondary schools are poorly resourced failure factories while the middle class ensure their trusty private schools get public money they don’t need (apart from many of the Catholic Schools, which are a different kettle of fish) and their progeny monopolise the best uni places.

      If millionaires getting the NBN helps ensure a universally high level of service, I can live with that.

      • Hildy says:

        It’s not millionaires getting the NBN that is the problem, it’s millionaires being subsidised because the NBN is one price for the whole country.

        Is it not the correct (market-based) way to ensure that the poor have access by having the network as it is (and charging market rates), and increasing your basic income guarantee / negative income tax such that the poor can afford to pay market rates for access? Perhaps, then, the rural poor would appreciate that their cheap housing and preferred social circumstances come at a cost.

  13. David Walker says:

    Hildy, great questions.

  14. Paul frijters says:

    Nice post, David. Your hypothesis that we may be looking at some form of urban romanticism underlying the political support for bad agricultural policies sounds plausible. Marginal constituencies and the concentrated nature of the farming lobbies probably also play a role, no?

  15. Tel says:

    The sort of bureaucratic nut-baggery that goes on, the real reason land improvement is so difficult.

    http://pjmedia.com/tatler/2014/03/13/epa-wants-to-slap-75k-a-day-fine-on-landowner-who-built-stock-pond-on-own-property/

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