Pollies: step up or step out

Rural debt has skyrocketed 75pc in less than a decade and farm gate returns are in alarming decline

THERE'S an old joke about an investigator from the Federal Department of Employment arriving at a property following claims the grazier wasn’t paying proper wages.

The investigator drives through the gate to the homestead, where the grazier has just pulled up for smoko.

“I need a list of your employees and how much you pay them,” the investigator says.

“Let me think,” the old grazier replies. “There are my stockmen who have been with me for six years. I pay them $900 a week plus free room and board.

“There is the cook who has been here for 18 months. I pay her $700 a week with free room and board.

“Then there's the half-wit who works 19 hours a day and does about 90 per cent of the work. He makes $10 per week, pays his own room and board and I buy him a bottle of rum every Friday night.”

'”The half-wit!” exclaims the investigator. “That’s the bloke I want to talk to!”

The old grazier wipes the sweat from his brow and tilts his head towards the investigator.

“Well, old mate, that would be me!”

The joke for many is art imitating life.

Life on the land is getting harder and harder for family partnerships and small corporate enterprises.

It is not uncommon to hear some weary landholders say they don’t expect their sons or daughters to remain in the family business.

Even that joke about the old grazier is now probably showing its age. These days it’s harder to find graziers that can afford to employ anybody.

Instead, more often than not, it is family members pulling the extra weight - the kids on break from school; the grandparents who have already battled costly succession planning; or the wife who somehow manages to juggle farm work with home duties and a job in-town.

Commentators have long predicted the decline of the family farm. Yet the agriculture sector has managed to defy the odds with each passing decade.

Despite the fact that iron ore and coal have long surpassed wool and wheat as the guideposts for Australia’s economic direction, agriculture is increasingly returning to the forefront of economic public policy.

There is some speculation that suggests economic growth in Asia - which will push the continent to account for as much as 70 per cent of global middle class food and fibre consumption by 2050 - will bring additional revenues of $710 billion (in 2011 dollars) to Australia over the next four decades.

These are very encouraging figures. But the earning capacity of each farming family will only increase if the sector’s foundations and fundamentals are strong.

The new Senate has generated a lot of commentary and headlines this month as it tests out its new found notoriety.

But once the Upper House wakes from this media bender, will it be the electorate left with the hangover?

Having sat in the parliament for the past fortnight, it is concerning to think there is an increasing potential that the apparent instability in the new-look Federal Senate could entangle the process of government in bureaucratic brinkmanship.

As each piece of legislation is blocked by a Senatorial Mexican standoff and each major government decision is scuffed by prolonged debate, so too are the intended cost savings for the small business and household budget.

This is wasted time that the average farming family cannot afford. For my money, this is a pox on our own house.

Rural debt has skyrocketed 75 per cent in less than a decade and farm gate returns are in alarming decline. No week goes by without some rumour of more properties unable to be re-financed.

The times call for swift and pragmatic policy that focuses on tangible outcomes. The public are sick to their back teeth of politicians not doing our job.

It will be difficult for my new Senate colleagues, of all political persuasions, to not become ensnared by the political grandstanding and power plays that is actively applauded by the Canberra press gallery.

But Australian voters are tired of personality and ego driven politics.

The majority of those among the new Senate crossbench have politically-conservative leanings - some have rural knowledge – and it is these individuals who should respect the clear mandate delivered by the electorate.

Antagonistic attitudes and obstructionist politics will only further strain the hip pockets of farmers at a time when their budgets are already at breaking point.

And rural Australians will neither forgive nor forget such political games when they next cast their vote.

I say to my colleagues, right across the chamber – do your job or do the nation a favour, and go home.

