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Help farmers with direct assistance rather than subsidies

Droughts, seasonal fluctuations, and changing commodity prices are a given and unchangeable characteristic of farming. Farmers voluntarily invest in agriculture and expect that the good times will more…

Australians sympathise with farmers, but governments need to choose policy carefully. AAP

Droughts, seasonal fluctuations, and changing commodity prices are a given and unchangeable characteristic of farming.

Farmers voluntarily invest in agriculture and expect that the good times will more than balance the bad times. Most deliberately follow strategies to set aside windfall gains in good times to support them over the bad times.

Adjusting to business risks in farming is not dissimilar to adjusting to risks in other areas of small business, including mechanics, restaurants and tourist operators.

It is inevitable that poor seasonal conditions or low commodity prices will result in some farmers and their households experiencing a period of poverty. Of course, other small businesses and the unemployed also experience poverty too.

Australia has a strong political and social consensus for governments to provide a safety net of a minimum income and access to education, health and other services for all its citizens.

What’s proposed

The proposed Farm Household Allowance (FHA) announced in the 2013 federal budget seeks to provide very low income farming households with financial support equivalent to the Newstart allowance provided to unemployed people.

A condition of receipt of the FHA is that the farmer review the future viability and management of the farm to better recognise the effects of future droughts. This form of household-based income support can be considered an arm of government and society’s anti-poverty or equity goal.

There are challenges in assessing whether a farm household is in poverty and deserving FHA, as is the case for any small business operator. Over what period is income to be measured, when farming involves reasonable incomes during periods of good seasons and high commodity prices, and low or negative incomes during droughts and low commodity prices? Many low income households, while income poor are asset rich, although farm values become depressed during drought periods. Inevitably, compromises with some deficiencies will be required.

Subsidies reduce farmers' incentives to plan for natural downturns. Shutterstock

The case against subsidies

By contrast with direct support of households considered to be in poverty, most other forms of drought assistance are effectively farming industry subsidies. These subsidies include low interest rate loans not available to other industries, and subsidies for the transport of water, fodder and livestock.

Farming industry subsidies effectively raise returns in the drought times with no claw-back in the good times. They have the effect of raising average returns from farming, which “privatises the gains and socialises the losses”, and they also reduce the variation of returns over time. Both effects lead to a redistribution of scarce national resources from higher value uses to lower value uses, much as subsidies do to the motor vehicle construction industry.

Subsidies in times of drought reduce the incentives for some farmers to plan for the effects of the natural adverse conditions, and they can slow down the necessary structural adaptation of the farming sector.

Expectations that government subsidies will be provided in droughts encourage some, and only some, farmers to overstock during good seasons, to put aside less fodder, and to spend more of the windfall income earned during good seasons. Importantly, the subsidies raise the reservation prices less well-managed farms seek from other better managed farms in the transfer of farms to larger and better managed farms.

Farm subsidies are not an effective way to meet household poverty alleviation objectives relative to direct grants to households, such as the proposed Farm Household Allowance. The amount of debt, or of fodder, water and livestock transported, and the subsidy received, is a very poor measure of household income need. To a large extent the subsidy becomes capitalised as a one-off increase in farm land value. While the higher asset value may help the current farmers, it does not assist those in the next drought.

While most Australians sympathise with the plight of farmers facing drought, governments need to be careful in choosing policy. Droughts and other natural disasters are a given characteristic of the farming industry. Farmers voluntarily invest their labour and capital in farming, rather than other parts of the economy, because they believe on average they will earn a reasonable income. Subsidies for production or inputs distort the allocation of resources and farming decisions with a loss of national income.

Inevitably, some farm families will find themselves in temporary poverty, and here direct income support to these households can be justified to met society equity goals.

Join the conversation

65 Comments sorted by

    1. Jack Ruffin
      Jack Ruffin is a Friend of The Conversation.

      logged in via email @hotmail.com

      In reply to Stephen Duckett

      Stephen could you give a little more detail on the "income- contingent loans" secured against the value of the farm? The approach sounds interesting especially given the assessment of long term viability.
      It's a difficult issue given our society's traditional distribution of power and patronage.

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    2. Stephen Duckett
      Stephen Duckett is a Friend of The Conversation.

