Multi Peril Crop Insurance

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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.

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WHY IS IT AUSTRALIA DOESN’T CARE ABOUT THE DROUGHT.

Prologue

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.

During the week I had this web address sent to me.

If you haven’t seen it, do so now, before you read what follows.

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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’.

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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!