What is a drought?

topcropper said:

We are very very self sufficient in food. So self sufficient that we export 60 % of what we produce and this helps our trade deficit. Per head of population we would be one of the biggest, if not the biggest food surplus countries.

Africa!!! Export food to us? Your joking right!

Import food? Now maybe I'm a fool, but why the hell would we want to import food? What do we export beside minerals and energy to pay for the imported food? What are we producing now in the cities that we export? You give me a list of stuff that we can swap as trade so that we can import food. Our current account deficit is already shocking and if it wasn't for the resource boom, well, you tell me.

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I was just recalling another post: something about how we need farming so that we can be self sufficient for political reasons.

Since we're net exporters, surely we can cut farming in the marginal areas and use those subsidies to develop other industries instead. The government seems to be taking a 'all of nothing' policy towards farmers: i.e. we subsidise them no matter how marginal the land or whether we think the drought will just get worse next year.

The CAD is an interesting issue. I wonder (and I have no idea) whether developing more value added industries will help the CAD more than farming.
Alex

alexlee said:

Why not just let the farms fail and channel more water to the cities?

Alex

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Why not just catch all the water that now runs off? Sydney gets nearly a meter of rain a year! That's a hell of a lot of rain. Hundreds of thousands of litres of water runs off the average house a year. ***THATS ONE HOUSE***. What about the roads and pavements too.

Currently it all just runs into the ocean, waisted. City people can do more for themselves besides just figuring out who to take more water off.

See ya's.

alexlee said:

The CAD is an interesting issue. I wonder (and I have no idea) whether developing more value added industries will help the CAD more than farming.
Alex

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Yep, great idea.

City people? Any ideas? What are we going to produce in the cities to export to pay for our imports.

Less than 4% of the population are farmers producing 16% of our exports. A similar number of miners are producing 50% of our exports. Yep, Ideas please. What are we going to do in the cities?

See ya's.

topcropper said:

City people? Any ideas? What are we going to produce in the cities to export to pay for our imports.

See ya's.

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How about water!

Marginal Areas

We would be considered marginal, the soil type (sand), erosion is a factor.
But it's not cut and dried, black and white...sort of.

Australian farmers are among the most productive and efficient primary producers in the world...they do a really good job with what they have. The last five years drought up here has really put them under the pump and they are still turning out some of the worlds best grain and meat...(at competitive prices!) that is a credit to them.

They (the farmers) have also embraced new farming systems and practices in an effort to minimise erosion and utilise the smartest way to grow produce without destroying the land they love.

The thing is the farmers out here love their land and work with a passion, and most are constantly searching for better ways to farm...efficient on top of efficient...with all due respect to the experts that believe our area is not really sustainable farming land...they have not even visited here to see the improvements and advances made by primary producers...even in this last five year period the farmers and their families are doing what they did three years ago better...more and more direct drill sowing as opposed to continous cropping/fallowing... and that has come at huge expense to them, it's a change in farming practices that requires large amounts of money to acquire the appropiate machinery to do this...I have never ever seen an industry like the farming community get hit with so much change/drought/cashflow troubles/low grain, meat prices...you name it, they are copping it and still perform and work so efficiently and still striving for better ways to do what they love.
People that live in cities and towns sadly, get to hear and see what media want them to see and hear...and what experts believe, and it is all valid, we can all do better at anything we do, striving for excellence is good..

But, it is advisable to see and meet people from farming communities and get a comprehensive grasp of what the problems and solutions maybe facing people..it's all complex, so many different facets, different issues, (oh, yeah. rain would be good too).

It's difficult to describe and explain that this area is actually a better place than it was five years ago, farmers believe it or not have learnt and are learning a lot from this drought...we should be very proud of our farmers and their tenacity and determination and desire to seek and do thing better for themselves and their land.

topcropper said:

Yep, great idea.

City people? Any ideas? What are we going to produce in the cities to export to pay for our imports.

Less than 4% of the population are farmers producing 16% of our exports. A similar number of miners are producing 60% of our exports. Yep, Ideas please. What are we going to do in the cities?

See ya's.

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I think it is imperative that Australia develops more non ag value add exports. Developing nations continue to whittle away at our traditional agricultural markets (Sth America with sugar and beef). Further, agriculture profits are concentrated into the hands of a few, and provide comparatively little work for 20 million Aussies.

