Rising numbers of families cannot afford to spend enough on food.

Continue reading “Rising numbers of families cannot afford to spend enough on food.”

Is China Australia’s Land of the Golden Fleece?

There is a lot of ‘chatter’ mostly in the media and mostly from the uninformed like politicians that Australia has the agricultural productive capacity to become the ‘Food Bowl of Asia.’ Is it true?

Part 1.

There are those in the city who are plotting and have the money.

Is China Australia’s land of the Golden Fleece? Or is there a danger we could lose our money on the way to the goldfields? Fear not there is hope. Why? Well, for one thing there have been several very high profile meetings under the banner the ‘Global Food Forum’. Never heard of them? Not surprised, they were advertised in places where those on the land were unlikely to see the the advertisements.

When I saw the ‘Global Food Forum’ first advertised in The Australian and had a look at the list of speakers I thought they were notable in the world of finance and agribusiness if not agriculture, that is I couldn’t see many farmers on the list, but my interest was aroused non the less. I then enquired as to the price of a ticket and added on two nights accommodation in Sydney and the cost of plane ticket and the thousand kilometre round trip in the car to get to Perth, I decided the whole thing was out of my reach, way out.

Disappointed because I couldn’t afford to go, I gained some pleasure out of becoming cynical about the whole thing. Just another Pitt Street Cockie talkfest I reasoned, and those Pitt Street Cockies are so clever they know the answers before you ask the question and most of them don’t know where Western Australia is anyway!

I noticed the host of the event was a multi millionaire, one of the biggest carton manufacturers in the country, so he had a whopping vested interest.  I deduced he would have said to himself, ‘more food, more cartons, only two manufacturers in Australia so it’s worth a punt.’ I looked up the definition of the word ‘altruism’. Never met the man so I don’t know if it applies.

image003Will these men save or ruin Australian agriculture. We need to hear what they have to say.

Continue reading “Is China Australia’s Land of the Golden Fleece?”

The Future of Farming is in their Hands – Is it Safe?

If there is one topic that occupies the minds of farmers and those on the land more than the weather, or the price of wheat or wool or sheep or cattle – it is the future. Is there a future in agriculture for our children and grandchildren? If there is, what kind of future will it be?

Introduction – The Present – Where we Are.

There are statistics that show our agricultural productivity in Australia is declining not increasing. There are statistics that show increases in productivity are directly tied to investment in Research and Development. As a nation we are reducing our investment in research and development.

As we shall see later, there is evidence that bigger is not always better.

It is a worry that it was recently announced by Rabobank, one of the biggest agricultural banks in the world, that Australia is now the most expensive place in the world to grow wheat. It costs twice as much to milk a cow in Australia compared to the United States. Yet we compete in world markets with the United States for both dairy and wheat.

No grain grower will surprised to learn that in Australia it takes 16 trains to haul 60,000 tonnes of wheat to port, and in Canada it takes just six.

It is with almost regular monotony that we learn of yet another food processor closing down in Australia and moving overseas. It’s cheaper we are told to source the food overseas, process it there and the export the finished product to Australia, than it is to grow the food it and process it in this country.

Unless the world food supply changes dramatically, one way or another, Australia will increasingly rely on imported food. We are constantly bombarded, by politicians and this new breed of city-based agri-entrepreneurs with the proposition that Australia, can be the ‘Food Bowl of Asia’. What nonsense. We already import more processed food than we export.

What we export has very little if any value adding done to it. Boats full of grain and meat, raw wool, live sheep and cattle. It’s cheaper to import cakes and biscuits from Holland than it is to make them in Australia – why is that? We have imported bread dough from Ireland to be baked in Australia. Neither Holland or Ireland could be classified as a Developing Country.

We should not delude ourselves that the only food we import comes from countries with ‘cheap’ labour and costs. We have used that excuse once too often.

Our major retailers control over 80% of our food business. They have the ability to scour the world for the cheapest food they can buy. They do not care if it is cheaper than what is grown in Australia. If they do buy Australian then they drive the price down to the Australian producer to same price as they can buy it overseas. They have to protect their market share and profit.
On May 29 in the Farm Weekly  the Federal Minister for Agriculture, Barnaby Joyce, gave his views on the Muntadgin Farming Alliance and expressed some sympathy and empathy with the group and with farming in the eastern wheatbelt.
As a direct result of that interview, Ken Wilson, in the June 5 edition of the Farm Weekly, in the middle of seeding for many, put a series of questions to Nationals Member for Central Wheatbelt, Mia Davies, and Agriculture and Food Minister for Western Australia, Ken Baston.
At the Global Farmer, we believed the questions put to Ken Baston and Mia Davies by Ken Wilson deserved another outing, away from the rough and tumble of getting the crop in the ground. The Farm Weekly agreed so here they are. So now you can give these serious conversations some considered thought.
They are important questions. You make up your own mind on the quality, on the depth of the answers. Can we look forward to new future attacking old fundamental faults or just the same old parcel in different paper and a bit more tinsel, a few more balloons and a bigger whistle?
This time there are no time or space constraints. Read what Ken Baston and Mia Davies have to say and then have your say. Here are the questions:

Continue reading “The Future of Farming is in their Hands – Is it Safe?”