      Director, Health Program at Grattan Institute

      In reply to Jack Ruffin

      The best known example of income contingent loans is for university fees but the idea's author, Bruce Chapman from ANU, has advocated it in other areas see http://www.amazon.com/Government-Managing-Risk-Contingent-Organizations/dp/0415287782

      So it could work like this (bearing in mind this is not an area I have researched):
      1. Farmers in drought times would be able to access government guaranteed loans to tide them over, offered to a broader range of farmers than FHA
      2. Framers would pay this back in the good times
      3. in order to protect taxpayer exposure, and bearing in mind farmers are often capital rich and income poor (and may have tax effective ownership structures), any unpaid debt that exists at the farmers death would come from the estate

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    3. Paul Newell

      logged in via LinkedIn

      In reply to Stephen Duckett

      John Freeman; Why do Economists mistakenly believe that modern day Agriculture and Farming are the same form of land use?
      Do Universities still teach Agricultural Science, or do they realise that a failed science, is not Science?
      The real problem here is that in our present day people can only think about money and do not know how the land and water systems work for human benefit, if functional.
      The most important discipline of learning that people need is “Ecological Understanding”, before civilisation…

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    4. Henry Verberne

      Once in the fossil fuel industry but now free to speak up

      In reply to Stephen Duckett

      Your income-contingent loan proposal seems a very sound and sensible alternative to the current relief system.

      Rather than the "one-size fits all" approach of some schemes this proposal should support farmers much better in times of hardship but require them to repay when times are better.

      A hard-headed assessment may be needed to determine which farms are viable. Some may have high existing debts and the farm may realistically never be viable.

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    5. Joseph Bernard

      Director

      In reply to Paul Newell

      Paul,

      i agree with "It has cost the Australian Government a lot of money" .. and as you say "people without 'Ecological understanding' are just creating more desert' .. we just need to google the UN statistics on "Desertification" which is a world wide phenomena.

      They say if you keep using the same tactics and are expecting a different set of results then this is a sign of madness. It takes no Einstein to figure this out. surely. So, may we ask ourselves: "Is extending credit to farmers…

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  1. Phil Irvine

    Grazier

    It is recognized that farm incomes can fluctuate greatly from year to year and that is why farmers can average tax over 5 years. This implies that farmers must have the means to survive over some lean years. This makes it tricky to decide when income is out of a "normal" range .

    It also has to be recognized more widely that weather patterns are changing and anything based on things returning to what some see as "normal" seasons is probably doomed to failure.

    Maybe something like a Newstart allowance, not means tested for primary production assets , and based on the 5 year tax averaging income could be a possibility.

    Unfortunately there are many farmers who may never be viable under future weather patterns and who need some support while they get themselves out.

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  2. Eliza B

    logged in via email @optusnet.com.au

    I often wonder why if mining companies can gain government subsidies, why farmers can't do the same considering they grow food for the nation.

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  3. Clive Bond

    logged in via Facebook

    Yes. Sounds fair and reasonable. Except that australia is trying to compete against countries that subsidise their farmers and industries to an unfair level. It seems to me that we have an unlevel playing field in farming, the car industry, the airline business and just about everything else.

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  4. Peter Boyd Lane

    geologist

    We need to accept that, long term, many farms and grazing properties are not viable. Large areas of our continent (remember, it is the driest on Earth) have been degraded by grazing and during inevitable dry periods there is no feed for stock. Over vast areas cropping has exhausted already poor soils and rainfall has trended lower. I have no simple answer, but there does seem to be a need to assess long term viability to avoid putting good money after bad.

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  5. Pamela H.

    logged in via email @hotmail.com

    The government has already paid $31 million to meat growers. Why should they, who greedily overbreed their stock during known times of drought, get any more than anyone else? Why aren't they made to jump through hoops for the dole like so many other struggling Australians who don't even own property? Why is one lot considered bludgers, and the other lot gets sympathy? It's all tax payers money; and a growing percentage of those tax payers are vegetarian, raw food or vegan and don't eat the meat that those farmers grow anyway. Raising meat an outmoded occupation, yet, as always, old conservatives stubbornly dig in their heels to avoid change or progress. It's the same as the live animal traders who continue to send their animals off on those horror ships. Like the slave trade, live animal trade is an archaic form of income which only makes money for a very few. Live animal export takes jobs from Australian meat processors and is inherently cruel.

