Despite the 'doom and gloom' regarding the rise in grain prices over the last 6-12 months, at least farmers are now receiving a decent price for their grain. Over the last 10-20 years, farmers world wide have been squeezed by the ever rising cost of inputs, which has not been matched by an increase in commodity prices.
Perhaps the protectionist policies of some nations, along with various price support and subsidies, have corrupted the free trade in grain, and partially contributed to the artificially low prices.
However perhaps we are now out of this cycle, and despite higher input costs of fuel, fertiliser, and pesticides, farmers can look forward to a decent return on the capital invested in their enterprises.

Only an optimist could believe that the anti-rural, anti-farmer trends of the last 50 years are going to reverse because prices are rising. The problems are much deeper - increasing levels of corporate control of agriculture, farmers locked into industrial systems that require high and expensive inputs (and investment) and acceptance by farmers of declining incomes even while productivity has increased. If the Australian farmer and rural community are not going to disappear - a very real threat in the time of climate change and peak oil - they are going to have to look at a completely new way of doing business and they are going to need the support of governments and urban communities. Climate change and peak oil are threats - we may see a farming world where corporate farming systems dominate, where genetically engineered crops ensure that farmers become even more like serfs to corporate masters, where only massive economies of scale across diverse landscapes can succeed. Or it is an opportunity - to get out from the current unsustainable and farmer unfriendly system - to develop sustainable and diverse farming methods, to reduce reliance on oil, reduce greenhouse emissions, increase sequestration and to promote local production and sale of food, to involve communities in the food industry rather than relying on monopoly retailers to buy ones crops.
Food is going to become more expensive. The real question is will it be the farmers that profit or Woolies, Coles, Bunge, Cargill, ADM. As a consumer, I will make my preferences clear - farmers need to do the same.

Hello Jim,

Why is it legitimate for a bank or grocery store to pass on their costs to borrowers or consumers while a farmer remains fundamentally a price taker?

It is of course the reality of many farmers selling to few buyers and on the other hand few sellers and many buyers.

I have always considered a role of Governments to be destroyer of monopolistic situations.
So rather than calling for a 'new deal' for farmers I think it more productive to call on Governments to do their job and ensure there are more buyers than Woolies and Coles and on the other hand more sellers than Woolies and Coles and the four banks.

And with big money calling the tune in Australia I wish you luck with that but worthwhile having a go.

This article needs some detail about how the farmers can be paid more and how they can make their land more sustainable. There is no mechanism for an average person to pay a farmer more. We hear how governments are city - centric. It is a democracy. The most votes are in the city.

Give me some solutions.

"Rewarding farmers for more sustainable practices will allow OUR CHILDREN to enjoy their desserts without expanding our deserts."

Its YOUR CHILDREN and the Rudd/Howard Immigrate-for-GST Ace-in-the-hole that are causing the problem. That's a sh$tload of GST and Carbon footprints all of whom will cut-loose of any attempts at energy, water or environment conservation as they CONSUME the Australian dream.

Anyone who talks of 'their children' and 'protecting the environment' in the same sentence is either a fraud begging for a looming world WAR over resources or a total ignoramus.

Oil will be $200 per barrel by 2009 and $400 within 5 Years. At that time it will no longer be a right to have more than one child or a right for governments to collect devalued immigrant GST dollars. Rudd hasn't got a clue. He won't see another term. Rudd will be viewed as just talking the talk. His pretence to intellectualism is just a Revelling in an increasingly corrupt GST while foolishly handing Australia to southern European governments via a shoehorned Republic-of-nefarious-opportunites. Rudd will be in power just long enough to see Australia sink into peakoil recession and chaos.

The moral of the piece? People in cities shouldn't tell farmers their business and if they want to have children they should pay the full environmental burden of costs of those children and the full price for farmer's produce in whatever way farmers choose to grow it. They won't be allowed to have more than one child because the truth is they could never afford all the cost externalities and anti-child laws will at last be in place to protect the environment.

If you want proof that Rudd is already on the slide, just look at the news reports that 'Australia has just got larger'. At $400 per barrel for oil the cost for searching new contiental shelf areas for more oil will be prohibitive. This news is a peakoil 'blind' and shows the Rudd Labor government already knows its in trouble.

Lotsa negativity here.
I've lived now in the Riverland for 20 yrs. In that time I've seen great change, local markets are full of homemade things, jams pickles etc all from local gardens.
In chasing a return thats worth the effort farmers have ripped out fruit trees, with the exception of vines for wine making, and still most growers work only partime on their properties. They all have off farm jobs.
One producer of veges has made a profit only once in the last 10 years, a shortage thru land use brought that about. It is nigh impossible to get woolies and coles to by direct from growers, food is shipped to markets and back again to be sold in anything but fresh condition, let alone the increased cost.
Before woolies and coles {BWC's} produce was bought by local supermarkets direct from farmers who offered product, this can no longer happen, there is no mechanism for buying local product.
Farmers abd food producers have always been price takers!
The thing that has changed is the porcety of buyers, and centralised distribution.
Oil prices will not change this, all will just cost more. Land is speculated on preventing growers from increasing their plantings, this aggravated by super funds and the prosperity of city folk and their desire to fulfill dreams to own land "in the country" perhaps to retire to.
Water is traded for profit frequently denying that water costs need to be retrieved thru agricultural output.
With the advent of wine production growers are still price takers and we import the fruit they once grew. Land is accumulated by corporations, the rest is broken up and sold for housing,and development that should not encroach on agriculture, we have so little of it.
what to do?
fluff4

I agree with Goeff. It's an irony that die hard Capitalists so hate the competition their cherished system absolutely relies on.
The deregulation of the dairy industry in NSW was the greatest obvious rort in modern times. In one bold move, 'inefficient' farmers -who had only managed to successfully support their families and their communities for thirty, forty or fifty years- were sent to the wall as farm gate prices were halved, Woolies and Coles instantly upped their profit margins and consumers were asked to pay more, not less, for their dairy products.
Although first last and foremost a democrat, I have to admit the system is far from perfect. As increases in efficiency reduce the number of people required to produce food for the rest of us to less than 4% of the voting population, politicians don't have to care about farmers.
The un- and under- employed have a larger voting bloc.

The farmers need to get closer to the final customer to gain a higher price for their goods, or develop brand names that allow higher prices to be charged, "Angus Beef" is a good example.

Prices are always determined by the customer, as a seller you can only set the asking price. To gain higher prices any business must communicate how it will add value to the customer to choose its product, selling to middlemen will always make this difficult. Some producers may find it easier to choose to delegate the retail sales process to another organisation, others will do this themselves.

I have to disagree with you Geoff on the governments role in dealing with monopolies; far from being the party to get rid of a monopoly, governments are the ones who give the monopoly license to be established in the first place, either directly or through regulation and approvals processes which limit competition. Banking is a classic example with the Four Pillars approach, and how hard is it to get development approvals to build another airport in NSW to compete with Macquarie Banks Sydney airport?? The first point of call for any budding monopolist or oligopolist IS the government to plead your case for the right to operate, and the support to keep competition out.