Is our current agricultural policy defending the people?

Mailler’s excellent article ‘Why is Agriculture Different’, begs the big question of the extent to which the agricultural industry’s relationship with government policy has resulted in a viable, sustainable and world competitive Australian agriculture? And if not, is the government failing to defend the people?

Empirical data – as Mailler brings to the fore – tends to show that the relationship of agriculture with government policy (in the context of global competition and the myriad of factors that express themselves through industry performance data and trends), has resulted in the industry exhibiting signs of systemic failure. The ‘vital signs’ of this industry are not good.

If one sets aside short term factors of drought, flood, fluctuations of commodity prices and looks at the long term trends, it is inescapable that revenue has been ‘chased’ by costs and in some cases overtaken by costs. The trends are seemingly inexorable.

While in any industry there will be leaders and laggards and those who fall off the bottom, the situation for agriculture as Mailler points out is not just the ‘tail’ that’s failing – it’s many of the core businesses that make up the industry.

Whether one agrees or disagrees with past and current agricultural policy, one must surely accept the notion that the outcomes are not good?

So what of policy for agriculture?

Governments have a primary duty to ‘defend the people’ and see to their wellbeing.

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Photo: Courtesy Veeoz

For a couple of hundred years, most ‘western’ governments have taken this duty to extend from:

  •  basic ‘human rights’ of health and education systems (safe drinking water, sanitation systems, hospitals, primary, secondary and tertiary education), through …
  • reform and development of democracy (wide range of concepts of what is democratic!)
  • military defence of their territory and its people from aggressors and on to…
  • making their industries competitive in the markets where their goods and services are sold.

Governments develop and implement POLICIES to cover all these aspects and more of our national life in pursuit of their big job to ‘defend the people’.

Importantly, governments generally see it as prudent to make the nation’s export industries profitable and sustainable in the longer term because their profits contribute so much of the resources to fund the implementation of all other policies!

One of my observations in Australia over the last 40 years or so is that agriculture has been progressively de-capitalised and made less resilient as a result of government policy. Local control of the industry is being lost as new capital, new vision and new policy comes in from overseas. Continue reading “Is our current agricultural policy defending the people?”

Why is Agriculture Different?

“The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways”
– John Fitzgerald Kennedy

Recently the dire situation faced by many farmers and graziers induced by yet another “drought” has reignited the debate around justification for Government financial support to farmers.

On one hand there is the visible and emotive scenario of dying stock and desperate farmers that demand immediate aid. This call for financial support externalises the disruption of drought and market interruption and deems them beyond reasonable management.

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On the other hand there is the cold and objective rationalist position that argues, ‘agriculture is a business like any other and hard times are a fact of life, and so if you can’t handle the pressure – get out’.

Continue reading “Why is Agriculture Different?”

The City – Country Divide. As big as ever.

The gross value of Australian farm production in 2009-10 was $48.7 billion. So the just announced drought aid package of about $320 million from the federal government is equivalent to 0.6570841889117043% of $48.7 billion.Public domain image, royalty free stock photo from www.public-domain-image.comLooks like it could be a good year!’

That, ladies and gentlemen of the land, is what you are worth. In other the words, as far as the government is concerned the sustenance and the rebuilding of much of agriculture in Australia after one of the worst droughts in the last 50 years is worth three quarters of five eights of bugger all.

Rural debt is already in excess of $63 billion, so if you borrow another $320 million from the government, you will add 0.5079365079365079% to your debt – but first you have to qualify.

If the qualification criteria are anything like those set for the commonwealth/state funding last year, there won’t be a queue anywhere shortly.

If you want to put the drought aid package into perspective $320 million will pay for one third of a new footy stadium in Perth. Six and a half kilometers of Freeway at $50 million a kilometer or about the same price as it recently cost to upgrade 4.2 kilometers of the Great Eastern Highway.

As many have waited for rain, shot livestock, sold them for next to nothing, taken the kids out of school, done budgets, and talked about next year, should they or should they not try and keep going? I have wondered what this new government, a conservative government will do to ease the problems being faced by so many in rural Australia. This is what agriculture produces for Australia and in exports for the rest of the world:

 

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(Note there is s slight difference in the above gross value of the figures. They both came from ABARES)

Travelling round in Western Australia it’s not difficult to see the affect on small rural towns of 30 years or so of farm aggregation. Farms have doubled in size and families have gone. In some cases schools have closed. Shops are empty, some towns look neglected and many can’t raise a weekend footy team, so they import players from the city to keep the local league going – probably pay them too.

The mantra of the 70s of ‘Get Big or Get Out’ preached by bank managers and farm consultants and amplified a hundred times by the popular rural press made a poorly researched academic theory into what many believed was the only way to survive.

How much use, how effective are the politicians elected by rural constituencies and the extensive and expensive agricultural lobby (MLA, GRDC, NFF; add to the list at will) at getting the true story of Australian agriculture into the heads of the urban politicians who, because of numbers, not because of brains, run the country? On current performance they are about as much use as tits on a bull.

