I received the following paper from Ben Rees, who is an economist and farmer, or farmer and economist, not sure which comes first these days. A man with many decades of experience in the economics of agriculture, Ben is deeply involved in the debate on the future direction of Australian agriculture.
The last paragraph in Ben’s paper, which questions the legality of MPCI, should cause the promoters of MPCI to at least ponder and then ponder again. Particularly Mr Tehan.
There is interest and support in high places of government for MPCI. Has MPCI been politicised to gain support among the electorate without the proponents explaining the cost? Certainly this graph is a few years old but the trend line is obvious, maybe if it has changed direction you will let me know? By that I mean whether there is sufficient above the line to afford MPCI.
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You can read how deeply concerned Ben is about agriculture and particularly the drought situation in Queensland and NSW by going to:
The Senate Economics Legislative asked me a question on notice at the Inquiry on March 18th. The question was to compile a short note on multi peril crop insurance. It appears that the House Economics Committee led by Dan Tehan from Victorian Western Districts is pushing it. Also the policy panacea White paper will recommend it.
This attached note was subsequently submitted and accepted by the Senate Economics legislative Committee. It should have been incorporated in Hansard. I do not know if you can publish; but, at least you know it is being pushed at high levels.
cheers
Ben
I have checked and it is legal to publish, as it has been published by the Parliament of Australia.(Editor)
Bob Hall is a well-known agricultural consultant based in Darkan, Western Australia.
Back in the sixties Bob challenged us all about the way we managed our merino sheep.
There was nothing theoretical about Bob’s challenges. They were based on sound, practical and proven experience gained through working with his clients.
Bob offered solutions stretching from sheep yard and shearing shed design, to management practices designed to improve the efficiency and profitability of growing merino wool, which are still, maybe even more, relevant today.
Bob now manages a broad portfolio of consultancy covering all aspects of farm management in the wheat sheep belt of Western Australia. Here he presents his views on a hot topic of the day, Multi Peril Crop Insurance.
The next time you have bacon and eggs, you can be 80 per cent certain that the bacon you are eating has been imported. Your meal will consist of a rasher or two of the forecast 149,000 tonnes of pig meat that will arrive on our shores during 2014-15.
Ten years ago we were importing about 75,000 tonnes a year. With a few stumbles along the way that figure has now doubled to 149,000 tonnes or nearly 2,900 tonnes a week—that’s a lot of pig. Continue reading “This Little Piggy Went To Market.”
Over recent times as Australian agriculture has endured droughts, poor prices and incompetent governments; amid the chaos there have been two major overriding topics for discussion.
The first has been trying to separate the rumours, the gossip and the chit chat from the truth regarding the extent, the size of Chinese investment in Australian agriculture, in land, as distinct from agribusiness or food processing.
There is a body of opinion that claims Chinese interests, including Sovereign Funds have made substantial purchases of land in Australia, using a variety of investment vehicles, which have enabled them to avoid scrutiny by the Foreign Investment Review Board (FIRB).
We have the figures from the FIRB and we name who the biggest investors in Australia agriculture have been over recent times and the results will surprise you. China is at the bottom of the list, below Hong Kong. So why the public and in some cases political interest in China who ‘officially’ appear to be a minor investor? Is it xenophobia, fear, nationalism? — they all mean the same thing really. Do we fear China and is that because we don’t understand them? Whose fault is that?
These are difficult questions for us as a people and as an industry. It is a far more serious question for the media, and I believe the media should shoulder a great deal of the blame, because they have wrung every bit of emotion they can out of China and Chinese investment in Australia, giving voice to rumour and innuendo. Yet the records show that the media have been at least less than diligent and probably lazy in failing to report who the big, billion dollar plus, non-Chinese investors have been in Australian agricultural land over recent years.
The second big question is, forgetting agriculture, can we now manage, as a country, without China? We have all but exported our manufacturing base, everything from engineering, to clothing to hardware to food processing — you name it, what we once made ourselves we now get from China.
If it’s ‘Made in China’ it’s designed to be affordable. The more we buy from China the more dependent we become on them and the more vulnerable we are as the alternatives become uncompetitive.
The resource boom of the last last decade should have made Australia strong but there’s a fly in the ointment, Barclay’s Bank Kieran Davies reports that Australian household debt is equal to 130% of Gross Domestic Product (GDP) this compares to an average of 78% average across the advanced world making us more vulnerable than most to another financial crisis.
