9
The National Farmers’ Federation (NFF) has proudly described Australian farmers as ‘punching above their weight’.[1] While, individually, many farmers struggle to cover their production costs in any given year, Australia’s 120,941 full-time farmers produce enough food to feed Australia and twice as much again to export to the world—$41 billion of food a year. This is impressive. The NFF boasts that the farm sector generates $155 billion a year for the economy, or 12 per cent of Australia’s Gross Domestic Product.[2] This is no mean task.
The changing nature of the global marketplace in the past 40 years has not favoured Australian farmers. Trade liberalisation has been the real impetus for farmers to industrialise food production; it’s the only way they can hope to produce enough food to meet export demand and compete pricewise with many overseas food producers. And because Australians are such good sports, we’ve shaped up to the challenge.
Australian farmers are primarily exporters; much of the wealth they generate comes from international trade. But if farmers are doing it tough trading at home, it can be even more difficult on the world stage. The prices Australian farmers are paid for their products are determined by the world markets, while their costs are largely determined by the national economy.[3] This is a problem. The cost of seed, feed, fertiliser, fuel, electricity and labour in Australia is expensive and rising—certainly compared to many of our competitors from the developing world. At the same time, the value of international exchange rates, seasonal conditions, foreign demand and our trading partners’ trade barriers all work to keep down the prices Australian farmers are paid abroad for their products.
Australian agriculture was built on the hard work of the small farmer through his own ‘capacity for self-exploitation’.[4] When the industry truly began to develop in the late nineteenth and early twentieth centuries, agricultural farming was labour intensive, insecure and only marginally profitable. The majority of small farmers have survived by working long hours, exploiting the labour of their families and enduring impoverishment in the hope of making money during the ‘good’ years. What’s changed?
The early development of an Australian agricultural industry was supported by government, which sold off land for revenue to invest in road, rail and port infrastructure. Agricultural development was further encouraged by government investment in state-financed meat-freezing facilities, butter factories, sugar mills, dams and irrigation schemes. The extension of government credit to settlers, changes to land laws and support for agricultural research also assisted.
At the turn of the twentieth century, Australia had a small population and we were feeding ourselves admirably. So why grow the agricultural industry beyond domestic need? To make money for the new nation, that’s why. Export earnings from agriculture would benefit Australian manufacturers, food and fibre processors, trade merchants and, indeed, the government. Australia needed more industry to expand the economy. The country experienced economic depression during the 1890s along with other parts of the world.[5] At the turn of the century, a strong export industry was needed to relieve the balance of payment crisis, to pay off foreign debt and to stimulate growth in the new nation-to-be. Never mind the unsuitability of the Australian continent and climate for many forms of agriculture and the problem of our distance from international markets.
Large overseas mercantile companies such as the British Dalgety & Co and the French grain trader Louis Dreyfus already had a strong foothold in the production and marketing of rural produce in Australia at that time. Extensive agriculture—beef, sheep and wool—owned and operated by large, wealthy, family pastoral companies were all doing nicely, thank you. But more was needed. Small farmers were encouraged to grow wheat, sugar cane and dairy, in which corporate companies were reluctant to invest because of the high risks involved. These risks included the challenges of drought, plague and market vagaries—still common today. In effect, small farmers were given control over industries from which corporate capital could not make a profit. In particular, dairy and wheat producers for many of the early years could not cover their costs of production let alone come out ahead. Exposure to fluctuations in world commodity prices and exploitation by the middlemen also hurt small Australian farmers.
Many farmers felt co-operative marketing might have helped their plight. But government and its influencers—large business—were actively against the small farmers’ early attempts to set up statutory marketing boards for wheat, sugar and dairy to help improve their bargaining power. This defied the free-market philosophy and threatened potential returns to merchants by reducing their power in the marketplace. Eventually the government did establish statutory marketing bodies as an emergency measure during World War I. The boards were designed to regulate shortages and gluts of food caused by interruption to shipping during the war. The statutory marketing boards continued to operate during the Great Depression years, through World War II and beyond.
