Saving farmers from ‘climate change’

A short time ago I foreshadowed a post on the Government’s possible rescue package for farmers and farming communities suffering from drought. Since then the Prime Minister showed his power over the elements by bringing rain to the drought-stricken areas, reminding me of Bob Hawke’s similar demonstration of power shortly after he attained office in 1983, and broke the drought. We haven’t heard much more about drought in the last fortnight, but some aspects of what happened are worth reflecting on.

One is that the number of people working on the land has been declining for the past century and the decline continues every day. I drive a lot around rural Australia, and you can see the signs in the number of abandoned farm houses. It’s not that people are ‘deserting’ the land. Rather it is becoming more and more difficult to get a decent income from it without much more land and much more capital to begin with. A better-off neighbour will buy your land, but he won’t need your house — and no one is much interested in paying rent for it if you’re well out in the country. Australian farming (I’ll use that term to include all pastoral activity as well as agriculture) has been going through successive phases of aggregation and disaggregation since Europeans arrived more than 200 years ago.

The first part of the 19th century saw very large-scale holdings (250,000 acres, all leasehold) in New South Wales. After 1861 the process of closer settlement began, holdings diminished in size and the number of farmers increased greatly. But much closer settlement failed: the blocks were too small, it was just too hard to make a living, droughts and floods were as pronounced then as now, and the process of aggregation began again. It continued throughout the 20th century, and shows no sign of stopping. Around a third of the whole workforce was engaged in primary production at the beginning of the 20th century; it is a tiny proportion now.

More recently, there were 250,000 farmers in 1997/98, and 200,000 in 2010/11, only thirteen years later. That is a pretty substantial reduction. The family farm is being replaced by the agribusiness. Fine merino wool, for so long the mainstay of our prosperity, is much less important. Only a few graziers, well buttressed by the right land and reliable water, make a good living from it. Cattle have replaced sheep on much of the land. Wine production in export terms almost rivals the valuer of wheat. It is still true that primary production is important to us all — the great bulk of the food we eat has been grown in our country — but the numbers of people engaged in it just keep falling, in part because those who remain have become more efficient.

In that sense there is nothing very different between primary and secondary industry. The efficient ones survive and prosper, while the others go to the wall. Technology benefits some who can understand and acquire it, while others wonder and fall behind. There is nothing very different in what happens to industrial communities like Newcastle, Wollongong or Geelong, when major companies fail, or pull out, and what happens in country towns as the number of primary producers, and their families, fall. Shops close, real estate declines in value, banks leave, other businesses move to a more promising location, and so on.

I spent my first ten years as a researcher studying farmers and their politics, and I see what has happened with a lot of sadness. But it’s not anyone’s ‘fault’, and — I turn to ‘climate change’ — it’s not because of a ‘natural disaster’ in drought, the term Mr Abbott used to justify his rescue package. Droughts, floods and fires (and grasshoppers, and other unpleasant facets of country life) are recurring events in Australia, and the ‘drought’ that he was speaking of is of tiny consequence compared to the Federation drought and those of the Second World War and the Millennium. Wise farmers prepare for them as they can, by building dams, storing water, being light on their feet in moving and disposing of stock. Some are always in trouble because they owe too much to the bank, have to hold on to their stock, sell at the worst possible moment, and go to the wall. When I see the video footage of ‘drought-ravaged country I wonder how the farmer being interviewed got to his current predicament.

The point is that farming is always uncertain. You can have good years, a few great years, some poor years and some disaster years. You have to prepare for them. Farmers are always in a contest against Nature. It is worth remembering that even during the Millennium drought agricultural production remained high, mostly because the efficient farmers acted sensibly.

Yes, I know that the National Party has to show that it has some clout in Cabinet, but I would also be glad if Mr Abbott and his Ministers were more consistent in their approach to requests for help. The dry spell was in no sense a natural disaster. Dry spells occurred in the past and they will recur in the future. More effort ought to go into showing farmers how best to adapt and, if they can’t, then how to sell out to best advantage.


Join the discussion 11 Comments

  • Court Case says:

    Some clips, Don, from your posting include:

    “The family farm is being replaced by the agribusiness….

    Wine production in export terms almost rivals the valuer of wheat….
    Wine production in export terms almost rivals the valuer of wheat….
    I wonder how the farmer being interviewed got to his current predicament…
    More effort ought to go into showing farmers how best to adapt [to dry spells]…”

    As you describe transitional farming models – almost from small scale, family owned, cottage industry morphing to company, corporate, agribusiness models – it is really a case study for what is occurring in Australia today. Big Graincorp infrastructure, tinned fruit production, cheese factories, $3 Coles pricing for milk, unlocking more forests, the growth of big feedlots etc.

    It is a trend towards corporatisation where commerce and profits are of the essence. The old style family farm passing on from generation to generation is gradually receding.

    But when we hear reports, say of abattoirs where backpackers from Asia are being employed with instant ABN numbers, when we hear that food security is going to be a critical issue in the coming decades, when processes like photosynthesis are mutating in farming provinces near Beijing, when Gina Rinehart is looking for $2 a day labourers, when the fly-in & fly-out model puts traditional family life patters under considerable stress, when farming communities no longer have a local pub, footie or cricket team your observation – “I see what has happened with a lot of sadness’ will only be intensified.