So we’ve spent the boom on paying ourselves wages and salaries big enough to build the biggest houses in the world with ‘entertainment centres’ and a bathroom for every resident, double garages to hold the boat and the dual cab 4wd ‘trucks’. Enough left over to holidays to exotic destinations and the like — instead of spending our money on our country, on the infrastructure future generations will need to make us world competitive.
China is now the world’s largest economy. America will fight them for that position — but no matter what happens, China’s influence on the Australia will continue to grow.
Australia’s challenge will be to find the point of balance in our relationship between our greatest ally, America, and the country we cannot manage without — China.
I was reading just today that the view is commonly held in the world of Geo-politics that the 21st century is ‘The Chinese Century’There have been numerous articles in the ‘Global Farmer’ about China and the challenges that country faces in feeding it’s people today and more importantly the problems it will face in the future as it becomes home to a third of the worlds population. China is the world’s biggest wheat grower and something like 70% of that area is irrigated. Like many areas in the world the extraction rate on the aquifers on which China relies is greater than the re-charge rate. Soon we will reveal what food China already imports.There are numerous articles on the www of China’s plans to build a canal from Tibet into China. A State engineer claims in can be done without pumping, which seems extraordinary. Perhaps that will solve their problems, but I gather there are many barriers, not the least being India and international conservation groups. See: The Globalist.The view is held that irrigated wheat is unsustainable in China and that the area of dry land wheat will grow and China will continue to buy wheat land in other counties where ever it can. With a rapidly ageing farming population in Australia, a large number of farms either for sale voluntarily or being pushed, and with Australian investors keeping their hands in their pockets and off their wallets, I don’t think a few extra dollars will deter either the foreign urban or rural land investor. In fact I think the measure is just plain silly and ignores reality and is a lolly for the anti foreign investor chatterati.The reality is that real estate, both rural and urban is for sale and there is nothing to prevent anyone from anywhere in the world from purchasing those assets. We have the most expensive houses in the world, don’t believe me well have a look at this article from Business Insider. So we have only ourselves to blame if we can’t afford our houses and others can.As for farming land in the next Global Farmer we will show how Australia is the second most expensive country in the world to grow a tonne of wheat, Canada believe it or not, is the most expensive.The following by Prof Dearing from Southampton UK has certainly helped me get a better perspective on what seem to be China’s voracious appetite for Australian real estate including our farming lands from the far south to the far north.
China farming boom has left ecosystems in danger of total collapse
More intensive agriculture has reduced poverty, but China’s environment can’t handle the pressure.
China’s push for more intense farming has kept its city dwellers well-fed and helped lift millions of rural workers out of poverty. But it has come at a cost. Ecosystems in what should be one of the country’s most fertile region have already been badly damaged – some beyond repair – and the consequences will be felt across the world.
This is part of a long-running trade-off between rising levels of food production and a deteriorating environment, revealed in recent research I conducted with colleagues from China and the UK. Yields of crops and fish have risen over the past 60 years at several locations we studied in Anhui, Jiangsu and Shanghai Provinces in eastern China. But these are parallelled by long-term trends in poorer air and water quality, and reduced soil stability.
You may ask if this a bad thing. After all, increasing agricultural productivity has been one of the factors responsible for lifting millions of rural Chinese out of poverty. Does it really matter that the natural environment has taken a bit of a hit?
Well yes. For agriculture and aquaculture to be sustainable from one generation to the next, the natural processes that stabilise soils, purify water or store carbon have to be maintained in stable states. These natural processes represent benefits for society, known as ecosystem services.
Indices of food/timber production (red) mapped against ecosystem services (green) across the lower Yangtze river basin.Zhang et al
Throughout the latter half of the last century, these services were being lost relatively slowly through the cumulative, everyday actions of individual farmers. But the problems accelerated in the 1980s when farmers began to use more intensive methods, especially artificial fertilisers – and again after 2004 when subsidies were introduced.
Worryingly, in some localities, the slow deterioration has turned into a rapid downward spiral. Some aquatic ecosystems have dropped over tipping points into new, undesirable states where clear lakes suddenly become dominated by green algae with losses of high-value fish. These new states are not just detrimental to the continued high-level production of crops and fish but are very difficult and expensive to restore.
Pollution of Chao Lake is obvious – even from space.NASA
Click to enlarge
These natural processes are degraded and destabilised to the point that they cannot be depended upon to support intensive agriculture in the near future. The whole region is losing its ability to withstand the impact of extreme events, from typhoons to global commodity prices.
What can be done?
