In July of this year a $22 billion proposal by Sun Cable Pty Ltd, a company which is backed by by two Australia billionaires Fortesque Metals founder Andrew Forrest and and Atlassian co-founder (with Scot Farquhar) Mike Cannon-Brookes was granted ‘major project status’ by the Australian Government to investigate the building in the Northern Territory of a massive 10-gigawatt solar farm (40 million panels) coupled to a 30Gwh storage facility, which I presume means a big battery.
The news that China accounts for thirty percent of Australia agricultural exports demonstrates how reliant the Australian rural economy has become on the People’s Republic of China.
That news caused some to question the wisdom of the marketers of Australian food and wine in placing such a heavy reliance on just one customer.
That is valid question, but did you know that China buys 30% of everything Australia exports.
Agricultural exports are just a mirror image of what is going on in the rest of the country. In 2017-18 Australia exported goods and services worth a staggering $123 billion to China equal to 6.7% of the Australia Gross Domestic Product.
Mr Albanese, the Leader of the Australian Labor Party, has a poor grasp of Australian political history.
Mr Albanese recently roundly criticised Treasurer Josh Frydenberg for channeling Margaret Thatcher and the policies employed by her to ensure the much needed economic recovery in the UK following Prime Minister James Callaghan and his self inflicted demise in his ‘winter of discontent’ of 1978/79.
Callaghan finally decided to call a General Election in 1979 after the country had been ravaged for years by high inflation and unemployment. In 1978/79 strikes in both the private and public sectors almost crippled the country.
Uncollected rubbish was left to rot in the streets of London, the dead were not being buried, there was a mounting national shortage of food and fuel due to the truck driver’s refusing to work, which all combined to cause a crisis so bad the government considered declaring a state of emergency and mobilising the troops to take over vital services.
Eventually, after strikes which were violent at times, the unions got the wage increases they wanted but it was a pyrrhic victory for them. The country, the people had had enough of the militant unions shambolically and carelessly wrecking the economy, so when they got the chance they elected Margaret Thatcher to be the first woman to be Prime Minister of the United Kingdom.
In eleven years Margaret Thatcher rebuilt the UK economy and made it world competitive and respected if not liked around the world.
Albanese rejected what he saw as Frydenberg’s move to Thatcherism in favour his more Keynesian way of more and more government spending to build infrastructure and particularly social housing, for which, admittedly, there is a great need all over Australia.
Does Mr Albanese not know or does it suit his argument not to recognise that Bob Hawke and Paul Keating were the first Australian leaders to employ economic rationalism — they were the first true disciples of Margaret Thatcher?
They were Thatcherites through and through, they introduced Free Trade Agreements, globalisation and the ‘market economy’ to Australia.
It was under their government that we started to see the demise of the Australian manufacturing and food processing industry — all in the name of being ‘world competitive’.
It was also the start of a deliberate campaign to reduce the political power of agriculture in Australia.
The Story so Far.
The question that should be asked is whether large swathes of wheat growing land in Australia and particularly in Western Australia will be viable in the future? Because if the answer is no, then now is the time to start looking at the ways and the means for restructuring Australia’s wheat belt.
There are two conflicting forces at work. Two opinions based on two areas of science:
1. Soil amelioration is becoming popular in Western Australia in an effort to improve crop yields. It is expensive, in some cases very expensive. There are yield gains to be had, how long the gains last is open for debate because they vary site by site. There are also problems particularly with soil stability and structure.
2. Climate scientists are predicting falls in crop yields in Western Australia over the next twenty years to levels which I predict will make it uneconomic to grow wheat given the year on year rise in costs and the decline in the real price of wheat over the last fifty years.
Lang Hancock’s 1979 Queensland-Pilbara Rail-steel Proposal comes to life in 2020.
On the morning of Sunday June 11th 1975, passengers aboard Lang Hancock’s 70th Birthday “Wake Up Australia!” jumbo-jet flight will be flying due east from the Pilbara towards Alice Springs over some of the most desolate country in the world. Below them will be the proposed route of the Pilbara-Queensland Railway — the visionary scheme which may within a decade forge a link of steel across the north of Australia. Here Lang Hancock puts a compelling case for a project which can do at least as much for Australia as the Snowy River Scheme; and without soaking the taxpayer.
‘We have our heads well and truly in the sand. How do we dig them out?’
Lang Hancock in 1975.
Now in 2020 Lang Hancock’s dreams are well on their way to becoming reality.
Lang Hancock discovered iron ore in the Pilbara in 1952 and defied the predictions from officialdom that Australia would be importing iron ore by 1965, instead by that time he was supplying half the Japanese market. By 1975 Australia was the biggest exported of iron ore in the world.
Here are a few extracts from a presentation by a man with an extraordinary vision: Continue reading “PROJECT IRON BOOMERANG”
Success is not final, failure is not fatal: it is the courage to continue that counts.
