Why only assist the farmers.



Now lets put things into prospective.

Many farmers are 2nd and 3rd generation, paid nothing for their farms, amassed millions in debts yet are the only ones who get assistance in hard times. They get hand outs when it rains too much too little or not at all and many make a killing in good times yet the businesses that rely on farmers to survive, my butcher shop included, fruit & veg another get no assistance what so ever in harsh times.



You see consumers have a budget and allocate $x towards meat and produce and if these become un-affordable they seek an alternative like tinned and frozen food or imported seafood. Yet for me to stay competitive I have to cut margins and staff just to survive working 14hr days for weeks on end at times all because the farmers have emptied the hand out jar.



Another burning issue is local meat prices. You see the reason we as consumers pay so much at times for our prime beef or world-class lamb is because our poor farmers are constantly seeking better prices from the overseas market. You see as a nation our farmers over produce to the max and rely on exports for their survival

(70% of our meat goes overseas) yet the farmers who pick and choose when and where to sell their spoils are the ones who also get assistance in bad times while we, the locals who are trying to provide for our own consumers and families get zip!



So the next time you think POOR FARMERS spare a thought for the people who don’t get assistance, don’t chase the export dollar yet rely on this protected group for their very existence and if we go broke I can assure you there is no buy out offer for us we just loose our family home.

rehctub, similar deal when there is a natural disaster. The uninsured person whose home burns down on it's own is unlikely to get serious help but if lots of their neighbours places burn down as well then help is likely to come not just at the community level but individually.

Sometimes our help is not well thought through.

R0bert

yes Robert I agree however this assistance usually comes from the people within the community rather than the government it's self. Unless of cause it is the horse racing industry whereby the government stands to loose millions. Evidence of this is the fuss over the recent horse flue. Funny how it took little time at all for total damage control procedures to be implimented yet it took at least a week for the cyclone victims to get relief.

You may think I hate goverments but acctually I don't, I just hate the fact that all people are not treated equally. Kids, working or non working adults, single mothers and pensioners alike.
As a business owner and the owner of rental properties I pay the ambulanve levey three times. Once at home, once at my business and once at one of my units. This further frustrates me because I have subscribed to the ambulance for 30 years. I have no problem paying once like veryone should but why should I and several others have to pay more than once. Remember we are also the ones that contribute to the system and receive nothing in return because we work too hard. At times I feel like ringing the ambulance for my business because we had a quiet day, of cause I would'nt because that would be a waste of valuable resourses.

All I have ever wanted is a level playing field, the money pit to be shared to all equally and some support at the end of my working time but if I choose to continue to work long hours I know that the only way for me to get anywhere is to minimise my taxes wherever possible. Very unfair to all PAYG employees.

rehctub

For most of my life I lived on the land and never once did I receive any Government assistance. Also in the drought years when Paul Keating promised assistance to farmers, one of my daughters then living on a farm found they weren't eligible for assistance as they had only purchased their farm 3 years previously and therefore hadn't yet experienced a 'normal' year to show by figures that they were drought affected. I mention this to explain that often what politicians promise and the media publish doesn't eventuate.
I agree however, with previous writers that farmers as such shouldn't receive any special benefit. I smypathise with the view of the butcher, as one of my grandfathers was a butcher, and my first job after leaving school was to work in a butcher's shop. However, it must be realised that the price of cattle has not kept up with the price of other goods. My father sold X amount of cattle to buy his first Holden car. I would now have to sell 3 times as many cattle to buy a Holden Commodore.

"You see consumers have a budget and allocate $x towards meat and produce and if these become un-affordable"

Now let me see. Farmers receive around 3$ a kg for lamb, 1$
a kg for mutton, throw in the rest of the carcass, kidneys,
hearts livers, etc for nothing. Wheat up until this last
crisis was around 20c a kg. Milk around 40c.

Clearly what the farmer is paid has little to do with what
consumers are screwed for! When the average butcher earns
less then the average farmer, despite farmers huge investment
in land, machinery, livestock etc. I will take note.

