Global Food Forum

A recent advertisement for a global food forum caught my attention recently.  The conference is being organised by The Australian newspaper with an impressive line-up of speakers including the Chief Executive Officer of News Limited, Kim Williams and the former Governor-General Michael Jeffery.  The heads of a few food manufacturing companies are on the speaker list together with the odd politician, journalists and bankers. 

The notable omission from the speaker list is of course those involved directly in food production – a farmer or two.  It is difficult to imagine any other industry where those directly involved in the subject concerned are not involved in the conference.  Can you imagine a medical conference without doctors on the speaking list or a legal conference without a lawyer being involved?  Perhaps a media conference without a newspaper editor or executive on the speaker list, or a mining conference without a miner? 

Only a few of the speakers appear to have a background in agricultural science or agricultural economics which is also surprising. 

So why is it that farmers do not get a seat at the table for a conference talking about food production and opportunities for Australian food production?  There are a host of reasons for this including: 

·         Farmers are not good at blowing their own trumpets and telling their story to the wider community. 

·         Farming is incorrectly perceived as a low technology profession. 

·         The lack of political clout that farmers wield and thus attention paid to the sector by Governments. 

·         That Australia has always produced a large amount of primary produce relative to its population size and will continue to do so. 

It is good to see such a conference taking place in Australia and that it involves a number of high-profile individuals speaking about the food industry.  It is just a shame that the integral role farmers play in food production is not considered to be that important. 

FURTHER READING

Lyndsey Smith (2013)  The Most Powerful People in Food:  Not Farmers.  http://www.realagriculture.com/2013/02/the-most-powerful-people-in-food-not-farmers/

 

Never a dull moment

Just when you think things are quietening down, I received an email from a meteorologist about a forthcoming cyclone.  Such is the information available to meteorologists now he was able to tell me that a cyclone was likely to affect us in about one weeks’ time.  This prediction was as a result of looking at a Tropical Low that was sitting more than one thousand kilometres from us. 

It is now a few days later so preparations are now on in earnest.  Being on the most cyclone prone coast in Australia preparations for cyclones are well rehearsed.  These involve the following activities: 

-          Tying down the windmills around the property

-          Tying down the sheds

-          Putting all the vehicles undercover

-          Cleaning up around the homestead so that there is no debris lying around.

With these activities underway we sweat on every update from the Bureau of Meteorology.  Updates are currently coming at six hourly intervals – these will increase to three hourly intervals as the cyclone intensifies and comes closer to the coast. 

Cyclones are a mixed blessing in Northern Australia being welcome for the rain they bring but being feared for the destruction they deliver.  The best we can hope for is rain and not too much wind.  With this cyclone expected to be severe (ie. category 3, 4 or 5), that looks to be a forlorn hope.

Commodity Prices Below Cost of Production

A news item on ABC Rural caught my attention recently reporting that the price for watermelons had fallen below the cost of production.  The story pointed out the obvious difficulties for producers. 

A more newsworthy story I felt would have been if the price of an agricultural commodity had risen above the cost of production.  Watermelon producers like other horticultural producers have been battling cheap imports from Asian countries.  These countries have the obvious advantage of cheap labour and generally far less regulation including environmental regulations such as withholding periods for herbicides. 

The strength of the Australian dollar has also been a significant issue for all primary producers.  In the case of horticultural producers, it makes imports cheaper and exports much more difficult. 

Primary producers in other parts of the world have assistance from their Governments in the form of tariffs, import quotas and direct payments to help their farmers cope with these competitive pressures.  No such good fortune exists for the Australian producer.  Not only is there no assistance from Governments in Australia, in many cases there is outright obstruction of primary producers. 

 

In my own industry, the cattle industry in the north of Australia, the industry has been brought to its knees by various Government policies including the ban on live exports to Indonesia.  -

Australia is a country with mountains of regulation.  With three layers of Government, industries such as agriculture face the prospect of drowning in all the regulation.  In some cases, companies benefit from regulations such as the Australian Stock Exchange where competition from other players is limited through Government regulation. 

Back to the topic of this post and farmers receiving below the cost of production for their output.  What can be done about this?  I certainly would not advocate for subsidies or import quotas like farmers receive in other countries. 

However, there are a host of policies that would make agricultural industries more competitive including:

-          Commitment to publicly funded research

-          Removing long-term assistance for other industries.

-          Reducing the excessive amount of Government regulation.

-          Encouraging investment in Australia by addressing sovereign risk issues rather than discouraging it. 