It wasn’t until the 1960s that the accelerated globalisation of world trade began to see the removal of protectionist measures that created trade barriers between countries. As statutory marketing boards acted as barriers to trade, these were gradually dismantled too.
Australian agriculture and manufacturing traditionally operated under a protectionist system introduced in the early 1900s and used more widely from the 1930s to the 1980s. Australian governments used protectionist tools such as quotas, which are limits on the quantity of food which could be imported; tariffs, which are a government tax put on imported goods to raise their price in Australia; expensive import licences to discourage importers; and straight out bans on some food imports. Subsidies or cash payments to farmers to subsidise the costs of production were also used at various times in the past. Governments saw it as a way of helping to grow and protect Australian agriculture and manufacturing industries. It worked. But since the 1970s, Australia, like other developed nations, has been required to reform its own markets in order to participate fairly in world trade. The World Trade Organization, of which Australia is a member country, oversees fair trade. In line with its policies, Australia has cut its tariffs and quotas on food imports and reduced export incentives to very low levels. Direct subsidies to farmers today are small and almost nonexistent in most sectors. Farmers are no longer a ‘protected species’.
Protectionism is largely out of favour in today’s market economies because economists believe it impedes economic growth, distorts the market, keeps farmers inefficient, favours some sectors of the economy over others, and is costly to the taxpayer as the government foots the bill for subsidies and tariffs. Australian goods must now compete on a level footing with foreign imports. Farmers have had to readjust their businesses to survive. While government deregulation intended to make farmers more efficient food producers so they can compete with imported products has worked to some extent, it has often been at the expense of many small individual farmers, who simply cannot compete with the low costs of production of their overseas competitors.
This deliberate policy turnaround during the 1970s and ’80s has effectively seen small farmers leave the land. It is ‘neo-liberalism’ in action. Liberalism is usually defined as a market-driven approach to economic and social policy that champions the removal of all barriers to commerce and discourages any government regulation or intervention in financial or social affairs. It supports the privatisation of state-owned assets and a reduction of public spending on health, education and other social services. ‘Neo’ is the ‘new’ form of liberalism applied to our modern, globalised world. The Australian government, presumably supported by voters who elect it, has certainly in recent times been an advocate for neo-liberal agriculture—no matter what the political flavour.
Deregulation has reduced the number of small (often inefficient) farms. It has supported only those farmers or companies capable and big enough to contribute to national income.[6] As a result, not only can Australian farmers now not compete with developing nations, they cannot produce food as cheaply as some of their First World competitors either. This is not because Australian farmers are inefficient—quite the opposite—but because many of our trading partners still protect their agricultural sectors.
In theory, trade liberalisation should permit all countries—large and small, developed and developing—to compete fairly in the world market. This is the hallowed ‘level playing field’. And if everyone dropped their protectionist policies at the same time, this would indeed happen. But, in reality, many countries have not. International trade negotiations are laborious, ongoing and have lengthy timeframes for implementation. Unfortunately, some of our major trading partners, including Japan, the European Union and the United States, still place tariffs and quotas on Australian imports.[7] Their farmers are still highly protected. In world trade, someone always gets the rough end of the pineapple. In this case it has been us.
While farmers are concerned about the situation, the consumer is often blissfully unaware. The effects of trade liberalisation are most visible through the availability of overseas foodstuffs on our supermarket shelves. Many consumers regard this as a positive, but the policies that permit these imports have culminated in loss of income for local farmers and, at times, gross food wastage.
In 2005, Australian citrus growers dumped 50,000 tonnes of Australian navel oranges in their paddocks and left them to rot as Australian juicemakers imported cheap Brazilian orange juice concentrate instead.[8] A combination of factors led the Australian juice companies Berri and Golden Circle to choose the Brazilian product over local juice that year. Ten years before, the government had removed tariffs and allowed cheap Valencia imports to flood the Australian market. Growers were encouraged to get rid of their Valencia orange trees, grown for juice, and plant premium-eating navel oranges instead, which government and industry assured them would find buyers domestically and on the emerging Chinese market.
