IN A recent opinion article in a major newspaper it was asserted that “Northern Australia will never be the food bowl of the world, Asia or even Australia.”
While agreeing that the rapidly growing Asian middle class offers Australian agriculture a major opportunity, the article argued that agriculture in southern Australia was in decline and needed a “massive dose of investment and innovation”. It questioned where this would come from, inferring no difference between public and private investment and disapproving of foreign sources.
Investing in the north would lead to ongoing neglect of the existing industry and amount to a mistake of “epic proportions”, it said. Furthermore, northern agriculture was littered with spectacular failures and any additional development would be foolhardy.
Fairfax Media economic columnist Ross Gittins was recently quoted as saying Australia could not play a significant role in feeding Asia’s growing population unless it contributed a lot of taxpayer subsidies to farmers, researchers and exporters, which would not be forthcoming.
Attitudes like these are common among certain groups of people, who believe that modern agriculture is unsustainable, the environment has been profoundly degraded since European settlement, and the best response is to minimise our footprint.
Opening up the north to agriculture is therefore opposed at every opportunity. A good illustration of this was seen in the 2009 Northern Australia Land and Water Taskforce report, which ignored the potential for new dams, saw no potential for expansion of agriculture and recommended a steady contraction in the area utilised by it.
Those who hold such views, of whom I suspect Gittins is one, are not particularly influenced by data. Their views are essentially ideological. Most Australians, on the other hand, do not agree humans are a pestilence inflicted on a pristine world and prefer a more optimistic view.
That puts the onus on those who know about agriculture to support that optimism with credible information and positive ideas. The hoary old moans that farmers are always doing it tough, there is nobody to replace all the old farmers and no future in agriculture, should be drowned out by those who know better.
There is plenty of positive information to help do that. In economic terms most farmers are doing fine and some extremely well. While the high dollar and green and red tape are a major drag, farms are not going broke any faster than they have in the past. In fact, the overwhelming majority are viable and profitable. The others blame someone else, but that is not new. The main thing is to remember they are not typical.
As for the environment, it is improving all the time. Whatever its other faults, the Murray Darling Basin plan will at least lead to more water in the river system and greater water use efficiency. The chances of the Murray turning into a series of water holes during droughts, as it did before humans arrived, are now about nil.
Stewardship is taken very seriously. In 2009-10, 52 percent of agricultural businesses undertook activities to protect native vegetation, 45 per cent wetland protection and 49 per cent river or creek bank protection. The old problems of salinity and erosion are far better managed than they were even a couple of decade ago.
There are also plenty of entrepreneurs still willing to risk their own money in new ventures. Whether they are growing a different crop, importing a new breed of livestock or moving to a new area, they are giving it a go.
These are the people who will explore opportunities to grow food for Asia in northern Australia. Some will fail and lose all their money, foreign investors who do not know the country well among them. But out of it will emerge the knowledge required to be successful.
Given all that, what role should governments take in developing the north?
The main thing is to get out of the way. That means removing red and green tape and being less greedy about taxation. These are worth doing at any time, but especially important with new ventures involving extra risk. If ever there was a case for a special economic zone offering reduced regulation and lower tax levels, this is it.
In some cases infrastructure is required, mainly roads and ports, and government investment may be required. But there is absolutely no case for subsidising anyone. A lower level of taxes is not a subsidy, it is reduced confiscation.
But those who oppose the development of Australia’s north do not believe in private investment, lower taxes or reduced regulation. They view investors and entrepreneurs as rogues and seek more regulation, not less. Theirs is a grey world of collectivist poverty.
How do I know this? The opinion article in the major newspaper was written by Lyndon Schneiders, national director of the Wilderness Society.
David Leyonhjelm has been an agribusiness consultant for 25 years. He may be contacted at email@example.com