"Many farmers are 2nd and 3rd generation, paid nothing for their farms, amassed millions in debts yet are the only ones who get assistance in hard times. They get hand outs when it rains too much too little or not at all and many make a killing in good times yet the businesses that rely on farmers to survive, my butcher shop included, fruit & veg another get no assistance what so ever in harsh times."

There are lots of issues in here that can be addressed, but before I do, I make the point that by targeting support towards the bottom (or top if you look at it that way) of the supply chain, then essentially benefits pass all the way through the economy. Support to farmers allows them to keep their stock fed and watered adequately, so that they are in fit condition to go to a butchers shop. It allows them to continue to buy inputs from the local community, with the financial effects of this continuing to flow through the community.

Drought support is now provided to businesses in EC declared areas that supply to farmers. There is an arguement that supoprt should also be provided to those who depend on farmers for their livelihoods in other ways (such as those further along the supply chain). I make the point though that there are currently an awful lot of stock being sold for very little money. So your input costs should be getting cheaper, not more expensive. Granted they are likely to get much more expensive as that supply dries up. But I also make the point, that meat prices in particular dont seem to come down in times such as these where there is abundant cheap supply, so maybe butchers would be on a better marketing foot to justify higher prices if they allowed prices to drop when their supply costs come down

cont..

Most farmers DID pay significant amounts for their farms, but not always in the traditional way. Most inherited farms require that non-farming siblings be paid out (or else wills can be challenged in court), they also pay for the maintenance of parents in retirement, take far less than the standard wage for many years, all of which are ways of paying for the farm. Paying a large lump sum at title transfer is not the only way that things are paid for.

There are all sorts of arguments about supporting farmers.
However, it comes down to;

Do you want to eat ?

The alternative is to import our food permanently and what makes you
think it will be available when the crunch comes.
There is no way around this, either you subsidise the farmers in
drought years or you pay much higher prices in good years or take the
risk on imported food.

No ifs no buts, thats what you are up against.

So live with it !

I say I must agree Bazz,
We went shopping tonight at the local Woolworths. My wife picks up the best prices. Tin corn from China, Frozen beans from China, Fish from Thialand. All questionable quality. I Tell her put it back support our local farmers, otherwise we will be paying taxes to give them the dole.

Farms like most family business are transferred to children of the owners. Most shareholdings in Large companies are passed down to children. That unprofitable farms during drought, are passed down to children is not any different. It is just that unless farmers are supported they will become bankrupt and their farms are worth nothing. At leasat it is cheaper to keep them from unemployment benifits on land that during drought is worthless. At least Homes, business or share holdings are assets of value in a market.

The issue is NOT about government assistance. The issue is whether we have too many people in this country for the water supply available or whether we use the water supply we have in the most useful way or whether farmers and graziers have exploited opportunities available to such an extent that NOW they are over-extended.

The food chain literally starts with what is available from natural and renewable sources. When we over exploit what is available to make ever increasing profits (a fundamental basis of capitalism) and foolishly cultivate cotton and rice in areas which are clearly unsuitable for such purposes or cultivate crops that are inedible but do make a profit - be it a bio-fuel or whatever, then perhaps we need to think about starting to control WHAT people do with their land as a pre-condition before we give them grants to continue to degrade the land and the other natural resources that exist.

garpet,
"cultivate crops that are inedible but do make a profit"
there's the rub, food prices have been too close to the cost of production for too long. Wealth outside the value of the farm has been hard to amass, and when prolonged drought hits the reserves just aren't available.
In the worst drought on record Australians aren't starving. When the drought breaks,what do you propose to do with all the food if inedible crops are disallowed.

Here comes the little "bash the farmers" brigade again. At the risk of repeating myself over and over.....