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    1. Gail Dennis

      grazier

      In reply to Pamela H.

      You clearly have issues with meat, Pamela, to the point where what you've written doesn't make sense. 'Raising' meat is not "an outmoded occupation" - it's supplying protein for the masses. And I don't know what "greedily overbreeding" stock means. Are you referring to brilliant seasons where conception rates and weaning rates are higher than in average seasons? This is not achieved during "known times of drought".
      What $31 million? I missed out.

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    2. Eric Glare

      HIV public speaker & advocate

      In reply to Pamela H.

      Pamela you mix up here and now with where you want us to be in 20 yrs time or may be you can't see that isle at your supermarket.

      Likewise, "..who greedily overbreed their stock during known times of drought" suggests you cannot hear all the reports of farmers shooting their livestock because there are no other viable options. You do know that starving animals, human or otherwise, do not breed very well?

      As a drought approaches farmers take their flock through repeated rounds of culling removing…

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    3. Peter Hindrup

      consultant

      In reply to Eric Glare

      Eric: Well said.
      Had you posted this before I wrote my ramble, I woudn't have bothered!

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    4. Neville Mattick
      Neville Mattick is a Friend of The Conversation.

      Grazier: ALP Member at A 4th Generation Grazing Station

      In reply to Eric Glare

      Black days indeed Eric, to have to destroy a magnificent animal for humane reasons is toxic to Mental Health.

      Few in Australia today understand or have to go through the squalid dirty business of the work people do on the Land - in fact so few could help themselves should adversity arise, such as a fire, flood or drought.

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  6. Peter Hindrup

    consultant

    I have heard this quibbling over farm assistance over many years. To equate farming with any other small business is, in my view, erroneous.

    In any other business you put off staff, extend your trading hours, and if things show no indication of an upturn, either sell or shut the doors and walk.

    On a farm the costs are ongoing, stock has to be cared for, fed, there is no trickle on income, as there would be business --- if you were getting no income in any other business you would logically…

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    1. David Coles

      logged in via Facebook

      In reply to Peter Hindrup

      Yes, you can get caught with too many stock and not enough food and water. Certainly, it is always a question of how long to hang on to stock when conditions start to go bad. Definitely, you may be forced to sell at a loss and you may end up being debt laden. It is hard to read the weather with any certainty but all of the science indicates that change is underway and has been underway for at least 20 years.

      The job of a farmer is manage all of these factors keeping the welfare of their stock at the top of the priority list. They are in a business. Why should they receive treatment that others do not.

      But you are in business where you have responsibility for the welfare of animals.

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    2. Gail Dennis

      grazier

      In reply to Peter Hindrup

      Thanks Peter for pointing out some of the realities to our urban-dwelling colleagues and to author John Freebairn whose article completely missed the point. The key issue is that the ability to set aside money or fodder for the lean times is reliant on having an excess of those things in the good times. This excess, in turn, is reliant on achieving prices which reflect cost of production + profit.
      Increasingly, this is no longer the case. Whilever Coles & Woolies drive prices down, and consumers support that by expecting to pay no more for their lamb or beef (or milk, or vegies) than they did 30 years ago, there is no surplus.
      The difference between farming businesses and all other small businesses is that farmers don't set their prices.
      And anyway, there is just no way to provide for the current crisis, which is predominantly about water.

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    3. Darren G

      logged in via email @yahoo.com

      In reply to Gail Dennis

      Uh, most small businesses don't set their prices either.

      Right now in WA the big miners are driving a wave of business collapses in the small mining services sector by delaying contract payments. Im seeing that every day in my work. I don't see too much sympathy from farmers for these people.

      In fact Gail Id have to say not only if there no sympathy for such people from farmers your comment suggests you are totally unaware of the plight of these people. The difference is that famers get publicity when they get in financial strife - most other people dont.

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    4. Darren G

      logged in via email @yahoo.com

      In reply to Peter Hindrup

      Peter, you can sell up at any time. It may mean you go bust but that's just part of business. and if the price you sell for is rock bottom then the buyer has a chance of making a go of it later when conditions improve.

