Drought assistance – a slap in the face for other failed SMEs

A little rant from me on the inequity of the government’s drought assistance package.

If Agriculture Minister Barnaby Joyce wanted city folk to see the drought assistance for farm businesses announced today by his government as the same as any other disaster relief, he went about it entirely the wrong way.

Like many farm sector advocates, Joyce went straight for the violin, imploring urbanites to feel compassion for the mums and dads unable to put food on the table and the family businesses unable to meet their financial commitments because of the sustained dry conditions.

Some farmers are better at running profitable businesses than others. Knowing that the next big dry could be next month or next year they constantly plan ahead, putting in bores, stacking away hay, and growing crops that can be used for alternative feed if needed. Farm businesses that are marginally viable in the good times will not be able to afford these preparations, and should not be propped up during a difficult times just because they happen to be a family business or grow food.

Backing Joyce on the drought package, Tony Abbott claims unviable farms will not receive assistance. So it will be interesting to see what the definition of unviable is.

Growing food is not some holy calling. No other business sector is afforded protection because it involves mums, dads and family businesses. Plenty of family businesses – be they grocery stores, pharmacies, bakeries, book publishers, or restaurants – have been allowed to go to wall with nary a blink from the government. Many of those sectors are also exposed to the challenges that farmers claim make them a special case – being squeezed out by bigger entities along the supply chain, inability to achieve economies of scale, the high value of the dollar and being undercut by dumped product.

Yet when those challenges include a dry spell or drought – which let’s face it is hardly an uncommon occurrence in Australia – then apparently it’s time for disaster relief.

Joyce does no-one any favours by perpetuating the myth that running a farm business is somehow a more honourable calling than running a newsagent, veterinary surgery or bakery – yet many of these are family run small businesses too.

The farm sector and the nation would be better served by helping marginal farmers get out of the business. Safety issues bedevil the agricultural sector, and one of the contributing factors is because farmers under financial pressure won’t or can’t maintain or update their machinery. (Others are too stubborn to follow the safety instructions or wear protective gear).

For similar reasons, some farmers use cheap imported pesticides that haven’t met all the Australian regulatory requirements, or spray pesticides on crops for which they’re not registered to be used. Instead of taking their used chemical drums for recycling, too many farmers still dump or burn the drums elsewhere on their properties.

The romantic notion of all Australian farmers being noble agrarians, doing their best every day to produce cleaner and greener food than their foreign competitors just does not stack up. Sure there’s dodgy food imported from China and elsewhere but Australia has food regulations to deal with that, and if the regs aren’t up to scratch then they should be changed or better enforced.

Australia operates in a global market – for this reason we have access to cheaper clothes, furniture, electronics, whitegoods and cars from overseas. Why not cheap food too, as long as it meets safety standards? How is it in the national interest to save, say, the orange or potato growing industry, other than the jobs?  And if these jobs should be saved, how are they any different from the jobs in the dying auto manufacturing or book publishing industries?

This is a question the cattle and dairy industries need to tackle. Both sectors, like the rice and cotton growing industries, need considerable amounts of water to deliver their products. With our changing climate and movement of rainfall patterns to other parts of the nation, those sectors are going to have to either follow the rain or change the way they use water. Being propped up by the government during a dry spell is only postponing the inevitable.

Australia’s farm sector IS important. Our farmers export two thirds of what they grow and with the other third they meet nearly all of Australia’s agricultural needs (we are however a net importer of processed fruit and vegetables). Those parts of the industry that are strong and profitable will remain so during this and any other drought because they can afford to prepare for the worst.

But to single out (invariably smaller) farm businesses for special assistance because they feed us or are run by a family is essentially a slap in the face for all the other family run small and medium businesses who’ve been allowed to languish and fail because of competitive pressures, whether they be fair or unfair.