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The Forum > Article Comments > Milked-dry: government meddling is the problem for milk industry, not the solution > Comments

Milked-dry: government meddling is the problem for milk industry, not the solution : Comments

By Johnny Kahlbetzer, published 26/5/2016

The price of temporary water, on a market increasingly controlled by governments, has increased from $30 per megalitres to almost $300 per megalitres as a direct result of the water buybacks.

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So thatís the water story. But we can only watch with trepidation as the next instalment of government meddling is written. I refer to the pleas for more support for dairy farmers, regulation of milk prices and a levy to go direct to the milk producers. You donít need an economics degree to understand that such measures only put off the inevitable. Of course the plight of these farmers is very sad. It reflects the ancient conflict between farming as a business and as a way of life. When the business fails it takes families, culture and heritage with it. But empathy should not drive policy. I am reminded of my very first agricultural economics essay exactly 60 years ago, on the topic of price-fixing of farm produce based on production costs and a Ďfair profití. My references dated back to 1928! My conclusion then was that such policies must fail. Nothing has changed.
Posted by Tombee, Thursday, 26 May 2016 8:53:51 AM
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It's important to remember when reading an article like this that the author has no actual interest in the health of the Murray River, only his bank balance. Now it is possible for the two to coincide but in this case it's unlikely.

While it's true that the lower lakes were at times estuarine, the reality is the river run dry at times as well, reduced to a series of billabongs, and it also flooded. Now i'm sure the author isn't calling for a removal of all the barrages, locks and ways on the Murray-Darling? Maybe just the ones that wouldn't adversely effect him and his business.
Posted by Cobber the hound, Thursday, 26 May 2016 10:42:54 AM
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@Tombee " But empathy should not drive policy." how very un-Australian of you. What ever happened to a fair days pay for a fairs days pay. Risk and profits should be share thought the supply-chain and governments have a legitimate role to play
Posted by Cobber the hound, Thursday, 26 May 2016 10:49:53 AM
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Sorry that should have read a Fair days pay for a fair day's work.
Posted by Cobber the hound, Thursday, 26 May 2016 10:50:58 AM
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Hi Cobber

No doubt Mr Kahlbetzer, as a successful businessman, takes a keen interest in his bank balance. He also has a long running interest in the health of the Murray River, and particularly the restoration of the Murray River's estuary. Removing the barrages, or at least their adaptive management, would be a win for irrigators across the Basin, and also for the natural environment of the Coorong, Lower Lakes and Murray Mouth. He's been at this issue for sometime, as you can see from this letter written in 2011: http://www.mythandthemurray.org/wp-content/uploads/2011/07/Let_SA-Politicians_JK-_final.pdf
Posted by Jennifer, Thursday, 26 May 2016 10:54:34 AM
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The announced subsidies to dairy farmers is just another vote-buying exercise and looks more generous than it really is. $555 million of discount loans sounds a lot but in reality the subsidy will only be a small fraction of the loan amount. I agree with the author that the assistance package will make little long term difference to the industry.

The author is probably still laughing all the way to the bank following the grossly excessive price the former Labor government paid for Twynam's water entitlements.

He is nevertheless right about the stupidity of water policies that cost billions in lost agricultural production to support an esturine system that would be more healthy, if fed naturally by free water from the sea instead of by billions of dollars of our precious irrigation water.
Posted by Bren, Thursday, 26 May 2016 11:03:23 AM
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