      There was an earlier article on this where I had a long discussion about these issues with a very nice gentleman who is a farmer. The farm business model is all wrong. that's the bottom line. And if farmers aren't willing to adopt a sound business model why should the rest of us taxpayers continue to subsidise them year in year out?

      The difference between farming and other industries is that to many farmers confuse their life and their family with their work. That's fine if you want to do it but why should everyone else subsidise it and - as my previous discussions said - given the rate of suicides in farm communities is the old farming model really worth trying to make work? I think the answer to that is no.

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    5. Peter Hindrup

      consultant

      In reply to David Coles

      Thanks Gail: and David I will attempt to answer your assumptions, but keep in mind that I am not a farmer. I left the life because I lacked the skills, observation, remembering when what happened, and what happened thereafter. Nor, until very late in life did I acquire any stock handling skills.

      Some will tell you that they can be taught/learned. All I can say is ‘good luck’.

      Stocking levels. The property that I was on was considered by most farmers to be understocked by between one quarter…

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    6. Gail Dennis

      grazier

      In reply to Darren G

      Wrong, Darren; I am aware of some shocking business practices in various industries in recent times and I've been trying to raise awareness where I can. One involves querying/delaying payments to small subcontractors in the construction industry in WA (similar to what you described); another relates to the decimation of small-medium independent panel beaters by insurance companies. There are other examples, but those two will do.
      But there's a difference between being screwed on price, or being screwed on payment terms, and having no power over prices whatsoever.
      If you "haven't seen too much sympathy from farmers" for others then you haven't spoken to many farmers.

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    7. Neville Mattick
      Neville Mattick is a Friend of The Conversation.

      Grazier: ALP Member at A 4th Generation Grazing Station

      In reply to Darren G

      Darren, we are facing Anthropogenic Climate Change and whilst the mining to which you refer might not be so closely linked, the COAL and CSG in this area are making life much harder for those that continue to raise livestock and produce crops for your food.

      A mine will fill your wallet but it won't fill your stomach !

      Walk a mile in my shoes !

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    8. Darren G

      logged in via email @yahoo.com

      In reply to Neville Mattick

      Neville, Im not an apologist for miners (quite the opposite) but I think mining is just as important as agriculture and many other things. Without mining etc you wouldn't get your food to market. Simple as that, although you could probably add lots of other things - like what is your farm machinery made of and running on. That puts that argument back to deuce, which was the point I was making. I get a bit tired of this "mining/agriculture/whatever is the most important industry and therefore needs special treatment" - funny how everyone thinks they are a better than average driver - and that the industry they work in is the most important. But just because people believe that doesn't make it true.

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  7. Jay Wulf

    Digerati at nomeonastiq.com

    Listening to the Honorable Member for Warringah on the Radio this morning, he has referred to the farmers with words to the effect of 'Very worthy people'. By definition, he must think of many other Australians as 'not so worthy people'. Many of those who are seeking government assistance, are clearly unworthy dole bludgeing drunks, dopeheads and lazy surfers. Yet, when they seek government assistance, they need to declare assets and if the assets are above certain level, they will most certainly…

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    1. John Pickard

      Eclectic naturalist

      In reply to Jay Wulf

      "The Emperor has no clothes!"???? Good heavens, are you suggesting that he's walking around naked? The lycra is bad enough, but no clothes is simply a vomit-inducing image. Do you mind? This is a family-friendly forum.

      But why would you expect him to do anything other than provide more subsidies for farmers? After all, that's what his bed-fellow Joyce was elected to do: divert PAYE taxpayers' dollars to farmers. It's the fundamental creed of the National Party. They have NO other function, and…

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  8. Peter Ormonde
    Peter Ormonde is a Friend of The Conversation.

    Farmer

    Have you all noticed those pensioners filling their shopping trollies with sirloin and porterhouse over recent months? No? But heck our farmers are doing it tough - they're shooting their cattle because they just can't feed them any more.

    Well no they're shooting their cattle because that is preferable to seeing them flood the market and watching the market prices drop.

    Have a look at recent movements in beef markets http://www.theland.com.au/news/agriculture/cattle/beef/beef-futures-prices-hit-a-high/2686918.aspx

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    1. Adam Trethowan

      logged in via LinkedIn

      In reply to Peter Ormonde

      Hi Peter,

      I liked your post. It's good to hear something from someone at the source.