-          Addressing the excessive market power of the major supermarket chains. 

I could keep going on and on with policy suggestions, but what we need initially is Governments at all three levels to acknowledge that there is a problem and commit to doing something about it. 

My Country

“I love a sunburnt country, A land of sweeping plains, Of ragged mountain ranges, Of droughts and flooding rains.”

The famous lines from Dorothea Mackellar’s poem “My Country” often runs through my head as I drive around the property.  We do not have any mountain ranges here, but we do have plenty of sweeping plains. 

The strange thing at the moment we seem to have flooding rains and droughts at the same time.  Below is a photo taken at the northern end of the property in the last few days showing a few calves enjoying the green grass. 

 

Incredibly the photo below was taken just one day later showing a fire which had started as a result of a lightning strike.  This was taken towards the southern end of the property where obviously much less rainfall had been received. 

 

Flooding rains are a part of the landscape up here – between Broome and Exmouth in Western Australia is the most cyclone prone coastline in Australia.  Unfortunately droughts are also part of the scene up here as they are for all of Australia.  However, It is very unusual to have both events seemingly occurring at the same time. 

No Competition for the Australian Stock Exchange

While seemingly unrelated to the activities of a pastoralist in Northern Australia, the article did capture my attention.  It is yet another example of efficient lobbying of the Government gets the desired outcome for a particular company.  In this case the ASX will not face the sort of competitive pressures that the rest of us in business face on a daily basis. 

It never ceases to amaze me that Governments of all political persuasions are happy for certain industries to face the blow torch of competition but other more favoured industries do not.  In the agricultural sector the winds of competition blew through many years ago with the dismantling of statutory marketing authorities and removal of other competitive restrictions such as the export monopoly on wheat held by the former Australian Wheat Board. 

There remains a few favoured companies and industries where politicians appear too afraid to expose them to full competition.  ASX is one such company which retains this piece of legislative impediment to competition to help it generate profits for its shareholders.  Sectors such as the car industry continue to be beneficiaries of Government largesse in many different ways. 

In other sectors without the good fortune of Government protection we have to battle on as best we can. 

Getting Agriculture on the Political Agenda

With two election campaigns underway in Western Australia, one for a state election in March 2013 and the Federal election scheduled for September 2013, it promises to be a long year of promises.  For the farm sector, this often means rhetoric from both sides of politics usually relating to capturing opportunities that will arise in the Asian century. 

Various farm lobby groups including the National Farmers Federation have called for agriculture to be put higher on the national agenda.  Most farmers I have spoken to would agree with this sentiment but what does it actually mean and what policy outcomes will result? 

Many in the rural sector feel completely disenfranchised at the moment.  Issues such as the live export ban, the ramifications of which are still being felt by those in the industry, and the milk discounting saga have many feeling disillusioned as well as under pressure financially. 

Here in Western Australia, the State Government (through a National Party minister) put up pastoral lease rents by up to 700 per cent and with our local Government continuing to put rates up and providing no services, we have copped it from all angles. 

Politicians are quick to throw around phrases like “Australia becoming the food bowl of Asia” but are much slower to put in position policies that may assist the sector.  Indeed many of the policies put in place recently will make it harder for Australia to become the food bowl of Asia – consider the mistrust of Australia by Indonesia as a result of the live export ban. 

Getting Agriculture back on the political agenda really means that rural Australia will not be forgotten by our political leaders.  When decisions are taken the consequences of these decisions are fully considered and not taken to appease minority groups.  In addition, the ramifications of actions need to be thought through.  Cheap milk from supermarkets may be good for consumers in the short term, but the long term consequences will be fewer dairy farmers and more expensive milk. 

There are many policy decisions that could be taken by all three levels of Government that would increase confidence in the sector and demonstrate that agriculture is back on the political agenda.  These include:

·         Better engagement with trading partners including Indonesia

·         Commitment to publicly funded agricultural research

·         Restriction on the market power of the supermarket duopoly

·         Reduction in Government charges. 

·         Reduction in Government regulation. 

·         Commitment to training. 

The list could go on and on, however, the reality is that it will be difficult to achieve a higher profile for agriculture given the minimal voting power of farmers.  To achieve the higher profile we need effective lobbying from representative groups including the National Farmers Federation, supported by strong membership of the various organisations.  In addition, there needs to be actions at the grass roots from individual primary producers. 

In the end all most farmers want is a “fair go” from Government at all levels – we are not getting that at present.