1. Cotton in particular is a DESERT plant. It need hot and mostly dry conditions to grow. Those conditions partiuclarly in NW NSW, and southern QLD are ideal. Cotton needs a certain amount of water, and is most productive under irrigation. It needs water around its feet regularly, but not higher up on the plant, particularly towards fruiting, otherwise you end up with boll rot (rotten cotton). Cotton itself is inedible, but cottonseed oil is used in cooking, and mash is used for animal fodder. And guess what, we need cotton for clothing. Got to be more environmentally friendly than oil-based synthetics.

2. Rice is also a summer crop that grows well in hot conditions such as in Australia. Rice growing is strictly regulated as to soil types etc, that wont leach heavily into the water table.

3. Both cotton and rice industries are leaders in research and development, both in resource management and plant health and production.

4. Biofuel may be inedible, but surely its better than using non-renewable fossil fuels (not to mention that if done properly, it should be carbon neutral).

5. Despite the fact that we dont use all of our primary production domestically, exports help to balance our trade terms, which are pretty dismal anyway. Farming impacts also extend heavily into metro areas (more heavily than most would care to admit), as was seen during the start of the drought, with lay-offs in Sydney and Melbourne (and probably elsewhere). There are great flow-on effects that usually are not taken into account when talking about assistance to farmers or the impact of the industry in general.

garpet, I am not advocating production at all costs, although by saying to our farmers "if you cant make a living, then get out" most people ARE advocating just that. Most long-term (read family) farmers take a long-term approach to their business, and take the impacts of their actions on the future productivity of their land into consideration

"When we over exploit what is available to make ever increasing profits (a fundamental basis of capitalism)"

Actually alot of the drought problem is because market capitalism
is not working, the major problem then being soil degradation
etc.

Fact is that Govts can't legislate for rainfall and science
can't accurately predict it yet either. This year, good rainfall
was predicted, it did not happen in many areas.

When farmers then try to unload stock, market prices collapse
because of too much supply and not enough killing space.
Meatworks could easily double shifts, if they had the labour,
but of course that is not available. So farmers sit on livestock,
go broke trying to feed them, the stock cause the soil to blow
away.

A market win-win solution would be to fly in teams of slaughtermen
from say China, every sheep processed doesent need feeding, won't
cause the soil to blow away. Seasonal guest workers make perfect
sense in this kind of situation, but politics, unions etc, won't
let him happen. So taxpayers will have to cough up, given its
city based politics that is preventing the market from functioning
as it should.

Country Gal - thank you!

I am NOT a person who bashes anyone, rather I am someone who would like to understand and is dissatisfied with the spin that is provided by both government and various lobby groups. Tell me the facts!

That said I am delighted to learn that cotton is a "desert crop" that needs water at its root system as this is something I was not aware of. However if you would be kind enough to further my education just a little bit more then please explain WHY open irrigation is the way to go? I seem to recall quite a lot of work used to happen (probably still does) in places like Israel where they pipe the water directly to the root systems of their various plants in the Negev desert as a way of alleviating evaporation and of course conserving what little water they have. Is this an option in Australia? If not help me to understand why not?

As for rice farming I can recall with considerable clarity the rice paddies of south east Asia and indeed even places like Bali and elsewhere in Indonesia. If the tropical climate there, filled as it is with monsoonal rains is an advantage to them then I would dearly love to know WHY we farm rice in the south of the country and not in the tropical north of Australia where I would suspect the climatic conditions are similar.

I look forward to my continuing education in this matter

Garpet 1;
Didn't the Ord River scheme try rice but the Magpie geese
cleaned them out before harvesting and the project failed.
I have a recollection about that happening.

One of the problems with subterranian irrigation is cost per hectare for its initial installation. The crop above the ground needs to return substantial profit to make it worthwhile.

Assume such irrigation costs $10,000 p/h to install then 2,000 hectare on the average farm equals $20,000,000 to install. How many farmers have that type of capitol? How many years to pay it off from the return on the crop? Assume two major droughts every 15 years without water and no return and there is need of a major upgrade of the system another $2,000,000 plus accruing interest on the loan.

I feel it is better to give grants to assist farmers during droughts than have them flow into the cities looking for employment, and large capitol debts they will never be able to pay.

