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.

Author: Drag0nista

Political columnist at The New Daily | Editor of Despatches & AusVotes 2019 | Author of On Merit, a book on the Liberals' *women problem*. Former Liberal staffer and industry lobbyist. Studying the entrails of federal politics since 1989.

11 thoughts on “Drought assistance – a slap in the face for other failed SMEs”

  1. OK, initially I was 50/50 on this piece as I am old fashioned & don’t want to rely on the rest of the world for our food. I love history & seriously, how many times can you actually go a whole century when the shit doesn’t hit the fan somehow & I doubt we can swerve that bullet. On the other hand, I am also a small business owner in a region where we are over 90% small business and so many have just quietly shut up shop in recent years, quietly dying without a whimper due to GFC, crap tourism with high dollar & all those flow on effects, so that side of me goes, get stuffed, what about us.

    I have many friends on farms near me & really do feel sorry for them. They were already struggling with & the ones I know are good at what they do, fulfill all regulations correctly. Sadly, a number of factors all in the past 4 years have slammed them.

    More imported food (which doesn’t have to fulfill the same stringent pest regulations we have to in this country);
    The Duopoly being vultures, both in pricing & in pouncing on properties they deem a good buys, (funny how some can hold off mortgage for a year, others get slammed 2 months behind…)
    Electricity rises over past decade have been a killer here in Queensland, so for growers (which my friends are), that alone is almost crippling for cold stores.
    Then to top it all off, have been hit by serious floods TWICE in 4 years.

    Sadly, not many of my mates though are not the ones who are going to benefit from this package SIGH So I guess we are pretty much in the same Small business boat in my area of the world 🙁

    Helping farmers it would be smarter to actually enforce overseas imports to have the same stringent requirements we have here to at least level the playing field. Not allow banks to be vultures in times of drought & do something about the duopoly.

    Rant over 😉

    1. Hear! Hear! Price for keeping the Nats on side and perpetuating the myths about farming.

    2. Yes I understand, but many other businesses are exposed to similar pressures. Banks are vultures to all SMEs BTW.

      Just a couple of other points to add to your thinking. Imported food DOES have to meet the stringent pest requirements that are imposed on Australian producers.

      Also, even though Coles and Woolies have put the screws on food producers, they’ve also required their suppliers to step up and meet higher quality chemical residue and environmental requirements e.g. all must participate in drum recycling.

  2. Whilst I’m sure small family businesses can sometimes do it tough, they don’t have to watch their stock dying by the thousands, and when we hear so many of them have taken their own lives, it must make you realise just how desperate the situation must be!

    1. It must be hard when your stock is a living thing, undoubtedly. But suicides due to financial pressure and failed businesses are not limited to the farm sector. We just don’t hear about them.

  3. First things first – to be fair I’ll check my biases at the door. My parents run a farm so this issue is personal to me.

    I understand what you’re saying about the romantic notions of Australian-made products not really holding up in the modern economy. We’re a first-world place which cannot compete on labour costs and that is going to come back to bite us in a number of industries. And I agree – there is a particular use of emotive language which gets brought out every time we talk about farming that doesn’t occur for other businesses. Finally, I know there are farmers out there who have outdated/unsafe work practices. But I’m going to disagree with the point of this article for two reasons.

    Number one – I think it’s important for Australia to grow it’s own food and for that food to be owned by Australian businesses. My understanding is that it is foreign investors who are generally the ones trying to buy up small family farms that go out of business. This is very smart of them – the rising Asian middle class needs to feed itself and it’s looking to Australia to do it. I’m not being xenophobic here – if China thinks our land is valuable then our land is valuable and we should keep it. It’s only going to get more valuable as the world population grows and I think we’d be wasting a terrific opportunity to grow an industry (one that’s not dependant on digging a finite amount of resources out of the ground) if we sell it off.

    Number two – I’m getting seriously worried about manually-skilled males. I’m a university-educated female myself so this issue doesn’t impact me but the mines are currently an incredibly large band-aid for the economy by empolying a huge number of guys with practical trades. We’re seeing the death of car manufacturing (and manufacturing in general), you seem to want the same approach with farming, and so my question is when the mines slow down where wil males be employed? By taking a slash-and-burn approach to industries in Australia, while it may be ideologically pure it it keeps targeting the same workforce sector – the manually skilled male. Plus the jobs we seem to be on the path to creating are in feminised areas such as healthcare. I’m not sure Australia is ready for a workforce where the balance is skews towards full-time female employemnt and underemployed males – talk about a culture shift. If that was to occur TA may have been more on the money about PPL that he could have ever imagined!