In 2005, fearing there were not going to be enough Valencias, due to seasonal conditions, Australian juice manufacturers bought up the Brazilian product. However, a late flush in the season meant there were enough Australian juicing oranges to supply demand. The juicers absorbed as much of the excess as possible as concentrate. Meanwhile, the Chinese market had still not ‘emerged’ for the new navel crop and the unsold navels couldn’t be absorbed by the domestic juicers. So they were dumped. Excess Valencias were also dumped. Ironically, there was a demand in China for our oranges at that time but Australian authorities were still painstakingly working their way through the red tape to get the market established there.
The government and free-trade supporters say short-term pain for individual farmers gives way to long-term gain for the whole industry. In the early 1980s citrus growers were protected from competition from imported orange juice by a 65 per cent tariff. Despite this, the profitability of citrus growers deteriorated due to domestic supply problems, weak world prices and increased competition from Brazilian juice imports.[9] In 1988 the government decided to restructure the industry by gradually reducing the tariff to 5 per cent by 1996. The industry was made up of small-scale farmers, most of whom also grew grapes, stone fruit, vegetables, apples and pears. The government offered these growers some financial assistance to restructure. Some diversified into other crops and some left the industry. In 1994 there were 3750 citrus growers, in 1998 this fell to 3100, but by the year 2000, numbers had increased to 3450.
To survive in the new economic climate, the growers who stayed had to improve their financial skills to better manage risk. Crop varieties and farming practices changed. Farms became larger, specialised and more intensive. Today the focus is largely on producing crops for fresh fruit and leaving the juice to the Brazilians. As a result, there has been an increase in crops sold as fresh fruit and these realise higher prices. So fifteen years on, output is up, exports are up, quality has improved, growers are larger and more specialised. Good news for everyone. Except perhaps for the small growers forced out of the industry early on, the fruit that went to waste and the Australian shopper not keen on Brazilian orange juice.
Citrus growers just can’t take a trick. In 2011, with a bumper orange crop ready for export—the first after many years of drought—growers were forced to leave fruit in the paddocks again. This time because the high Australian dollar made the fruit too dear for our overseas customers to buy.
The level playing field still has a few strange divots in it. When we produce enough oranges to supply the Australian market and export twice that many again, why do we see fresh Californian-grown oranges sitting on Australian supermarket shelves? The supermarkets say their policy is to purchase Australian products where quality, quantity and competitive pricing permits. Free trade allows American navels to be imported, and if supermarkets can source them more cheaply or at a time when there is a lull in Australian production, they do. There are only about two months of the year—between the navel season in the south and the Valencia season in the north—when fresh Australian oranges could be in short supply at the supermarket. That is usually when the Californian navel appears. Supermarkets say consumers are driving this demand. They may be right. Many shoppers want to be able to buy an orange or a mandarin all year round. They don’t necessarily know what fruit is in season or where it comes from, and many don’t care. If a big, bright, buffed American navel is sitting on the shelf and they want an orange, they’ll take it.
Perhaps we can be a bit precious about this. It may humour you to know that Australia exports annually about 30,000 tonnes of navel oranges to California—the spiritual, if not historical, home of the navel. While Californian producers boast their navel is produced year-round, Australian navels are readily available alongside them in US supermarkets too. US shoppers don’t like it for the same reasons we don’t like to see Californian navels on our shelves: the effects imports have on local farmers’ viability, food freshness and safety, food miles and other illogics of the practice.[10] But that is free trade.
For the first time since 1921, apples can now be imported to Australia.[11] Since Biosecurity Australia gave the go-ahead in late 2010, Chinese Fuji apples have been imported. Likewise in 2011, apples from New Zealand were permitted into Australia. While Coles and Woolworths have chosen not to stock foreign-grown apples so far, the Chinese and New Zealand varieties are available at other outlets. As well as providing cheap competition to Australian apples, the risk of importing disease is a major concern to Australian apple growers. Apple imports were stopped in 1921 when imported New Zealand apples were found with fire blight, a destructive bacterial disease that can also affect pears. Many of our trade partners see protecting one’s domestic industry from disease as an excuse to keep in place artificial trade barriers. Australian farmers argue it is a genuine attempt to keep Australia disease-free by utilising the natural advantages of being an island. It certainly doesn’t hurt the Australian apple industry either.