National policy must prioritise sustainable agriculture. This will mean big changes on the farm: fertiliser and pesticides must be applied in the correct quantities at the right time of the year, cattle slurry and human sewage must be disposed of properly, chemicals getting into streams and rivers must be reduced, and fish feed has to be controlled.
Unfortunately, this is easier said than done. Farmers are still generally poor, badly educated and ageing. Good agricultural advice is lacking and big cities still tempt the younger farmers away from their fields. All these factors mean that rapid action is unlikely.
Can you farm too much?EPA
The recent introduction of the Land Circulation reform policy, allows farmers to rent their land to larger combines. The policy is designed to overcome the inefficiencies of small farm holdings but it may not be taken up widely in the more marginal landscapes where potential profits are low.
All the evidence points to a need for a significantly improved system of information and technology transfer to individual smallholders, probably involving a more efficient coordination between agencies.
Global problem
But there’s a larger-scale context to this problem that may affect us all. China’s grain production has risen fivefold since the 1950s, outstripping the pace of population growth. Despite this, the nation is no longer self-sufficient. The shift towards more meat production has placed a demand for soybean and cereal animal feed that can no longer be met internally. In 2012, China imported more than 60% of all the world’s soybeans that were available for export, and cereal imports are also on the up.
Reliance on imports to fill a shortfall in home produce is nothing new. But in China’s case, the additional risk that agriculture is increasingly unsustainable may amplify the demand. The potential scale of demand for imports is bound to have repercussions for global food production and food prices. Unless reforms are introduced quickly, the rest of the world may well find that they are sharing China’s trade-off with nature – through the weekly shopping bill.
THIS ARTICLE ORIGINALLY APPEARED IN ‘THE CONVERSATION’ ON FEBRUARY 26 2015. The Global Farmer thanks ‘The Conversation’ for making this article available.
Author
John Dearing
Professor of Physical Geography at University of Southampton
Disclosure Statement
John Dearing receives funding from NERC-ESRC-DfID Ecosystem Services for Poverty Alleviation Programme. He is a member of the The Green Party.
Why are stock dying in the north of Australia from starvation when there is plenty of stock food in the country? For the same reason, I suppose, that thousands of people all over the African continent and in refugee camps in the Middle East, especially children are dying every day from starvation and deprivation while there is no shortage of food in the world. If we are honest with ourselves, the majority of us, as we fill the larder for Christmas, just do not care. The statistics say that after we have finished our celebrations, we shall throw away half of the food we have bought.
There is a story of Bono of at a U2 charity concert, must be over ten years ago now, quietened the crowd, raised his hands above his head and clapped his hand together once. Three seconds later he did it again, and then again and again every three seconds. The, crowd, I think it was in the Albert Hall was quiet. Very gently he spoke and said, ‘Every time I clap my hands together, every three seconds, a child dies in Africa’. Someone in the audience shouted ,’Well stop f*&$#@ng clapping then.’ The crowed booed. The money raised went to help the children in Africa yet to this day they still die of starvation.
There is nothing I can add to the disaster that is the drought in Queensland and Northern New South Wales, except to say as a nation we have always been able to find millions of dollars to help people in other countries to survive and recover from natural disasters like earthquakes and tsunamis and as a nation we have been proud to help.
Now we have a disaster as bad or worse than any we have helped in other countries going on right now in the north of our own country and it seems we cannot come to our own aid. I ask the question why and who gives a damn about a deficit or a surplus budget when the heart of our northern agriculture is suffering unimaginable hardship? It is a situation that could be substantially ameliorated, made unimaginably better even fixed by spending money, government money, our money.
Irrespective of one bank agreeing not to foreclose and threats being made to name and shame, and high profile media people giving their support to the beleaguered landowners, the drought remains, stock continue to die. The Intellectual property of ‘Agriculture Australia’ is substantially in the genetics of the stock we have bred over many years. That gene bank is among the best in the world, it is priceless and will take years to replace.
One of the great shames of the unnecessary ‘selling off’ of the Australian merino flock for meat, is that some of the best wool producing genetics in the world finished up as Ugg boots, sheepskin coats and on the barbecues and in the cooking pots around the world.
The task before us now is to feed the stock that remain, we have and stop the death from starvation of Australia’s greatest asset, the gene pool of Australia’s national beef herd that has taken generations to build and which is in the process of being unnecessarily lost for all time.