There now seems to be a general consensus within the community and especially within the agricultural community, that Australia’s reliance on China has lulled us all into a false sense of security. We have been complacent. We have been happy to accept the contribution China has made to our standard of living by making available to us a range of ‘goods’ at prices that have been more than acceptable.
We have been more than happy to receive their tourists in their tens of thousands and a similar number of students without whom some of our universities, especially the regional ones, cannot manage. There could well be cold economic winds this winter on some campuses.
China has infiltrated our lives to the extent that there is an argument that we cannot now manage without them.
But manage without them we must; we must change. China’s aggression towards Australia is a sober reminder that they are a communist totalitarian regime intent upon the control and subjugation of others including Australia.
“An economic rule states that one should never underestimate the inability of free marketers to use common sense,”
K J Galbraith 2006. Lincoln Journal.
One of the interesting aspects of the current debate on the behaviour of China towards Australia, after Australia asked for an enquiry into the source of Covid19, is that many of those who are well known as journalists and commentators, and even some hopelessly naive Australian politicians, and we have our share of them, have shown most clearly that they know little to nothing about the art of negotiation or as many of us know it by another name ‘bloodless warfare.’
It is well known that when it comes to selling their wares farmers around the world are weak, some weaker than others. It is also well known and oft quoted the statement by President J F. Kennedy “The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways.” These days we would say ‘person’ but the statement remains correct. The question is what have farmers done, particularly in Australia, to redress what is an iniquitous situation?
Since I started this look at China and our reliance on them for some of our vital goods and equipment, as well as our reliance on them to buy our raw materials like coal, iron ore, beef and wine; the relationship between Australia and China has deteriorated considerably.
The outburst by the Ambassador of China, threatening our beef, wine and tourism relationships, simply because our government made a valid request that a pandemic that has brought this world into lock-down should be investigated and the source found, was nothing short of Imperial bullying from the Middle Kingdom.
The United States sent its war ships into the South China Sea a few days ago. Whether in retaliation or not, reports are that China has sunk a Vietnamese small boat, probably fishing; has rammed boats from Malaysia and locked its radar onto a Philippine warship, which is hostile and usually means you are about to be fired on.
This means that China is quite prepared to escalate tensions in the South China Sea in an effort to distract the world away from asking the question China must answer regarding the origin of Corvid19 from Wuhan.
It must be determined whether Covid19 came from the wet market, or escaped from what appears to be a very insecure laboratory in Wuhan. China owes that information to the world.
In 2018 Australia imported goods from China to the value of US$57.7 billion or A$77 billion with an average exchange rate of .75 That is nearly $6.5 billion a month, every month.
It came as a shock to almost everyone to learn recently that we import over 90% of the medicines we use and most of them come from China and America. If China doesn’t make the final product they do make many of the ingredients. This alarming fact may never have come to light without the outbreak of the COVID19 corona virus. If China stopped supplying us and or America with medicines, what would we do?
We no longer live in a world of ‘It can’t happen here’ Because we know it can. We rely on China for so much; over US$13 billion in electrical goods — that must be most of our TVs and phones surely? Is this a danger to our independence and sovereignty?
In 2018 the National Farmers’ Federation of Australia, set a goal for Australian agriculture to achieve production at the farm gate worth $100 billion by 2030. The production in 2018 was some $57 billion.
This is what I wrote for Episode 1 in The Global Farmer in December of last year:
That ($100 billion) is an increase of 66.6% on the production of 2018 or an annual increase of about 4%, and presumably, though they haven’t said as much, they all expect the producers to make a profit every year— which is more than they do now — but they don’t tell you that.
There are some truly grim truths about the financial ill-health of Australian agriculture and they are all produced by government statisticians and the Reserve Bank of Australia.
I then go on to dissect agriculture in Australia as it is now, warts and all. I look at debt levels and question whether they are sustainable. I note that as farms have got bigger, productivity has decreased and debt has increased. Skills are being lost at an alarming rate.
Cereal yield increases are not keeping up with inflation and the real value of wheat is declining and according to research in 2019 our producers have high costs and low yields when compared to other countries. Cereal farmers in the low yielding areas are having difficulty making a profit year on year; some if at all.
The statistics are blunt and uncompromising. They are the sort of numbers that not many producers like to recognise in public, but they are true and factual and researched by the profound Ben Rees, an Ag economist and farmer with over 50 years experience of agriculture and economics; Ben tells it as it is.
It would beneficial and help with understanding the perspective of this article which is Episode 2, to first read what I wrote in Episode 1 in December 2019.
This article may also at first glance seem to be at odds with what I have written recently, regarding the $18 billion, we are spending on imported food every year—but it isn’t, the reason being that what is discussed in this Episode is food which is surplus to our requirements in Australia, at least at the moment.
The population of Australia will increase by about 300,000 a year or 3 million by 2030 an increase of 12%. Unless production increases, exports will decrease as we feed more people and food imports will increase.