Has China got Australia by the short and curlies?

‘When you’ve got them by the balls their hearts and minds will follow.’

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Theodore Roosevelt 1858-1919
Theodore Roosevelt.
Australia and its sophisticated agricultural industry have to decide whether they want to be a feeder of others, or be fed by others. Don’t laugh at that. Of course the world can feed Australia— it’s already started as we increasingly become more reliant others for food. We have no more people in this country than there are in a couple of  big Chinese cities and we are an attractive proposition to feed, if only for access to our resources and for what food we can produce that others can’t. I read somewhere recently that China would only have to increase its horticultural production by about 3% and it could feed Australia. Think about that and the global fresh food trade. There are Egyptian oranges for sale in my town. So how important are we to China and how important is China to Australia? You may be surprised.

Continue reading “Has China got Australia by the short and curlies?”

Free Trade Agreements – Are they an Oxymoron?

Stop Press.

Why do we put up with governments who do nothing for our national security?

It is Friday March 3 2017 at 08.00 hrs. On ABC AM this morning at about 10minutes 29 seconds into the programme, Andrew Davies from the Australian Strategic Policy Institute, announced we only have about three weeks supply of petrol in store in Australia — three weeks!! (search in the archive for the AM programme of March 3, otherwise you will get today’s programme) He raises the possibility of any tension between America and China could close off the sea route through the South China Sea and so cut of our supply of fuel from Singapore, on whom we are almost totally reliant. The story gets worse because it is not a new problem, there is a story in The Conversation from 2013 which forecast an impending fuel supply crisis unless the government of the day took strong action. It didn’t happen. The point needs to be made made it wouldn’t need a full blown war to disrupt fuel supplies, just a disagreement between the world super powers and the shipping routes that service Australia could close and we would run out of not only fuel but everything we import by sea.

Continue reading “Free Trade Agreements – Are they an Oxymoron?”

Is the Australian wheat industry finished?

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Two reports from the Australian Export Grains Innovation Centre (AEGIC) on the competition Australia will almost certainly face from Ukraine and Russia in the wheat markets of the future should be compulsory reading for all wheat farmers in Australia. They provide a sobering analysis of the wheat market and will force the sensible to seriously contemplate their future.

 

We live in a fantasy world, a world of illusion. The great task in life is to find reality.

Dame Iris Murdoch 1919 – 1999.

Stranger than fiction.

The post harvest stories, some of them as close to fiction as one can get without the author claiming to be a novelist, have recently appeared in both the national and the agricultural media. Minister Joyce is on the front foot; that is when it isn’t in his mouth, determined to persuade the Australian electorate, through a compliant media, that all is well in Australian agriculture and that the emerging Right in politics in Australia (Hanson) and around the world (Trump and Brexit), has nothing to offer to those who live outside the ever increasing majesty and grandeur of the State capital cities of Australia.

I have used the words ‘majesty and grandeur’ quite deliberately. Around Australia billion of dollars has been spent on State capital cities, much of that money is for the enjoyment and the pleasure of those who live in those cities. As we shall see, as billions has been spent on shoring up the city vote with new sports stadiums and the like, the infrastructure vital to agriculture has been allowed to deteriorate and in some cases decay to the extent that we are no longer world competitive — we can no longer, at times, but ever increasingly, compete for markets around the world.

The Nationals heartland is in rural Australia, it’s the country folk who get them into parliament. In WA they did a deal with the Liberal Party, which put the Liberals into government and some National members into key positions in the WA Government. Again, and have we seen it too often, a minority determining government policy? The Nationals are now worried that Hanson, the Hunters Shooters and Fishers Party and maybe others will replace them in Parliaments around the country and in so doing, replace them in holding the balance of power.

Minister Joyce wants everyone in the country to believe that record high prices for livestock and an ever-increasing demand for wool are the beginning, as one journalist put it, of a ‘golden era’ for the farmers of Australia.  Coupled with what some are calling a record harvest, what could possibly go wrong for Minister Joyce and the wheat farmers of Australia? Well this for starters. Continue reading “Is the Australian wheat industry finished?”

The Farmers in Europe are Revolting

There is a paradox, an absurdity of enormous proportions happening in agriculture in much of the Developed world. In spite of the US$486 billion a year being paid to farmers in the 21 top food producing countries in the world – heavily subsidised farmers in the European Union (EU) have embarked upon a civil disobedience campaign, some of it has been violent and massively disruptive to the rest of society. Their problem is that in spite of being paid over US$100 billion a year in subsidies, they are going broke. Their costs are greater than their returns. Across Britain, France, Germany, the low countries – everywhere in Europe, mainly family farmers are saying ‘enough is enough.’  They are  taking to the streets and the supermarkets to show those who buy and consume the food what the difference is between what it costs to produce food, what the producers are being paid for it and what the consumers are paying for it at the supermarket. There is a sober lesson here for Australian agriculture as the value of the food we import goes up every year it is mostly from countries who subsidise their agriculture. According to the Worldwatch Institute, ‘Agricultural subsidies are not equally distributed around the globe. In fact, Asia spends more than the rest of the world combined. China pays farmers an unparalleled US$165 billion. Significant subsidies are also provided by Japan (US$65 billion), Indonesia ($US28 billion), and South Korea ($US20 billion).’