The Australian pig industry was also affected by trade liberalisation in the early 1990s; not through the removal of tariffs but, like the apple, through the lifting of quarantine-based import restrictions. At that time the importation of pig meat to Australia was prohibited by the Australian government because of quarantine restrictions designed to stop the spread of diseases to this country. Australian pig producers capably supplied bacon, ham and smallgoods to Australian consumers. Pig farmers’ returns were not affected by international markets and the farmers had no interest in developing an export market.[12] Then along came the Canadians. They wanted access to our market as per World Trade Organization rules. Australian farmers were understandably not happy. Australia would only ‘technically’ be playing on a level field: its pig industry was not subsidised; the Canadian one was. The Australian domestic market had already seen small, non-specialist pig farmers get out between 1975 and the mid 1990s. In that time, tough market conditions had reduced the number of pig farms from 25,000 to 6850. At the same time, the ones that stayed got bigger, and improved feed management and breeding techniques. This led to increased production. The government thought it was time to take this little Australian piggy to market—the worldwide market—and the new world rules meant there was no longer any excuse.
After some pressure, Australia relaxed its quarantine-access conditions. By 1996, pig meat from Canada, New Zealand and Denmark was being sold in Australian supermarkets. It was cheaper than the Australian product. By 1998, returns to Australian pig farmers fell by 25 per cent.[13] The number of pig farms fell by a third in the five years that followed. Imports had gained a larger share of the domestic market. Many small-scale and non-specialist farmers left the industry and big farmers got bigger. It is noteworthy that the production of Canadian pork being imported at the time was subsidised by an estimated 7 per cent by its government.[14] The Danish product was subsidised by 23 per cent.[15] But according to the Australian government, it was all good.
In time, the industry did recover from the reforms and developed a specialised export trade to Asia. Today in Australia there are only 682 piggeries. But most are super-sized. This was all apparently desirable—not necessarily for the farmers, or probably even the consumer, but for the government so we could meet our free-trade obligations.
Fifteen years down the track, reforms to the industry have, arguably, made it more profitable for those still involved. But in the process, the reforms have caused financial loss and heartache to many small Australian pig farmers and a complete change in the nature of pig farming. The government and free traders argue that increased competition brings about increased efficiencies on the farm and in the industry as a whole. It also reduces the burden on the taxpayer, which contributes to the overall wealth of the nation.[16] But free trade is not always fair trade. Major beef trading partner, Korea, adds 40 per cent to the price of Australian beef when it goes onto Korean supermarket shelves. The Japanese add 38.5 per cent.[17] And we should just be happy the Norwegians prefer fish to beef: with a 62 per cent tariff on Australian imports, you are not likely to find a queue to buy Australian steak at the supermarket in downtown Oslo. Yet farmers are told by government that free trade gives them a bigger slice of the pie.
Overseas farmers are better off under a protectionist system. European farmers are subsidised not for national economic gain, but purely to preserve the social value of the rural landscape.[18] The Europeans like to keep their farmers for political reasons too, no doubt: unemployment queues are not a good look for governments. But it’s not just Europe. The average farmer in the developed world is subsidised 31 per cent of his costs of production. The Australian farmer is subsidised just 4 per cent. So everyone else has a 27 per cent head start when it comes to competing on the so-called ‘open’ market.[19] Figures from the Organisation for Economic Co-operation and Development (OECD) show that Australian farmers receive the lowest farm-gate price in the developed world. Consequently, Australian consumers enjoy the lowest-priced food in the developed world. Consumers in other OECD countries pay on average 37 per cent more for their food.[20] So, in effect, by reducing the protection of Australian famers we are certainly not boosting their income or protecting the ‘social value of the rural landscape’. We are subsidising the consumer instead. Is this fair?