      Your quote: "Farmers are not a protected species ... some should fail."

      If we believe that assistance is essential for the industry generally, how would you set it up so the ones that need to fail do, and those that shouldn't can push through the hard times with a more productive view of risk than would be allowed in an assistance free environment?

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    2. Eric Glare

      HIV public speaker & advocate

      In reply to Peter Ormonde

      Peter, your mystery around supply, demand and stock prices would not have been so if you had read past the first paragraphs of your first link. Most of what you said isn't supported by your links:

      "...will see continued de-stocking, with the high level of cattle coming to market to weigh on prices." "...dry conditions saw 8.6 million head of cattle – the highest level since 1978 – turned off in 2013, prompting a surge in beef exports, which hit a record....'All of the additional beef was exported…

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    3. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Eric Glare

      I am an orchardist in the middle of serious cattle country - as yet not too badly affected by drought.

      The point is Eric that if there is the massive destocking then why have prices not fallen - the answer as you suggest is that prices have been held up by selling cattle into export markets ... but this means that both the cattle price and farm incomes overall have not in fact fallen ... not yet. That futures markets do not reflect any anticipated price decline suggests that overall things don't…

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    4. Eric Glare

      HIV public speaker & advocate

      In reply to Peter Ormonde

      Peter, I am not suggesting anything. I am merely regurgitating your own evidence from the Meat & Livestock Australia's chief economist Tim McRae whom you now seem to think is not to be trusted. I remind you of your other evidence, the market reports that showed the decreased price in stock 2012-14 that is only just now recovering for lamb but not steers. Obviously, farm incomes have deteriorated over this period if that happened across the industry.

      "That futures markets do not reflect any anticipated…

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    5. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Eric Glare

      No Eric I'm not saying that Jim McRae is "not to be trusted" ... what I am saying is that the normal rules of supply and demand do not operate in these markets and that we can dump product into exports to prop up domestic prices and hence farm incomes.

      The simile you use re bananas or any other crop is not actually similar Eric. Yasi leads to a shortage - drought leads to a glut not a shortage - or is supposed to... but as those reports on annual market movements, they don't. Bananas are particularly…

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    6. Robert Hewitt

      logged in via Twitter

      In reply to Peter Ormonde

      Yes the drought can lead to a glut of animals on to the market. It doesn't however mean that those animals are suitable for all markets.

      You are not going to supply beef into butchers or supermarkets from beasts that haven't had a good feed for months. They are at best going to go into the ground beef or chopper markets, which are flooded with all the other drought affected stock being offloaded.

      It is similar issue to those that argue that we can substitute cattle destined for live export into the beef market. They are very different beasts.

      The other complicating factor on market prices at the moment is the access to kill space. Most abattoirs are, or are just coming out of, the most profitable time they have had for years, the reason being they are running at absolute capacity.

      The market is far more complicated than a simple link between saleyard and retail prices.

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    7. ernest malley

      farmer

      In reply to Peter Ormonde

      PO - not getting a bit Frost-like are we "My apple trees will never get across". The only reason 'tis said that "good fences make good neighbours" is because people cannot/will not think outside their own prejudice.
      How is farm assistance any different to the first home Sellers' Bonaza? It maintains prices that should fall, were there truly an 'invisible hand' Spectre stalking the continent.
      I've had almost 2" in the last couple of days so am smiling again.

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    8. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to ernest malley

      Oh no ern ... grinning from ear to ear and filling my lungs with the wonderful smell of dust free air and damp earth .... the odd spatter of rain on the roof and all is right with the world. Doesn't take much to cheer me up ... in fact the whole town is quite chirpy ... a great improvement on last week. And my trees all like quite perky as well. Even my tanks are full again. Nothing like full tanks to give a man a new lease on life.

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    9. Neville Mattick
      Neville Mattick is a Friend of The Conversation.

      Grazier: ALP Member at A 4th Generation Grazing Station

      In reply to ernest malley

      Indeed Ernest; elsewhere in this place it is written; "An analysis by Environment Victoria suggests that in 2012-16, the claims will average approximately $2.3 billion per year."

      https://theconversation.com/the-great-global-warming-subsidy-the-truth-about-australian-corporate-welfare-23281

      No problem there, food production - oh what ?

