“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?
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.
I wrote last year about the alarming and strategically dangerous state of our national fuel oil reserves, in as much as we hardly have any. Bill Shorten the Leader of the Opposition in a recent speech told his audience that, “Right now, we have just 23 days of jet fuel, just 22 days of diesel and only 19 days of automotive gas.(petrol)” He added that when Prime Minister he would fix it. The Prime Minister, Scot Morrison, has not mentioned the problem, maybe he doesn’t want us to know?
Both of our would-be leaders are more interested in the show-time of denigrating each other and so winning the upcoming election — the security of the nation runs a distant second to getting their hands on the keys to The Lodge and even better, Kirribilli House.
It came as something of a surprise to me the other day when I realised that my wife Lynne and I have lived in Australia for over fifty years — half a century! Most of that time in Western Australia.
As I write, it is Australia Day. For some there are parties and fireworks. For others there are protests, rallys and marches because they believe that today should be a day of shame, because it is the day that the British stole Australia from its indigenous people.
Australia Day is often heralded by ads about lamb and barbies being ‘Australian’. But what does it actually mean to be Australian? I am half Warlpiri and a mixture of Irish, Scottish and Welsh. My sons are of Warlpiri, Irish, Scottish, Welsh, Malay, Indian, French, African, Chinese, Scandinavian and German ancestry. My stepson is half Scottish and a quarter Mauritian. They are all 100% Australian. My husband and stepfather of my children is Scottish but calls himself a ‘Scaussie’. What we all have in common is a love for this multifaceted and beautiful nation.
My great grandfather’s grandfather was convicted of ‘robbing a soldier of his arms’, in 1832 in Kilkenny at the age of 21. He came as a convict in 1833. He was an Irish patriot fighting for his faith and people. In the current political climate I would not be expected to acknowledge and celebrate his life because I have a Warlpiri mother. Most of the self-identifying indigenous members of our community who claim to feel hurt by Australia Day being held on the January 26 would also have white ancestors in their family trees and may not even have been born if the First Fleet hadn’t come.
It’s a Monday morning in mid September in Albany, Western Australia. Albany is on the far south coast of Western Australia, it has a population of about 36,000, and is the main town in the Great Southern Region of Western Australia which has a population of about 60,000. It has a wonderful climate and is recognised as being an ideal place to retire, which is why I am down here working at trying to make the pension do the impossible. I wish Jesus was still around and he could tell me how he fed the 5000 with five barley loaves and two small fish. We would have to catch the fish because the price of imported fish not cheap in this fishing port, but cheaper than the exorbitantly price locally caught fish — that stuff really is for the seriously rich. Last week in the supermarket in this town which has a fishing fleet, the Barramundi was from Viet Nam.
“This is not the end, this is not even the beginning of the end, this is just perhaps the end of the beginning.”
The first three parts of this series ‘National Bank Bastardry’, dealt with the simple fact that the NAB seized over $9 million worth of the Cronin family assets to settle a debt to the NAB of just over $5 million. The Cronin’s assets were six farms (Chambejo Farms), including the family home. When the NAB seized the Cronin’s land they (the Cronins) had four farms on the market with Landmark. The seizure was unnecessary and according to every reference I can find, probably illegal. The law is unequivocal, the mortgagee can only seize asset(s) to the value of the mortgagors debt to the mortgagee, and the family home should only be seized as the last resort. The NAB ignored that ruling and seized six farms including the family home worth, according to the only FH valuation we have been allowed to see, some ~$8.5 million— an independent valuation $9.4 million both valuations well in excess of the debt. That didn’t stop the NAB — they seized the lot. There was a now famous court case Nolan v MBF Investments. It’s not unreasonable to assume that banks and receiver managers know of the judge’s determination in this landmark case. This reference also explains in detail what is meant by ‘duty of care’ as it applies to property sales. I have quoted this ruling many times in previous articles and neither the NAB or Ferrier Hodgson have replied.
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.
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.
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.
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.
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.
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.
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.
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 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.”