The value to Australian agriculture from Free Trade Agreements (FTAs) can be put into perspective when we contemplate having to compete against the home grown subsidised produce of much of Asia. If their ‘home grown’ produce, for instance beef, is subsidised, then to compete we have to be price competitive with a subsidised product – can we compete with subsidised agriculture? Only if we can sell at a price that is competitive, which may mean lower, than the subsidised product. For decades, since the seventies, Australian farmers have been duped by politicians of all colours and from agriculture, that ‘market forces’ and a ‘free market economy’ will eventually prevail. Fig 1 and Fig 2 (later) puts a lie to that propaganda and shows what it has cost. To compete we can see that Australian farmers ‘chased’ the ‘get big or get out’ mantra of the 70s with debt. More of that later.

As a child growing up in post-war Britain anything from Australian from wool to meat, to apples both fresh and dried, dried fruit and the delicious Sunday treat of Australian canned peaches, was a sign of absolute quality. The only exception to that rule was the processed cheese we were served in the army in the nineteen fifties. I am sure it had been imported during the war. Second World War, I think – maybe?

How times have changed. Britain is part of the EU, the European Union. This is what the EU say about themselves:

The EU is an attractive market to do business with:

  • We have 500 million consumers looking for quality good
  • We are the world’s largest single market with transparent rules and regulations
  • We have a secure legal investment framework that is amongst the most open in the world
  • We are the most open market to developing countries in the world

That is a proud boast and if you look at the link you will see the truth of it. They are indeed a powerful union – even a nation. To protect their agriculture the EU pays their farmers subsidies amounting to about US$100 billion a year.

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The team from Copa – Cogeca – Brussels.
In ‘Farming on Line’  a UK farming journal came this alarming news on Wednesday 29 July 2015. Copa and Cogeca warned at the EU Milk Market Observatory meeting today that the EU dairy market situation has deteriorated rapidly in the past 4 weeks, and without EU action, many producers will be forced out of business by Winter. Speaking at the meeting, Chairman of Copa-Cogeca Milk Working Party Mansel Raymond said “The market is in a much more perilous state than it was 4 weeks ago, with producer prices far below production costs. It’s a critical situation for many dairy farmers across Europe”.

Who or what are ‘Copa’ and ‘Cogeca’? ‘Copa’ was formed in 1959 to represent farmers within what we now know as the EU, it had 13 affiliates at that time. It now speaks in Brussels for sixty farmer organisation’s within the EU and another thirty six affiliates like Norway and Turkey, outside of the EU, but in Europe.

Cogeca? Straight off their website : On 24 September 1959, the national agricultural cooperative organisations created their European umbrella organisation – COGECA (General Committee for Agricultural Cooperation in the European Union) – which also includes fisheries cooperatives.

COGECA’ s Secretariat merged with that of COPA on 1 December 1962.

When COGECA was created it was made up of 6 members. Since then, it has been enlarged by almost six and now has 35 full members and 4 affiliated members from the EU. COGECA also has 36 partner members.

So ‘Copa & Cogeca’ to our antipodean ears may sound like a dance from South America, is in fact a very powerful agricultural lobby in Brussels and the Parliament of Europe. Stuck down here at the other end of the world we tend to forget that Europe is now a bigger trading bloc than America and China.

Vive la France !

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French farmers are a passionate lot and in support of Copa & Cogeca, last month on warm summer days in the middle of the tourist season they dumped loads of animal manure in the middle of Paris and other cities. For those who don’t know what the machine below is, it’s a ‘muck spreader’. Normally filled with animal manure and coupled to the power take off on the tractor it ‘spreads’ the manure on the fields or paddocks. In this case it looks like it is being used to ‘clean’ windows – on a bank perhaps?

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Continue reading “The Farmers in Europe are Revolting”

Live cattle exports – Is there a future?

With yet another report of Australian cattle being mistreated in a foreign slaughterhouse, this time in Israel, the question must be asked whether the export of live animals from Australia is sustainable? Not only is it sustainable as far as numbers are concerned, particularly following the dreadful drought in Queensland and New South Wales, which has decimated numbers . We need to consider that between February 2012 and June 2015 there have been sixty ESCAS Regulatory Compliance Investigations. All have been or are being investigated.   The Federal Dept of Agriculture, Food and Fisheries (DAFF) who pick up the bill at present, have served notice on the exporters that they are going for cost recovery. In other words the exporters are going to pay. This is government policy throughout Australia—the user pays. No other country involved in the export of live animals has an Exporter Supply Chain Assurance scheme (ESCAS) type scheme.
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A common sight in Vietnam. How do we stop generations of habit? Only the mode of transport has changed. The animal is alive and destined for some village somewhere far away from ESCAS.

