strategy – Global Farmer in Australia

The China Paradox and Wolf Warrior Diplomacy.

China buys 30% of Australia’s exports.

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.

Continue reading “The China Paradox and Wolf Warrior Diplomacy.”

Is the Future of Wheat Growing in Australia a Catch 22?

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.

Continue reading “Is the Future of Wheat Growing in Australia a Catch 22?”

China friend or ? Episode 2

Preamble.

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.

Continue reading “China friend or ? Episode 2”

Is China our Friend or ?

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?

Continue reading “Is China our Friend or ?”

Less than 30 days fuel and it’s not an election issue – Why is that?

Image result for picture petrol pump out of stock — Photo: Daily Mirror.

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.

Continue reading “Less than 30 days fuel and it’s not an election issue – Why is that?”

There will be no Australian wheat industry in 23 years time.

Image result for photograph of the Chapman Valley geraldton — Chapman Valley. Northern wheat belt Western Australia. The Garden of Eden.

In the last issue of the Global Farmer I discussed the need for change based on a strategic plan for the behemoth called Australian agriculture. It is not possible to look at the whole until the parts have been examined.

To start with the wheat industry is logical and relevant considering this is the time of year to review last year and make plans for and give a commitment to the next season and beyond.

The headline says it all, based on current trends, the wheat industry in Australia will be gone in twenty three years. If you are having difficulty in trying to remember what was going on in Australian agriculture twenty three years ago, it was five years after the wool price crash and we were all being told to get rid of our world beating merino sheep. That is how close we are to the demise of the Australian wheat industry. It won’t happen like the wool crash, for those who refuse to recognise the signs it will be a slow, painful and imposed exit.

Continue reading “There will be no Australian wheat industry in 23 years time.”

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.

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?”