Why has this government inquiry never (as far as I know) been published and discussed as a matter of national importance? Because what it is really saying is the Australian processed food industry in Australia is buggered, it’s just a matter of time. If ever Australia becomes reliant on imported food then we shall have lost what control we still have over our resource rich country and we shall be at the beck and call of new masters. Continue reading “The Future of the Australian processed food sector”
Are we starting to see, ever so gently, the beginning of the food wars, which have been talked about in recent times and none of us believed in?
Are countries that cannot produce enough food for their own needs, starting to make sure they don’t go hungry in the future?
Can we in Australia fill the gap? We are always boasting about how many people we feed as well as ourselves. But our food imports are going up and our production per hectare with cereals is going down.
We are cutting back on Research and Development (R&D) and we are reducing the size of our Departments of Agriculture.
So the question remains can we and do we want to fill the world-wide demand for sheep?
The new covered sheep sale yards at Katanning. The best in the southern hemisphere. Capacity over 20,000.Photo courtesy ABC.
The recent announcement by the Walsh brothers from Bunbury in Western Australia that they had done a deal for lamb and beef with a Chinese company worth a billion dollars over five years is some deal.
This is great deal for Western Australia and the rest of Australia. The Walsh’s’ say they have been working in China for many years and this deal is the culmination of all that work. I wonder if we are beginning to witness a land and a food ‘grab’ as part of a strategic plan for China’s future? Continue reading “Mary has a litle lamb – and all the world wants it.”
It has been difficult for me to be true to the name I gave this web site ‘Global Farmer’ In Australia. I chose the name because, 1. I had used it before and, 2. Because there is so much going on in the world of agriculture and agricultural trade that we never get to hear about. We are traders, or at least we have many traders living in our midst. We now know why they are keen to be here because there is more money in trading in grain than there is in growing it, and according to Rabbo Bank boss this is the most expensive country in the world to grow wheat. So we have a few challenges in front of us.
I have the time and I have the intense interest in food trade and objective to see Australian agriculture, once again, world competitive.
We really are a small player in world agriculture. We grow just 5% of the world’s crop. We jump up the ladder as a trader where we come in at between 12 and 15 in world rankings. That’s why the big boys want to play here. If you live 200km from the port it’s costing you between $60 and $75 a tonne to get you grain to port.
I know we are a world leader in the export of beef but I’m looking for a volunteer to tell the full story. From what I am told we could do so much better both domestically and for export.
One of the reasons we don’t get a lot of international news is because we are obsessed it seems to me, with domestic politics and in agriculture with domestic agricultural politics. It is hard to imagine an industry with so many organisations, committees, Peak Bodies, and people who claim to speak for one particular group or another, gossipers and rumour mongers. Yet in spite of that, we are deeply dependent on the export markets for our commodity products, cereals, meat and wool and to a lesser extent on perishable goods, fresh fruit and vegetables. Quite fascinating that WA is exporting fruit and veg to Bali, maybe it reduces the Bali Belly? Continue reading “Q. How unlevel is the ‘playing’ field? A. It’s a hill.”
“You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!”
Premier of Western Australia Colin Barnett.MP.
Photo Fairfax Media.
“Maybe stop talking about issues like daylight saving and the like and concentrate on real farm issues,”
“That would help government produce real results for the farm sector.”
“Maybe one farm organisation would help.”
Colin Barnett. Premier of Western Australia April 2013
Dale Park, President of the Western Australian Farmer’s Federation (WAFF or WA Farmers) replied:
I think that is true, there is a lot of people out there who just see this fighting between WA Farmers and the PGA as totally counterproductive,” he said.
“And I am one of them.”
Pastoralists and Graziers Association (PGA) president at the time, Rob Gillam said he was surprised by the Premier’s comments. (Tony Seabrook is now President of the PGA.)
“It was a bit unusual, but I am not sure why he went where he went to be honest,” Mr Gillam said.
“We (PGA) were pretty happy with the achievements in agriculture by the Barnett-led government in the first term and we are looking forward to the changes in the second term.
“There are a couple of areas in which we are not happy, but that’s life.”
Mr Gillam said he saw PGA and WA Farmers in a similar light to the Liberal-National parties in State Government, but stopped short of calling it an alliance.
Mr Park also said he was surprised by Mr Barnett’s lack of understanding of the issues farmers were facing in the Eastern Wheatbelt during his two-day trip last week.
“Everybody knows the problems – getting finance, the high dollar and the cost-price squeeze – but what we are really short on is solutions,” Mr Park said.
“But what surprises me is that he (Barnett) was unaware of that (of the issues facing farmers).”