  4. I do think that other SME’s have missed out here. We have been through 3 floods recently and there are many businesses that feel some financial pain. Our box supplier has felt every flood. Freight companies feel our pain. Landmark felt our pain and helped by extending when we had to pay for our goods.they attached interest to our account.
    When it floods we lose 8 weeks of planting. You plant every week for the last 8 weeks. You have sacrificed the seed, fertiliser and poisons. It has cost you electricity to water your crop and diesel for all the tractor work. Last years flood, we planted in between the floods. So more loss. We were without income for more than 19 weeks. 8 weeks of planting + 8 weeks before new crop is ready to pick, then you wait a further 3 weeks for agent to pay you. During that time we had rates, electricity, landmark, house payments, car payments, living and credit card payments. We asked our federal government backed bank for help, but our books did not look so great and we needed three years of financials. They did however extend our credit card. If I was a public servant I would only need to produce a couple of pay slips. They did ask if we had off farm income. That would have helped.
    On pesticides the APVMA has 25 pages of regulations to get a chemical to approval stage. Not sure of the cost, but 25 pages worth of handling would cost a lot of money. We have to keep spray records. We just purchased an insecticide that cost a $500 for a litre. The company has to charge that to recoup the money it costs to get it approved in Australia. We have a disease that gets into a beans and there is no spray to fix it. Oh there is, but is illegal to use on beans. Imported produce is only randomly tested and the only produce that is fully tested is peanuts.
    When this area was in drought years ago, small crops were not given any assistance. Only farms with animals.
    I would love to go into our bank with my head held high and proudly say I am a farmer. But we can’t.we our frowned upon as we are not like the baker,the chemist, woolworths or Coles or a public servant. We are reliant on the weather, good or bad. Our income fluctuates.
    Freight is another thing that imports don’t have. We don’t send our product to southern markets as it cost us $4.40 plus fuel levy and that was about four years ago. I would imagine the buyer of imported products wears the freight costs. We also have to deal with PROTECTED wildlife. We have to jump through hoops and fill in a mountain of paperwork and report every 3 months. The government worker at the qld protection agency said” we were in their space..
    So who deserves the governments love. Is it the federal government guaranteed banks, spc, chocolates ,fish, cows, crops, cars? Who is right or wrong?
    I like the idea of Australian food and Australian manufactured food. I know how we grow produce to keep it safe.
    Woolworths is currently stocking Thaipine after weeks of no golden circle. I think thaipine is a Thai government company.
    Innovative comment 🙂
    We should have planted 30 acres of solar panels. No connection fee to the grid and a qld government 44 cent feed in tariff. I would not need a bank then.

  5. This excerpt from Catch-22 is pertinent:

    Major Major’s father was a sober God-fearing man whose idea of a good joke was to lie about his age. He was a long limbed farmer, a God-fearing, freedom-loving, law-abiding rugged individualist who held that federal aid to anyone but farmers was creeping socialism. He advocated thrift and hard work and disapproved of loose women who turned him down. His speciality was alfalfa, and he made a good thing out of not growing any. The government paid him well for every bushel of alfalfa he did not grow. The more alfalfa he did not grow, the more money the government gave him, and he spent every penny he didn’t earn on new land to increase the amount of alfalfa he did not produce. Major Major’s father worked without rest at not growing alfalfa. On long winter evenings he remained indoors and did not mend harness, and he sprang out of bed at the crack of noon every day just to make certain that the chores would not be done. He invested in land wisely and soon was not growing more alfalfa than any other man in the county. Neighbours sought him out for advice on all subjects, for he had made much money and was therefore wise. “As ye sow, so shall ye reap,” he counseled one and all, and everyone said, “Amen.”

    Major Major’s father was an outspoken champion of economy in government, provided it did not interfere with the sacred duty of government to pay farmers as much as they could get for all the alfalfa they produced that no one else wanted or for not producing any alfalfa at all. He was a proud and independent man who was opposed to unemployment insurance and never hesitated to whine, whimper, wheedle and extort for as much as he could get from whomever he could.

  6. Great point of view FIREPROXIMITYSUITWEARER.
    I think solar panel feed in tariffs is a bit like your alfalfa. Government gets to feel good by handing out tax payers money.
    So If I can add to my previous comment. solar panel feed in tariffs is the biggest government handout. So why does government think the rich who can afford these panels more worthy than the ones that are stuck with coal fired power. I just got my electricity bill and I will be paying it without any tier of government handouts.
    On manufacturing in Australia, we have been without a tractor for the last 3 1/2 weeks. Why? We didn’t buy an Aussie made tractor and the part has to be made in Korea. WHOOPS.

  7. Interesting ! Lets go the extra couple of Ks with this argument. Let’s stop full & part time subsidizing the musicians, journalists, artists of various sorts etc.. who gain their salaries from the tax payers via the ABC. Why not sell off the ABC & staff it with some real cheap journo’s & musicians etc from overseas….It could also run advertising to get revenue. This would save taxpayers a real bundle !

    I think the current ABC budget is over $700 million a year…

    If urban people do not recognise that that country people deserve a hand what disaster strikes.. We will quickly come to the same conclusion about the various grand schemes demanding tax payers funds in the cities

    Bill the Farmer

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