While most Australian farmers are not looking for a return to the protectionist mindset of the past, they do want other countries to abide by World Trade Organization rules so they can be paid a fair price for their product, one that covers their costs of production and provides them with a decent lifestyle. Who knows what will happen to the Australian rural landscape when farmers are gone. The Australia–United States Free Trade Agreement (AUSFTA) has provision for the removal of American tariffs, but not until 2018 and not without many concessions from Australia in return. It’s just not fair.
Australia’s terms of trade have been in decline for a century. But free trade has meant the volume of cheap food imported into Australia is increasing. According to the Australian Food and Grocery Council (AFGC), for the first time in decades Australia has become a net importer of food.[21] This means we have imported more food and groceries than we have exported. The industry’s international net trade position fell dramatically from a $4.4 billion surplus in 2004–05 to a $1.8 billion deficit in 2009–10. Many of the factors already discussed influenced these figures: production costs, trade policies and seasonal conditions. The AFGC’s net import figures quoted here do not include exports of grain and live animals because they are not regarded as directly consumed. If included, these would have put the figure in surplus. But the point is that our overall terms of trade for agricultural products have declined during the past ten years. Australia’s food imports have doubled in the ten years from 2001 to 2010 from $5 billion to $10 billion worth, while exports have decreased significantly from $34 billion to $24 billion.[22] Contributors to the growth in imports have been fresh fruit and vegetables (up $45 million), sugar (up $28 million), processed food not elsewhere classified (up $49 million), ham, bacon and smallgoods (up $14 million), spirits (up $8 million), confectionery (up $7 million) and fish or shellfish (up $5 million).[23] The 2011 ABARES’ Outlook conference heard that 34 per cent of fruit and 19 per cent of vegetables consumed in Australia are now imported.[24] Alex Livingstone, CEO of Growcom—the Queensland-based peak body for fruit and vegetable growers—said that Australia was a net importer of horticulture produce and that the trend for this trade imbalance was tipped to rise.
Both fortunately and unfortunately for Australian farmers, we are well and truly part of the global trading community. We can no longer kick the refrigerator door shut to foreign food imports. We are players—some might say pawns—in a bigger game.
Australia has always been an exporter of goods. That was why the landmass was colonised in the first place: the terms of trade were good for Britain. The British exported Australia their convicts and imported the new colony’s wool, wheat and meat. By settling Australia, our colonial masters were expanding their mercantile base. The landscape of Australia, physically and culturally, was cleared and settled as ‘fresh fields of European endeavour’.[25] Wool and whaling were the frontrunners of our export economy in the nineteenth century with dairying, beef and wheat export markets developing in the twentieth century. Since then we have become very proficient at producing and exporting many food products, including a variety of grains, pulses, oilseeds, horticulture, wine and an array of value-added food products. These go not only to Britain but all around the world.
Despite an often-difficult row to hoe, Australian agriculture has proven a great success during the past 200 years. This is due to the hard work, persistence and innovation of Australian farmers—with good support from government. So why aren’t more individual Australian farmers more affluent and influential today? Agricultural scientist and historian Dr Ted Henzell believes the answer lies in the changing nature of traded goods and wealth.[26] In 1880 food and natural fibre accounted for 58 per cent of world trade value. This was Australian farmers’ core business. They were wealthy. Agricultural trade continued to do well until after World War II, when it made up 40 per cent of the total. However, by the end of the twentieth century it had fallen to around 10 per cent. Australian farmers have felt this drop in value through the cost–price squeeze. In 1999–2000 farmers needed to produce more than four times the volume to earn, in real terms, only just over half of what they had done in 1951–52.[27] Farmers have responded exceptionally well, particularly when you look at the lean figures in their cashbooks.