The Australian Livestock Exporters Council (ALEC) CEO Allison Prescott has been telling the international press that a significant investment is being made in building and upgrading slaughtering facilities and feedlots in Vietnam and exporters from Australia were expecting the trade between the two countries to continue to grow into a long-term and sustainable market. The question must be asked, who pays for the upgrades? And where are the cattle going to come from?

Continue reading “Live cattle exports – Is there a future?”

This little Piggy – #2

It’s all a load of pigs.

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I thought the Federal Minister for Agriculture, Barnaby Joyce, might have a view, which he could share with us regarding the alarming statistic that 80% of all processed pig meat consumed in this country is imported. I was wrong.

I thought he might, together with his state counterparts, also have a view on the plague of  wild pigs, some twenty million many say, that roam this land and by their very existence threaten our major livestock industries. I was wrong.

I accept that in spite of what I have written those who administer agriculture in this country don’t know or don’t care or both, about the domestic pig industry and threat feral pigs present to our livestock industries.

Preamble.

It would be easy, when reading what follows, to conclude that as the author, I am suffering from an acute case of self-righteous indignation because nobody in government, anywhere in Australia, has responded in a positive way to my original article and personal letters. So before anyone has such scurrilous thoughts, I should explain myself.

I understand that it is in the view of the Australian government, as demonstrated by their actions, that it’s easier or they are more content, paying interest on the money the country has borrowed and continues to borrow, in part to pay for the shortfall in our balance of payments, that is we import more than we export, than pay that money to Australian farmers so that this country can be where it should be, self sufficient in food.

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Compiled from: ABARES Agricultural commodity statistics 2014 Table 7 by Ben Rees. The difference between the Trade balance and B.O.P is net income flow. Net Income flow comprises net flows of interest on debt , dividends and transfer payments.

I also understand that this is a free country and that Coles and Woolworths who between them control 80% of the food retailing business are free to roam the world seeking the cheapest food they can get their hands on so they can continue their price war with the objective of increasing their respective market share, so they are part of our balance of payments problem. It is quite evident they would rather do that than support the Australian pig industry, so that it can employ and deploy, by the size it could be, the latest in technology and science in the world of pig meat production, from genetics to processing. The rise in food imports and the decline in food processing in this country I have written about before —but here it is again in case you have forgotten. Trends in Australian food trade.

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Stats ABS. We are always ready to believe our own propaganda. Food exports, whether we like it or not have been falling, imports have been rising. Food processing in this country has been falling.

I will also show in a later article that not only China, but many countries within our region, like us, import thousands of tonnes of pig meat from the EU, America and Canada, when we in Australia, as it were, are on their doorstep and desperate to grow our export trade.

Am I being dramatic?

It would be easy to construe that I am being a bit dramatic when I write about the threat wild pigs present to the livestock industries in Australia. I deal with this matter specifically later in this article — there is just one thing I would like to add, well two really. I have twice seen, first hand, the devastation that Foot and Mouth disease can cause – both times in the UK. The first time when I was about 13, the family put a barrier across the narrow lanes leading to the farm. There was disinfected straw everywhere even the crows were viewed with suspicion. The closest outbreak was five miles away. The fear in my family was palpable. Their dairy herd was their pride and joy and the sheep that grazed the mountains provided stability to the tenuous hold they had on their post-war hill farm.

The second time was maybe twenty years ago, when I was working over there for a few weeks. An outbreak was traced back to northern England and within days they were searching for sheep and cattle all over Europe. Meat exports stopped and markets closed. The losses ran into billions of pounds. Both events, disasters, caused the massive loss of some of the best animal genetics in the world. When it was all over there was a debate on whether if it happened again, the UK would start vaccinating. I think it was decided it would be impractical considering the movement of livestock around the EU.

Some countries in South America do vaccinate and they have developed internationally recognised foot and mouth free zones and this has enabled them to continue to sell boxed beef into Europe. They continue to export live cattle to those countries, mainly in South America, which have F & M.

Writing letters.

I wrote to the Federal Minister for Agriculture. I didn’t get a reply or even an acknowledgement of receipt of my letter.

There are obviously more important matters of State and photo opportunities regarding national biosecurity than 20 million wild pigs – like Johnny Depp’s dogs. They are not coming back evidently, not the dogs, but Mr and Mrs Depp.

This was the letter I wrote to Minister Joyce: Continue reading “This little Piggy – #2”

The Future of the Australian processed food sector

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”

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 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”