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  9. John Pickard

    Eclectic naturalist

    Here we go yet again. Another drought, more sob stories on TV with the inevitable mood music of slowly plucked guitars, images of bare paddocks with starving cattle and sheep (how about a few prosecutions by the RSPCA for cruelty?), and more clamour for more subsidies.

    The comedy duo Abbott and Costello (sorry, Joyce) fly out, have a sausage sizzle, make the right noises and (inevitably) promise more drought relief. Why? Like the high Oz dollar and massive imports of cheap cars with Ford, Holden…

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  10. Peter Mitchell

    Ecologist

    In all the discussion on the economics of subsidies, there is no mention of the impact of drought on the long tern sustainability of our environment and agricultural production. Since the 1840s droughts have been characterised by starving stock and bare paddocks. Pasture species (mostly natives) are killed off and the soils are depleted and blow away as a consequence of holding onto stock into each drought. Stocking rates even in better years in our drier regions have declined dramatically. The extinction of our many of our native animals has been probably hastened by the overstocking during drought. This is not a small issue to be faced by individual farmers, it is a national issue. After 170 years of managing stock in drought, do the economics of farming still favour holding onto stock long after the environmental signals indicate it is time to destock. Economic incentives from government should, in addition to household allwances, focus on protecting out national assets.

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    1. Paul Newell

      logged in via LinkedIn

      In reply to Peter Mitchell

      I am appalled at the lack of empathy of some people to both the land of Australia and the people who live in it, urban or rural, so I will re-post my comment here, once again.
      John Freeman; Why do Economists mistakenly believe that modern day Agriculture and Farming are the same form of land use? Do Universities still teach Agricultural Science, or do they realise that a failed science, is not Science?
      The real problem here is that in our present day people can only think about money and do not…

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    2. Russell Hamilton

      Librarian

      In reply to Paul Newell

      Paul Newell and Peter Mitchell, thanks for the common sense: we need to start with understanding how important sustainable agriculture and rural communities are, then devise the policies that support that.

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  11. Terry Mills

    lawyer retired

    When I heard this morning of farmers whose stock was too weak for transporting either to market or agistment I had to conclude - with the best will in the world - that this was a sign of management failure.

    I live in an area that is coastal and lush & green and we see a lot of cattle being moved through here for 'finishing' on agistment prior to going on to market weeks later: that is management at work.

    Having said that I wish those who are suffering from this drought all the best for the future.f

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  12. Alistair Watson

    Adjunct Professor, Centre for Water Policy and Management at La Trobe University

    Stephen Duckett,

    Income contingent loans make good sense for students because both sides of any loan transaction would be ill-informed. Students don't know what their prospects are, and banks are unable to judge the risks of defaults either through poor academic performance or bad behaviour. The opposite is the case in farming. Farmers know, or should know, the risks of farming, Banks know plenty about their farmer clients and support good risks. So long as governments step in with drought support, the best policy for farmers dealing with drought will always be to 'do nothing and scream' as Ross Parish taught John Freebairn and many others a long time ago.

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    1. Stephen Duckett
      Stephen Duckett is a Friend of The Conversation.

      Director, Health Program at Grattan Institute

      In reply to Alistair Watson

      Maybe true. As I said, though there might be "a component of assessing whether the farm is really viable in the long term given long term rainfall projections".

      The issue surely will be how might farmers insure against the risks of climate variability? Assume your farm is long term viable. That means over a ten year period you'll have 5 good years and 5 bad ones, with the 5 good years being better (on average) than the 5 bad ones. Over a relatively short term like a decade you can put money aside from year to year and draw it down, so no need for government intervention. The argument you make.

      But what if we have a 1 in a 100 year drought. This is not an expected event in any given farmer's life time. Should there be a policy response? Or should we adopt the Darwinian position and say, like Toyota, they're doomed anyway so taxpayers shouldn't stump up?

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  13. trevor prowse

    retired farmer

    To start ,I should say that I farmed for 38 years and did not claim any government assistance, probably because we were in a reliable rainfall area in Western Australia. In the "West" today , it stated that the Electricity and transport is subsidized to the tune of many millions every year, so there is an equity issue with allowing farmers to ask for help in times of hardship . There is the issue of our agricultural competitors obtaining subsidies. In the USA they have MAP (market access program),FMD(foreign…

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    1. Paul Newell

      logged in via LinkedIn

      In reply to trevor prowse

      Good reply Trevor.