They have managed to stay ahead of the game through increased efficiency brought about by the application of new science and technology. But the game is catching up. Australian agriculture is research-dependent.[28] Today, productivity gains are made through improved technology, not by opening up more farming land and engaging more farmers to produce more food as was done in the past. We don’t have the luxury of those resources anymore. Productivity gains have been made by becoming more intensive (and less extensive) in food production. This means developing new plant varieties, infrastructure, better education, communication, transport, animal husbandry and biotechnologies, and the use of fertilisers and pesticides. Farm industry bodies, supported by the Australian government, have also invested heavily in developing overseas markets for their products during the second half of the twentieth century, to good effect.[29]
Research and development peaked in the 1970s and funding has fallen since. The government-funded Rural Industries Research and Development Corporation (RIRDC) spent $21.9 million in 2009–10 largely on research projects to support existing rural industries.[30]In 2009 Meat & Livestock Australia spent $146.8 million on increasing the productivity of red-meat producers and finding new markets for their product. The Grains Research and Development Corporation spent $133.4 million in 2009 on increasing the productivity of grain farmers to compete internationally.[31] However, the level of funding overall has not increased during the past five years. Farmer groups have been lobbying for an increase to no avail. Experts warn that the reduction in R&D spending does not auger well for the survival of a research-dependent sector into the future.
Champions of current agricultural production policies and systems say farmers are working to feed the world. This makes everyone feel good. The peak farmer groups are happy; their positions are justified. The Department of Trade and Investment is happy; it’s good for the nation’s terms of trade. The marketeers are happy; they get their cut. The farmer is—well, sort of happy. He gets a cheque in the mail that may or may not cover his costs of production. At the risk of being shot, butchered and put in an export chiller box, I can’t help but wonder if farmers are being used to prop up our terms of trade and make our Gross Domestic Product figures look good?
‘Feeding the world’ is just a noble thought as, in fact, Australia only supplies 2 per cent of the world’s food needs.[32] Critics of current trade policy say farmers, as a whole, are being pressured to overproduce to supply export markets not to ‘feed the world’ but to stimulate national economic growth. Farming creates jobs and wealth at home.
Between 1901 and 1970, farmers and rural Australians occupied a special place in Australian society.[33] They contributed economically, physically and culturally to the nation. Up until the 1950s, 90 per cent of Australia’s export income was earned by agriculture. Farmers were big money spinners for Australia. They were also nation-builders. Farmers were needed to literally ‘people the continent’, to fill up the empty spaces of the interior, to defend the new nation. The third contribution farmers made to Australia was cultural: they defined the character of the nation. While city people were regarded as similar the world over, rural Australians were considered different. They displayed resourcefulness, endurance and laconic good humour as they battled the harsh environment of the bush.[34] These three things justified preferential treatment given by government to farmers during the first half of the twentieth century. This took the form of heavily subsidised rural transport, postal and telecommunications services; Federal grants to needy state governments to spend in the bush during hard times; the establishment of statutory marketing boards; tariffs on imported goods; and distorted electoral representation through malapportionment or vote weighting (so that rural people’s votes were worth more than city people’s) or through gerrymandering (which manipulated electoral boundaries to give rural people more representation).
During the second half of the twentieth century, all this changed. Today, gone are the statutory marketing boards, subsidies, tariffs and the gerrymander. Current regional policy essentially encourages rural communities to be self-reliant. They have been left to their own devices. Rightly or wrongly, farmers are no longer regarded as the economic and cultural backbone of Australia—as special. They are now just another sector of the economy.[35] If this is how our government views farmers, how can we expect anyone to attach importance to the role of food production in Australia? The balance of power between the city and country has shifted. As social researcher and political commentator Judith Brett says, once upon a time the problems of the country were problems for the country as a whole.[36] That has all changed. It is now perform or perish.