When asked if it was a blight on former Agriculture and Food Minister Terry Redman for not keeping the Premier properly informed on the issues, Mr Park said it was.
“Every time we tried to talk to Mr Redman about this he would say you are talking the industry down,” Mr Park said.
For the full story and even ‘more’ comments from the Premier go to
Dale Park. President of Western Australian Farmers. Photo: Fairfax media.Tony Seabrook. President of the Pastoralists and Graziers Association. photo:Fairfax Media.
1920s Poster in England
The mighty who operate with total impunity – a law unto themselves.
Would Mr Barnett have been as blunt in public to Richard Goyder, Wesgarmers CEO and Ian McLeod CEO of Coles about the anguish they have caused in the dairy industry with their dollar a litre take it or leave it bludgeoning? No, he wouldn’t dare. But he gets away with arrogance, rudeness and denigration in public to farmer organisations because he knows he can.
Colin Barnett was sending a big message to the PGA and WA Farmers in being so sarcastic, of concern is judging by the reaction there was no one at home in either WA Farmers or the PGA listening or if there was they didn’t understand. We all know Barnett’s sarcasm about the curtains fading is to do with the claims that milk production would go down and the kids wouldn’t go to sleep all as the result of daylight saving.
If that is the best the Premier can do when talking agriculture, his memory is convenient and it brings into sharp focus the lack of real communication between the Premier and the leaders of the PGA and WA Farmers.
Dale Parke’s comment also tells a sad tale of the poor working relationship between himself and the Minister for agriculture at the time, Terry Redman. Mr Redman obviously had his own agenda and attached no importance to the views of the President of WA Farmers.
There are some really difficult challenges around agriculture at the moment, of immediate concern and not the least being the diabolical condition of our country infrastructure, road and rail. So it was a typical Barnett ‘country hick’ comment designed to denigrate and take our mind off other matters.
An old and effective trick to use a bit of personal denigration in a not too subtle way to change the debate. Twelve months later the road and rail debate has gone nowhere. Probably deteriorated as the Shires have run out of money to maintain roads to carry trucks with payloads far beyond the design criteria of what in many cases are gravel roads built 50 to 100 hundred years ago.
for the full story go to: http://www.brokenpromises.org.au/promises/closure-of-tier-3-rail-lines
Trouble was the Premiers sarcasm and comments were like water off a ducks back. Dale Park as good as agreed and said he couldn’t get through to his Minister Terry Redman when he needed to and Rob Gillam dismissed the Premier with a metaphorical dismissive wave of the hand.
Dale Park, when he refers to what he sees as a lack of understanding by the Premier of the problems of the eastern wheatbelt as they were so graphically portrayed at what I call ‘The Meeting of a Thousand Souls’ that was held in Merriden over twelve months ago, should remind the Premier that at that time, shortly after the meeting and without his Minister for Agriculture, Mr Barnett gave what I took to be a commitment that he personally would better educate himself with regard to not only the problems of the eastern wheatbelt but of all agricultural regions. He gave the impression he understood the debt and the problems it was causing to the community from farmers to the business people and to the working families.
He also gave the distinct impression he would take a personal interest in the situation. Ken Baston, the new Liberal Minister for Agriculture visited another part of the wheatbelt and virtually repeated the Premier’s commitments.
The financial aid that was promised at that time has just become available. It beggars belief that it has taken so long for the Commonwealth and the State to sort the scheme out. Best part of 18 months to develop the terms and conditions. Then again it is not surprising because Machiavelli is alive and well in the halls of power. I gather there has only been one successful applicant. Was it planned that way? Between the Department of Agriculture economists and the consultancy groups they seem to work so closely with now, it would be difficult, given the number of applications approved, to believe the conditions were drawn up to help as many as possible.
It is a sad reflection on the Minister and the bureaucracy, presumably the Dept of Agriculture and Food, if the conditions of the financing are not designed to help those most in need.
Rumours abound that both the PGA and WA Farmers have seen better financial times. Membership is low. Patronage and sponsorship is becoming more difficult.
The stories of orange lifeboats moving around Perth water in the middle of the night have not been confirmed by either organisation. Neither have the rumors been confirmed that offers have been made on two substantial houseboats.
It’s time for Change
Now is the right time for a change? It’s time both the P&G and WA Farmers, with their heads held high for they have toiled for agriculture and done a job few of us would take on, to give the job away.
It is time for them to take the same advice that Cromwell gave to the Rump government. ‘In the name of God go!’ and then we should add the words ‘And thank you for all you have done over the years.‘
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