      Agriculture is a “dead duck”, don’t confuse industry with Nature.
      Anyone with empathy for the land and its people and have learned the art of “Stewardship”, can farm (increase) their own food and water.
      Any farmer who recycles MORE of what he grows as plants through animals and recycles MORE of what he grows as animals through soils will not have drought or desert and have plenty of water.
      Nature seeks to keep Nutrients, Minerals and Water together as the sap stream of the…

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    2. Eric Glare

      HIV public speaker & advocate

      In reply to Paul Newell

      I think your fluffy jingo hides the reality that change costs - and this is no suburban veggie patch. Think of several thousand hectares and expensive machinery.

      I think it is rather insensitive and unhelpful to tell farmers they can avoid drought. Droughts would still occur if every human was suddenly evaporated from the planet. And we are certain that deserts existed before primates came down from the trees and began to walk. We know there were deserts, droughts and animals dying of thirst well before humans discovered agriculture. We have to work within the realities not some far removed desk ideology that talks about nature in unnatural way.

      Agriculture is only a dead-duck when humans stop eating.

      Give us one suggestion of how a wheat farmer can recycle more of what he grows - hint: no one burns the stubble anymore.

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    3. Paul Newell

      logged in via LinkedIn

      In reply to Eric Glare

      Reply to link; http://theconversation.com/help-farmers-with-direct-assistance-rather-than-subsidies-23021
      In reply to Eric Glare.
      It is unfortunate in our modern age that “Ecological Understanding” is not the first and only discipline of learning with all the other disciplines of learning tagged on.
      It is also unfortunate that farmers and our whole artificial industrial civilization of people have been taught the practice of Agriculture based upon the failed science of Agricultural Science…

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    4. Eric Glare

      HIV public speaker & advocate

      In reply to Paul Newell

      Come on Paul, you probably have a legitimate point somewhere but that's just an unfocussed, very long dump where much of the grammar doesn't make sense to me. Is there a point to self expression if it is too long and unreadable?

      Are you suggesting that all cereal farmers should decrease the quality of the grain they produce so that they have 30% at the lowest quality that they can justify feeding to pigs? Shouldn't all food grade grains go toward food in a climate of respect for farm ecology? And which farmers can afford to give up the massive price differential per tonne and why wouldn't that strategy exacerbate the effect of drought on incomes by a massive 30%?

      When I asked for one idea for grain farmers to increase recycling I meant an answer applicable to most broad-acre farming (100s of thousand of hectares) not the tiny minority that are the size of a poultry run. How many chooks would it take to roll out your model?

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    5. Eric Glare

      HIV public speaker & advocate

      In reply to Peter Ormonde

      It isn't strange at all Peter when people don't want to engage with the issues of article in an empathetic way and then use links to argue the opposite of its content.

      You must have heard of the farmer who shot his cattle and then himself but you said this above: "..they're shooting their cattle because they just can't feed them any more. Well no they're shooting their cattle because that is preferable to seeing them flood the market..".

      What do you think would be the effect of a drought-distressed farmer reading this as he contemplates shooting his stock? Didn't you see the starving cattle on TV that are not worth enough to be transported for slaughter for dog food? Have ever put down pet and can you imagine doing that for 1,000 head over days?

      People's mean-spirited, insensitive and unsubstantiated ideas should not be allowed to distort society's response to drought.

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    6. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Eric Glare

      Is that what you think is happening Eric? Why?

      The graziers around me act swiftly to de-stock ... they do not wait till their cattle are dead on their feet .

      Would that all graziers were so concerned with the welfare of their animals that they would not gamble them on the chance of the long=range forceasts getting it wrong.

      Sadly not all graziers are competent or concerned either by the health of their pastures or by the welfare of their cattle.

      It is very educational living in the…

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    7. Eric Glare

      HIV public speaker & advocate

      In reply to Peter Ormonde

      Once again Peter, it isn't about what I think. It is about what has been news. You are just hammering out the last message so that it doesn't look like you sort to mislead us previously.

      And you do this for every topic.

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    8. Paul Newell

      logged in via LinkedIn

      In reply to Eric Glare

      Eric.
      You would like a short answer to an ecological question? Use your imagination; John Lennon did hoping for a better world!