Never fear, the resources boom is here. There are plenty of jobs and national wealth being created in Australia by mining. The miners are the ones, after all, who are now bringing home the export bacon. In 1983 the top five exported resource commodities—coal, alumina, crude petroleum, iron ore and gold—made up 29 per cent of Australia’s exports. In 2007 these made up 31 per cent. In 1983 the top three agricultural exports—wool, meat and wheat—made up 16.8 per cent of exports. In 2007 it was only 4.2 per cent.[37] Between 1999 and 2009 Australia’s terms of trade increased by 75 per cent thanks to export volumes and the price of coal and metal ore. The Australian agricultural sector’s contribution to our terms of trade has instead declined due to the low prices we received for exported products.[38] The truth is that today mining and energy are fuelling Australia’s growth, not agriculture.
As it happens, it is also the mining and energy sector that is in direct competition with farmers for prime agricultural land. A push by the mining and gas industry into the traditional food bowls of Australia has put farmers and miners into conflict. In New South Wales the coal mining boom has reinvigorated the industry in the Hunter Valley and spurred on exploration of new mines on the fertile Liverpool Plains and on the Darling Downs in Queensland by big miners BHP Billiton and Xstrata. The coal seam gas industry is right alongside them, putting down wells, fencing off leases and erecting pipelines that criss-cross the rural countryside. The miners are competing for farming land that for a century has successfully grown wheat, beef, cotton, oilseed crops, grapes and other horticultural products. The farmers are not happy as the miners have legislative right of way. The farmers own the top 6 inches (15 centimetres) of soil but are unsure as to how they will go about growing food if this dirt finds its way into the coal pit.
The feeling out in the paddock is that more attention—politically and financially—is being given to the miner at the expense of the farmer. Yet the political rhetoric of successive agriculture and trade ministers would have farmers believe they are still the best thing since sliced bread. Agribusiness leaders and rural industry group bosses sugarcoat the economic reality for farmers. The mining boom has done Australian agriculture no favours, yet which political leader will truly put his money where his mouth is and stick up for our food producers? Increased national income and spending has put upward pressure on the value of the Australian dollar, making agricultural exports dearer and less attractive to overseas buyers. These conditions also force up interest rates for farmers who have borrowed money. This may be bearable to those directly benefiting from mining but is detrimental to debt-burdened farmers. Mining also competes with farming for workers and drives up wages.[39]
On the Haystack Plain, near Dalby on the Darling Downs, an alliance of local farmers is fighting a proposed 13,000-hectare coal mine. The farmers say the area grows enough wheat to produce 68 million loaves of bread and enough sorghum to feed 14 million chickens annually. If a mine gets the go-ahead, all this would be lost—and you can’t eat coal for breakfast, as they say.[40] But in today’s globalised world you can export it to China and, in return, import enough food to feed Australians more cheaply than we can do it ourselves. The national accounts will balance better that way too. In reality, global trade policies of the past few decades have been a disaster for Australian farmers. When you punch above your weight, expect to cop a few below the belt.
Most of the 80,000 farms lost in Australia since 1965 were under 500 hectares.[41] Most farmers left because of declining commodity prices, which had fallen in real terms by 80 per cent since the 1970s. Commodity prices are low because governments have pursued policies of deregulation and export-orientation. This advantages large corporate farmers and disadvantages small family farms. Not too many economists, business leaders or government policy makers care to admit the damage so-called free trade has done to small farmers in both the developed and developing world.[42]
The question for the broader community to decide is whether the current system is sustainable long term for the farmer and, in turn, the consumer? Farm industry lobby groups and rural politicians of all political persuasions are encouraging the farmer to continue blindly down the path of efficiency increases, cost savings, mass production and export-orientation. Government and industry direct their efforts into growing demand and finding new markets. At the same time, there is comparatively little effort spent by anyone on safeguarding the prices farmers are paid and, in turn, their future survival.
Modern farmers seem to be stuck on a freeway to nowhere. They can’t slow down, they certainly can’t turn around and many can’t exit in time. The system we have built up over the past 40 years produces the mass amounts of food required to feed us and more. The farmers achieving the results are amazing. Yet they are not adequately rewarded. On the world stage farmers fill many roles—terms of trade ballast, job creators, nation builders, guardians of the national psyche, as well as food producers. It’s a pity we don’t give them the support they deserve.