Quite honestly who cares about Holden and QANTAS? One is foreign owned and the other has to face up to competition from foreign government-subsidized airlines.

There is no reason why we should subsidize a car that doesn’t sell; and if we can’t afford to subsidize QANTAS, then we have to let them go and find their money somewhere else. Air travelers being what air travelers are, all but the rich and those on expense accounts will fly by the cheapest airline. ‘The Spirit of Australia’ is sentimental nonsense and political clap-trap.

The difference between Holden and QANTAS and Australian Agriculture is that compared to agriculture, Holden and QANTAS are games of Lego, they don’t grow food and they will never contribute to the national economy in the way that agriculture does.

We will now have to import all of our motor vehicles. Will we ever have to import all of our food? Who knows? Making a living off the land is becoming difficult for many. Working the land is apparently not what many of our young people want.

So maybe in the future it will be Chinese Utes and migrant farmers growing the food? Be like history repeating itself. Great Wall for a Chev and a Chinaman for a Pom.

Saying of the week from Rob Gillam from the Pastoralists and Graziers on hearing the drought relief package offered by the Prime Minister:

“Yes I’m pretty hesitant to give a lot of support to this package. I’m very fearful we’re going back to a business subsidy type circumstances,” he said.

Please explain!

 

 

The China Enigma

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Be not afraid of growing slowly; be afraid only of standing still

There is now no doubt, there is unquestionable evidence that the Premier of Western Australia, The Hon Colin Barnett, MEc. MLA. Minister for State Development; Science and the Hon Ken C. Baston, Minister for Food; Fisheries, are intent upon doing everything they can to secure more Chinese investment into West Australian agriculture. How they are going to do it?
They are going to hold an investment conference especially for the Chinese. Mr Barnett and Mr Baston are certainly not standing still:

Western Australia – China Agribusiness Cooperation Conference.
State Reception Centre, Kings Park, Perth
9 -11 April 2014
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Premier Barnett with a hook for catching sharks.
Photo:WA Today.
Premier Colin Barnett is a passionate West Australian. There is also no doubt that Mr Barnett has determinedly used his Office, and the influence that goes with that Office, to secure major commitments from the Chinese to invest in West Australian industry, mainly into mining, but there have also been substantial Chinese investments in agriculture.

Mr Barnett has led delegations of business people from Western Australia to China to further cement relationships and to forge new ones.

I don’t think it would be unfair to call Colin Barnett a Chinaphile.

Premier Colin Barnett Southern China Airlines Gala Dinner
Premier Colin Barnett at Southern China Airlines Gala Dinner.
Photo: WA Tourism

There has always been a belief among the majority of West Australians that ‘Chinese’ investment in Western Australia in the past has been conditional upon the imprimatur, and investment of the Central Government of the People’s Republic of China.

In other words the Government of China is always involved somewhere in the deal as an equity partner. Mr Barnett must be aware of this and be unconcerned that a sovereign state is investing in and becoming an owner of, Australian freehold property.

As far as I am aware it has never been denied that the Chinese government will be a equity partner in any investment in Australia.

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Chinese Parliament.
Photo: China Today

Recently Mr Barnett was critical of Australia’s foreign investment rules, claiming they were sending the wrong message to China. Mr Barnett said that the United States could invest more than $1 billion in Australia without being subject to Foreign Investment Review Board Rules, but it was different for China’s state owned enterprises where any level of investment from $1 up was subject to review.

Mr Barnett believed this caused resentment in China.

In July 2013 speaking from Zhejiang province in China Mt Barnett said he believed the Chinese were not seeking to own Australian land – they just wanted to protect their investment for food and have a secure relationship with Australia.

Yet the previous month, June 2013, the Queensland Country Life reported that Chinese investors had spent $757 million in the first quarter of 2013 buying land in Australia, with WA, according to Landmark – Harcourts, topping the charts with sales of $350 million. True or false? We may never know.

Well, whatever is the truth, what the Premier really believes will be revealed on April 9 2014. Continue reading “The China Enigma”

Farm Debt Wrecking Australia

Senate inquiry is a chance to reconstruct farm industries.

Farmers struggling with poor prices, difficult weather conditions, and mounting debt, have an opportunity to propose solutions, in submissions to a Senate inquiry that is being held in coming weeks.

The Senate is inquiring into a Bill that was introduced late last year by Senators Nick Xenophon and John Madigan, to establish an “Australian Reconstruction and Development Board” (ARDB) under the Reserve Bank.

Continue reading “Farm Debt Wrecking Australia”

Self Inflicted Injury

This discussion paper addresses a few of the changes, which have taken place in the eastern wheatbelt of Western Australia over last twenty years. Changes, which have brought us to where we are today, to where some are claiming there is a ‘Crisis in Agriculture’.

Change in life is constant, no more so than in agriculture.

This discussion paper addresses a few of the changes, which have taken place in the eastern wheatbelt of Western Australia over last twenty years. Changes, which have brought us to where we are today, to where some are claiming there is a ‘Crisis in Agriculture’.

The question then becomes if there is a ‘crisis’ what has caused it?

The answer seems to be that it is self-inflicted injury.

Continue reading “Self Inflicted Injury”