Bazz if Philo is right and each farmer would like to plant 20.000 hectares with rice then there had to have been a hell of a lot of magpie geese up there on the Ord River System.

As for 'capitol' - no wonder the farmers can't get it - I can't even find it in a dictionary!

garpet, some cotton is grown on sub-surface drip with varying results. The capital expense of installation and running costs(filtering and pressurising) outweighs the small efficiency gain over in-furrow irrigation on the predominately clay soils, with little deep drainage, found in cotton growing areas.
Cotton is a large plant which forms a dense canopy entirely shading the soil. Most of cotton's production(and water use) occurs during the closed canopy period limiting the advantage drip systems have in more open settings like vines and orchards.
The real clincher is water reliability. To pay off the infrastructure takes lots of good seasons so on a risk management basis only a portion of a irrigation farm using general(low) security water could be converted.

Rojo, thanks for that new piece of information.

If the growing of cotton is both so risky and so expensive as well as being so water intensive then I wonder why we do not use a risk management technique and leave it to those, say on the Indian sub-continent (or anywhere else on the planet for that matter) where the climatic conditions are right?

People is those locations seem to be able to grow the stuff, create the cloth and pay their workers and still make a profit without needing government assistance that is paid for my everyone else in the society that earns money and pays taxes. They also do not seem to leave their river systems so depleted of flows that there is inadequate water to drink, increasing salinity etc etc.

If the world of business is as advertised, then it is a dog eat dog world and competition is king.

It is becoming apparent that in Australia we are not competitive unless we are subsidised - and that of course is not competition at all.

garpet, it's risky to grow anything, so the best you can do is minimise the risks. The reason why we should grow cotton alongside indians or whoever, is because we are one of the most water efficient producers on earth(second only to isreal) and hold world record yields. Irrigated cotton yields in Australia are approx 3 times the world average. If your logic was correct we should be the only ones growing cotton.

garpet, I missed the subsidy comment, sorry. Irrigators have been able to access exceptional circumstances assistance for the first time in the past year. Because the drought is exceptional. To find fault in that is pretty tough. Not all irrigators, cotton or otherwise, are eligible so it couldn't be called a subsidy for growing anything. And it certainly isn't a production subsidy because there's not much growing going on.

53% of the worlds cotton is subsidised. India subsidises cotton production, as do the US, China, Greece, Spain, Turkey, Brazil, Mexico and Egypt.
To put it into perspective the US subsises its cotton producers to the tune of $4.2 billion.

Australia has no production incentive subsidies whatsoever. Cotton in Australia is grown purely on it's merits, competeing with subsidised production from other countries. Successfully.

"It is becoming apparent that in Australia we are not competitive unless we are subsidised - and that of course is not competition at all."

Actually not so. Australian farmers are known to be some of the
most competitive and efficient in the world. If you look at
farmgate prices for lambs, sheep, beef, various grains etc,
take a State like West Australia which is very export focussed,
you'll be hard to find anywhere cheaper, better or more
efficient.

Alot of the problem lies with people who value add our products
and the rules imposed on them by city based voters. Take
payroll tax, a tax on exports. Why not wipe payroll tax
for exports, if you want to help us rather then hinder us?

Yup, the Murray Darling is a mess, but again most of it imposed
by Govt rules and regulations. I'm told that irrigators have
to pay for water, even if they are not allowed to use it.
So if they get a bit of that money back, good luck to them.

yabby,
between fixed water charges and shire rates, govt bodies claw that money back and then some.

Garpet, to add to rojo's comments re cotton production, places like India and China can produce cotton, pay workers, convert to goods and still make a profit, only because they rape the environment, have little or no restrictions on chemical usage, have workers living in huts on the edges of fields for months at a time, and employ child labour in both the farming production and manufacturing process. Because we in Australia require a higher standard from both our farmers and our manufacturers, it costs us a lot more to produce the end product. In fact, because our farmers can produce and profit from that production 95% of the time, and still meet all of our societal expectations about environmental management, and human/workers rights, I suggest that we do very well indeed!