Barry O'Sullivan

Barry O'Sullivan

is a Queensland-based Senator for the Liberal National Party
Date: Newest first | Oldest first


8/08/2014 12:46:26 PM

You have contradicted yourself PayAttention. I said there was no bar against hedging under SD. You said I was wrong. Then you said you do not use derivatives. Your problem mate. The SD had no bar on growers using the futures derivatives market to forward hedge their sales to whoever, cash or pool. According to deregulate, if you do that you can fix your premium. So then it shouldn't matter how you sell your physical.
8/08/2014 7:30:45 AM

No JT - you did not. Without the option to sell grain to my pick of traders I was at the mercy of the single desk's incompetence. After the domestic market was deregulated those of you on the east coast had some options - not so for those of us in the west. I don't trade in futures - I use forward sales as I am comfortable. It works nicely, and all the risk is on my head.
7/08/2014 2:28:38 PM

PayAttention, you had the exact same ability under Single Desk to hedge your sales as you do now. So that means, for the few who oppose SD, you had the same opportunity under SD to sell forward and lock in prices then as now, but more importantly, those not wanting to take the big risks of selling something they did not have in the silo, the SD did all the hedging for them. So that shoots all the nonsense arguments down in flames!
7/08/2014 12:23:09 PM

Sorry I can't share your optimism wtf. Libs, Nats and Lib Dems are all about 'free market'. It's basically the powerful (financially and politically) against the rest with no umpire. You and I are in the middle, so we get squeezed, just not as badly as those on the low end. When there is a choice between the big end and farmers, these pollies have no allegiance to farmers. But they will hand out a few baubles while picking your pocket.
7/08/2014 11:17:38 AM

You are right bg, the problem is bigger than politics, its about a banking system which is fundamentally flawed, the focus has shifted from saving to viewing debt as wealth. The expansion of credit has led to a bubble (aided by neg gearing and other govt policies) which will blow up. We cant avoid the coming wave, but we can take steps to avoid it happening again. To get political now, I think the Austrian economic model offers that solution, if David Leyonhjelm and the coalition can come together on that one we may have a chance for developing a more sustainable economic model.
7/08/2014 11:14:21 AM

$45 behind Jock??? You forget that farmers are individuals running individual operations. Those who contracted grain sales back in March/April got ~$305-310+ (Vic Ports, APW wheat). Those who sold at the lows two weeks ago got in the $260s. Anyone selling this week is looking closer to a $280. A pool might have averaged anywhere between the two values - hurting those who sold at the highs and helping those who didn't market their grain properly.
7/08/2014 10:31:55 AM

Farmers have been in a cost/price squeeze for as long as I can remember. Anyone who thinks that the Nats will solve this is dreaming. Don't believe me, look at the statistics on farm defaults/forced sales under LNP and ALP leadership. Barry is just looking for a fall guy for when the Nats fail to deliver.
Jock Munro
7/08/2014 9:24:55 AM

Deregular, Did you know that AWB Ltd was 'one of the best' at managing growers' risk through its hedging programs? It also had a sea freight chartering service and a seat in the Chicago exchange which I believe, was sold under the then Chair of AWB I Ian Donge's watch.( $15 million price tag). My informant is telling me that we are approximately $45.00 behind this year without the national pool.
7/08/2014 8:21:06 AM

Basis is real demand and of course growers will be keen sellers if the basis brings the overall price up to attractive levels. But thats the point, manipulation is taking base prices down in Chicago, whilst real demand bids in physical markets. Same thing happens in gold and silver markets. Futures markets are where wars are won these days, hence the importance of being in control of the prining presses. You can manufacture deflation when inflationary pressures should be in control. So long as there is faith in paper this will always be the case.
7/08/2014 6:15:00 AM

If the US price is dropped and our farmers are offered a better local price via the basis, are they not keen sellers? to me that would be a way of increasing sales/purchases prior to harvest by influencing the US price and using basis as the carrot, ie they want the grain contracted now (for whatever reason? (I suspect further fixing)) and aren't prepared to wait until our harvest.
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Bush mattersBush matters - LNP Senator Barry O'Sullivan tackles the issues facing Aussie primary producers and people across rural and regional Australia.


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