THIS week I went to a clearing sale not far from home. I drove through some of the best developed and managed irrigation and dryland farming country in the district. I turned into the gateway with the “Auction Today” sign and saw the same underlying quality of country, but with run down infrastructure and fallows overrun with weeds.
The sale was tough enough and the overwhelming sensation of dread was palpable as I, and other farmers, considered a major reality check of the market value of our own farming plant.
The questions rise large about how productive land in a reasonably reliable area cannot underpin a profitable business. The usual list of stock answers to this conundrum float out and the superficial assessment is that the farmer must have been less than competent. Better this than we are all doomed by weather and luck I suppose.
The day before the clearing sale, I had a middle-aged - nearly old, although by industry standards probably young - farmer ring me. He led into a conversation with, "I am wondering if I should just sell out, I can’t see a future in this game anymore".
"Forty years ago I started with nothing, five years ago I had money and the way things are today I will be lucky to hold onto the farm. Will things improve? What do you think I should do?”
We talked for a while and the best I could suggest was that eventually things will have to change, but I didn’t have any convincing answers for him.
On reflection, I was forced to consider, what is a farmer really and what is it to be a competent farmer?
In perusing many definitions it seems as simple as the obvious: a farmer is simply one who operates a farm. In turn, a farm is defined as a unit of land or water devoted to the production of some particular type of plant, animal or fish. By inference, a farmer’s primary occupation is in production. Surprisingly, nowhere could I find a definition of a farmer as being an entrepreneur or a business person.
Notwithstanding this, my understanding of our demographic suggests that Australian farmers are still overwhelmingly small business operators.
In my experience, most successful farmers are competent, at least, in management of the complex interaction between soil, water, sunlight and biology in production. Successful farmers are not necessarily consummate entrepreneurs, although one does not preclude the other. Historically, managing the means of production well guaranteed an income, but these days this seems less assured.
The concept of farmers being more skilled in farming than business per se is not unique to agricultural small business. For example a small plumbing business is often run by a plumber, not a sophisticated business manager. It is the same for most small businesses in every sector. If you are not a competent technician in your field of endeavour then you have a limited foundation for your small business. A plumbing business will fail if the operator cannot mend a pipe - and so a farming business will fail if a farmer sucks at production.
The point is that practical skills in your profession are a more important prerequisite in a small business operator than business skills per se might be in a manager in a large business. Similarly, a competent business manager in a large manufacturing firm may not be able to run a machine.
Of course this is a dramatic simplification of the notion of operating a business and belies the importance of many basic economic sensibilities. However, it begs an important question about the kinds of core skills and competencies that are now essential in farming that seem unreasonable to and indeed beyond the remit of many individuals.
Following this theme, it seems that the future of an individual farmer - and particularly the family business model - in agriculture is threatened by the diversity of skills now required to survive.
Indeed it is apparent that there are many people who actively support a new context for farmers as corporations.
Union leader Paul Howes highlighted this school of thought when he announced that the time of “Ma and Pa farmers” was over and that agriculture would need to be corporatised if it was to have a future.
A recent survey ranked farmers in the top 10 most trusted professions. I suspect that most people involved in the survey have a somewhat romantic notion of what a farmer is and how he or she operates. Sadly this is probably thanks more to media imaging than personal experience, nonetheless their perception of farmers and agriculture is probably fairly inconsistent with that of Mr Howes.
Public opinion meant Mr Howes’ public comment was a step too far politically. It is no good to have such an aggressive public view about the relevance of farmers, so politicians distanced themselves from this position. Behind the scenes though, his line of thinking has a following.
Interestingly though, there is a mounting body of evidence which suggests that migrating to larger corporate farming models does not increase sectoral gross production, real production efficiency or overall sustainability and potentially undermines all of these aspirations in the long term.
There is no doubt that corporate agriculture has a role to play, but it cannot replace the family farming unit. Mr Howes’ comments about “Ma and Pa farmer” were ignorant and misinformed for many reasons, not least because it fails to understand the real value of maintaining and fostering the commitment to the land that exists in small farming business.
I still get plenty of chances to annoy some of my mates who endure in the agri-political melee. Our conversations inevitably return to the common underlying issue of agricultural enterprise viability tempered with a resignation that the current business model is unsustainable, at a personal and enterprise level. Sadly, there is some desperation creeping into these conversations with increasingly frequent reports of young people (and I mean young people) purposefully opting out of the sector because of the inherent low income and high risk.
There are solutions to these problems, some of which I have discussed previously. However, the crisis has not yet reached a tipping point to generate real political commitment to address the underlying structural problems we face. Simply, there is a political gap between the stated commitment to maintain Australian agriculture and the need to meaningfully support Australian farmers.
In the meantime, the number of clearing sales in the paper seems to get bigger as we continue to lose human capital from the sector and, regardless of how much we talk it up, young people continue to migrate away from farming enterprise.