    This process of farming upheaval, aggregating or selling up, raises the questions of where is the future. In amidst all of this, I was surprised to hear that significant growing areas of manufacturing and export are pharmacy, bio-tech products – Cochlear, sleep products etc

    Most interesting would be to have a crystal ball that just provide a thirty year scenario which takes in farming and even climate change realities: that would be a boon!

    • Julian Mclaren says:

      Old style farming relied on commerce and profit also so I don’t understand your point about passing the farm from generation to generation as if it is some preferred business model. If a farmer has 4 children, how does he provide equally for them by passing a quarter of the farm each yet keep them viable. If you assumed that this is improbable then you assumed right. Most of the produce of farmers in Australia is produced by a minority of farmers…20% produce approx 80% of output. However, the majority of this 20% are in fact family owned businesses. Extremely well managed, family businesses. Corporate farms will always be a reality but will never be run as effete entry and effectively as handson, owner managers. Much like all business really. Australian farmers are efficient. The logistics and distance issues are the primary impediments to good export outcomes. The global food task is enormous and government should take it seriously. And yes, drought is a natural part of the farming environment. Significant tax incentives including Farm Management Deposits, pool payments and 5 year averaging give farmers significant recognition of their volatile income. Some farmers, like normal businesses have taken on too much debt, for many reasons. From this, they are unlikely to recover. Anyho, that’s enough for now!

      • Julian says:

        Should read “….efficiently and effectively…”

      • Peter Donnan says:

        Hullo Julian,

        Family owned farms are, as you say, well managed and often behind it all is hard work with successful seasons linked to the vagaries of the weather and climate.

        In terms of passing the farm onto the next generation, there are thousands of permutations: many sons don’t want to work the farm and prefer other occupations; some women are taking a more active role in managing farms. If there are many children, as there have been in the past, the simple maths indicate that a farm is not divisible into lots.

        Agribusiness models, crop rotations, accounting and finance, using computer technologies, strategically adjusting crops etc for markets if there is little or late rain: the modern farmer, to survive, has to be more multi skilled.

        Some farmers are leaving the land because they are being bought out by big firms or aggregation is occurring. I didn’t use the term ‘model’ but certainly there is change occurring: what worked in the past is not going to work in the future unless it is accompanied by more innovative practices.

  • DaveW says:

    Hi Don,

    I don’t think I buy your model on the rationalization of the outback: “The efficient ones survive and prosper, while the others go to the wall.” If that were the only explanation, then I would expect to see a turnover rather than a restriction in farm population and a gradual rise in the average level of efficiency.

    As you note “Droughts, floods and fires (and grasshoppers, and other unpleasant facets of country life) are recurring events in Australia”. Let me posit that no matter how efficient you are, if a plague of locusts descends on your crops, you are buggered. Control measures are likely to be ineffective because of past misuse (producing resistance and restrictions) and there is no market for new solutions to rare and random problems. True, you could try to hawk the grasshoppers as ‘sky prawns’, but that has been tried and failed and, without a doubt, you would be in violation of Government regulations covering health and food quality. Yes, you could build more dams to counter the inevitable drought – if the government and the greenies would let you.

    I think you need to add a stochastic element to your model and some more parameters, especially a function that describes increasing government regulation and decreasing government infrastructure and support. Those factors would tend to weed out both the inefficient and the unlucky small farmer/grazier and feed their farms to agribusiness before a new cohort of farmers could give it a go. It wasn’t that long ago that state extension agencies, CSIRO and even universities provided a lot of agricultural support – most of that is gone now, sucked into the abyss of government mandated Big Science – whose natural ally is agribusiness and other large corporate entities (pharmaceutical, energy etc.). Agribusiness has deep pockets (and its hand in the Government’s pocket) and is resistant to both inefficiency and bad luck.

    Another reason I think your model is too simple is that the pattern is worldwide: increasing urbanization, government power and agribusiness domination of the rural sector seem to go hand-in-hand wherever you look. You don’t need to live in a land renowned for its droughts, fires and floods to find decreasing rural populations. It is hard keeping people on the farm, even when it is profitable. So, you need another parameter that covers the allure of the unionized job in the city or the dole compared to 14 hour work days 7 days a week.


  • David says:

    Farmers love to privatise their profits and socialise their losses.

  • Jennifer Marohasy says:

    Hi Don, I think you simplify things a tad. ‘Government’, reflecting a mood in the Australian psyche, has been against farming for some years now. The sudden ban on the live cattle export to Indonesia had a devastating impact on northern producers. Southern irrigators have been properly clobbered by an irrational water reform agenda. Cheers,

    • Don Aitkin says:

      Everything I write is over-simple, Jen! I agree with your analysis, and I could have said that when 94% of the population lives in 14 cities there aren’t many left outside them. Also, the time has gone when most people in the cities had rellies in the country whom they saw on a regular basis. There’s no sympathy much, and not much connection either.

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