I note the comments about the Murray Darling system, lack of water and costs to irrigators.
1. MOST of the dam systems in the rivers were put in place to facilitate irrigation. So, the logical conclusion is that irrigators (who have mostly paid for this) should be able to use them. There have been overallocation problems in some valleys, and these need to be addressed equitable, as producers have generally paid good money for the land based on its access to irrigation water. Decent compensation needs to be paid in these cases, as the overallocating was done by governments in the first place.

2. If we didnt have the dam systems that were set up for irrigation, the entire Murray-Darling would now be dry. This was certainly the case in other times even within white settlement. Its not the fault of the irrigators, its the lack of rain. The environment actually naturally dries up from time to time, and doesnt seem to suffer any long-term ill effects as a result (it happened for 000's of years before we put the dams in). If you find a 90yo from the Riverina, they will tell you that in the 1920's you could walk across the Murray (before the Hume Dame was built).

3. Irrigation water charges in NSW are made up of fixed rate and usage rate components. The fixed rate part is payable no matter what, and is designed to cover State Water's ongoing infrastructure costs. I dont have an issue with the concept (user-pays), but in exceptional times such as now there needs to be some kind of relief, even if its a deferral of the charges until the next year when a 100% allocation is able to be received (ie defer it until there is a least the production there to pay for it). Have a look at the State Water website (www.statewater.nsw.gov.au), and you will see that over time the fixed rate charge is coming down (a good thing, although it is still something like 50% of the total costs), and that the user-pays system has been developed to the extent that farmers completely cover the costs of water delivery for irrigation (and pick up some of the tab for what the "environment" gets too, though arguably this should be the taxpayer's area as its a "public" asset).

Instead of cotton wouldn't hemp be a more diverse crop to replenish the soil and produce over a hundred useful products including fiber and medicine?

I must confess that I dont know a lot about hemp production, its ideal growing conditions, or even by-products (apart from the obvious). I would certainly support investigation of alternative crops. My understanding is that attempts to commercialise he,p to date have been met with general government/community concerns over drug production and/or security. These would need to be addressed, although I also note that Tasmania manages to grow poppies for seed on a licence basis and quarantined farms, so no doubt a similar regime could apply to hemp. The other problem is one of market development and manufacturing process development, as well as consumer education and acceptance. You cant just say "lets grow something new" and expect it to work overnight. The rice and cotton industries have both steadily developed over many decades to get where they are now. But certainly worth examining the alternatives.

eftfnc, The primary reason it hasn't taken off in Australia is lack of markets and info on growing in our conditions. DPI trials have not be helpful from the info perspective. http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0005/74048/Low-THC-hemp-in-New-South-Wales-Primefact-211---final.pdf

From a marketing view, world sales of hemp in 2002 were $250 million compared with cotton at around $40 billion. The market liquidity is of great concern as a prospective grower. Canada's (where hemp is a "revolution") total hemp exports in 2005 were 124 tonnes valued at $188 000 ($1500/t). Australia exported 500 000 tonnes of cotton in 2005 for approx $1 billion ($2000/t).

Australian farmers will happily grow the most profitable crops. To my knowledge there just aren't any processors/buyers up and running here. No-one even getting expressions of interest from potential farmers.

Certainly the most promising hemp product is the chemicals (the legal ones) but at this stage they are not commercial on a large enough scale to drive an industry. The seed is often touted for its nutrition and oil content etc etc however yields in Canada suggest yields of 800kg/ha which could produce 200 litres of oil/ha. Compared to canola at 2t/ha or 800litres of oil/ha. Even cotton produces 3 tonnes of seed/ha for 600litres of oil. The big drawback for hemp is you have to choose: seed or fibre. For best fibre quality the crop is harvested prior to seed maturity.

Anyway thats all a bit technical, but as an irrigator (when water is available) I want to get the best return I can from the available resources without too much risk , and so investigate alternatives as best I can.