      A slightly more polite answer might be:
      Imagination a one hundred thousand hectare rural property or the whole of Australia inside the boundary of the ocean.
      What is happening with the small amount of wild life, that are left?
      They are making their own habitat, each to its own separately and together.
      Now bring in all the species that man uses as food and what…

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  14. Alistair Watson

    Adjunct Professor, Centre for Water Policy and Management at La Trobe University

    Stephen Duckett,

    The problem with 'one in a hundred year' droughts, in my long experience, is that they seem to happen every five years!

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    1. Phil Irvine

      Grazier

      In reply to Alistair Watson

      "One in a hundred" is based on what the climate was like during a long period of abnormally good seasons. It probably should have been more like 1 in 50, and that was before the climate started to shift away from that golden period towards much more uncertainty.

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  15. Toss Gascoigne

    Science communicator

    What about using an income-contingent loans system, like the HECS debt?

    That means farmers can borrow in times of drought but the loan is repayable when times improve and their incomes rise above a certain threshold.

    If their incomes never reach this threshold they are never liable to repay the loan, just like graduates who never earn a significant income.

    At least this way the country would get some of the money back!

    This would be an intelligent application of Professor Bruce Chapman's original idea, the one that led to the HECS scheme and ha been copied by a number of other countries.

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    1. Toss Gascoigne

      Science communicator

      In reply to Toss Gascoigne

      Hmm. Should have read other posts before rushing out with this one. Good to see the idea has been canvased already.....

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  16. David Briggs

    logged in via Facebook

    Just when I have almost lost all faith in the Conversation we have a measured article and reasonable measured comments.
    Drought has been a difficult policy issue for many years. A key problem is that it is difficult, if not impossible to separate welfare based assistance from the inevitable distortions on management decisions. In essence any support to farmers will, at the margin encourage risk taking decisions (and discourage better management and farm rationalisation).

    We already have taxation…

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  17. Marie O'Dea

    logged in via Facebook

    Thank you John for some clear thinking about the distortions that drought related subsidies create. They go into land value or delay people making decisions. There has also been distortion (over time) in how drought is defined across Australia thanks to politics. Yes, the EU and USA subsidise their agriculture (not necessarily farmers), but NZ does not. Farmers do have to be clear about lifestyle and business objectives and not expect the Government (taxpayers) to bail them out. As a farmer I would much rather see taxpayer money go towards support for the industries rather than individuals and this might be through R&D, funding AQIS to provide a service rather than cost recovery (more like USA) and working on trade agreements to get a better deal for our products.

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  18. David Vernon

    Network Engineer

    I don't believe farmers should get support at all. They only get it because they are an effective lobby group or in times like now their side of politics are in power.

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  19. Jo Rea

    Sometime Economist

    If you really want to have some intelligent debate on this subject offer some comment on how farmers deal with constantly selling into a monopsony so that there are effectively no such thing as "good times" any more.
    Consideration needs to be given to the effect on price through 2013, not only of the drought but the fact that it was exacerbated by a government action, the live cattle ban to Indonesia.
    Just for the record, the indicator market, the US, had record prices for beef through much of 2013. Cattle were at an almost record low. Some believe they were a record low.
    The dairy industry has been destabilised by a monopsony acquirer, Coles. The beneficiary of this destabilisation is likely to be foreign investors who can pick up assets at fire sale prices.
    If we are going to welcome foreign investment it needs to be at a premium, not at artificially created low prices.

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  20. Neville Mattick
    Neville Mattick is a Friend of The Conversation.

    Grazier: ALP Member at A 4th Generation Grazing Station

    Can't believe the tenet of this submission. No where does it address the price signals sent to Farmers' and Graziers'.

    What all those that oppose finance for Agriculture are actually saying is "we want our food as cheap as possible and nothing more".

    I pose the question; Should I get paid for my production as in about 60 Tonnes of near organic sustainable production per year goes out, hence we are paid about $1,000 per Tonne with non discretionary costs of $1,250 per week to meet. Prices are still those we received in 1994 for your information.

    Should I get paid - currently not paid - should I get paid?

    Scenario: Assume your 1994 income with 2014 Costs --> Discuss !

    Walk a mile in my shoes !

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