As for what we do....Because the electorate, media, and pollies worry about the wrong issues, or get tied up in appealing to the electorate with anachronistic sentimentalities (she'll be right mate living close to the land fables), we have missed focusing on a more forward thinking adaptive approach to economic sustainability. We missed IT and telecommunications big time, while the USA, Japan, Ireland, and Finland didn't.

We have totally under recognised opportunities in pharmaceuticals. The USA, UK, and Europe dominate this highly profitable and large growth industry.

Despite what the doomers and gloomers say, gene therapy is the next big opportunity in medicine. And there are several centers in Australia that are world leaders in that.

Fusion power and battery technology are other areas of research with enormous potential payoff.

This whole thread has totally stunned me.

Where are all these crazy ideas coming from? The media. That's where.

I don't read the Sydney papers thankfully, so I can't comment on the crap they are printing, however I do read the AFR and the sunday papers.

In the weekend AFR there was a fairly good article on page 4. I agreed with nearly all that. On page 63 was a ridiculous article by Brian Toohey. He claims that the average broadacre farm lost $2000 a year for the last 30 years. The total return on capital since 1990 has been 0.88% or 2.4% including capital appreciation. What a load of crap! No wonder you all think farmers are subsidised! We would have to be to survive with those figures.

Another example of the bias in that article was when they mentioned that the volume of production has doubled in 30 years, however debt has increased 9 times. What about use value of production rather than just volume of production. Volume of production on it's own is completely meaningless. Considering that prime high rainfall land is being taken away for residential, hobby farm and useless horse studs, and the fair dinkum producing land being pushed out into lower rainfall areas, then a doubleing in production is a great effort I think.

In the Sun Herald last week was a story about Burrinjuck Dam. This dam was built to supply irrigation. The story said that the dam was bone dry, quote.. "there is no dam, no water, just a silent eerie scene featuring abandonded boats, empty caravans and run-down holiday cottages"....with a picture of a man sitting on dirt and some boats sitting on dirt, presumably the bottom. Page 16.
Then in last Sundays Herald is a letter from some poor bloke who runs Burrinjuck waters State Park. He has to explain that he has been hit by customers cancelling their holidays. The dam is not empty. It has 30 percent, and the place is not run down at all. Just as pretty as ever. page 30. Once more a load of crap. The people running this holiday park should sue the paper.

This dam was built to supply irrigation. If it wasn't there, the water would have flowed out to sea in the last flood, months, or even years ago.

In this thread has been comments about taking water from farmers to send to the city, farmers being subsidised, talk of importing food, from Africa for gods sake. Talk that farmers have been given their land. A whole heap of crap and I'm totally dumbfounded in the comments and how little people on this forum know about agriculture and what farmers do.



To even things up a bit, have a read of this nice article from Macquarie bank. This gives the true picture of agriculture in Australia. I notice the returns given match up very closely with the stockmarket. It is also interesting that the rural property value cycle does not follow rural commodities or droughts, it follows city property cycles, just delayed, just as I have mentioned numerous times. If you are smart you may be able to use this info in the next property cycle.

www.macquarie.com.au/au/property/acrobat/mdrpf_information.pdf

Please, have a think about what you are reading in the media. It is just being written to sell papers, and I don't like being thought of as some sort of parrasite on the economy.

See ya's.

topcropper said:

This gives the true picture of agriculture in Australia. I notice the returns given match up very closely with the stockmarket. It is also interesting that the rural property value cycle does not follow rural commodities or droughts, it follows city property cycles, just delayed, just as I have mentioned numerous times

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Topcropper,Thanks for the link to Macquire .com and when you look the way Sydney
house prices compare over the past ten years to Broadcare
property values what you are saying makes a lot sense ,btw i do hold
MBL .good luck willair.

Having grown up on a beef cattle farm and knowing a number of farmers in NSW who are currently experiencing their worst season on record, I feel compelled to write something in the farmers' defence and highlight what these supposed "free handouts" are really all about. I was sickened the other night to watch an interview on TV...a farmer was reduced to tears defending himself and his family for not being bludgers by accepting government assistance. What has become of our society that people would browbeat an individual who is about to lose their whole livelihood through an extended drought; a circumstance that is out of their control and does not reflect the amount of hard work and tears undertaken to-date to just keep their head above water???

thefirstbruce said:

Jaffa, recessions come around more often than droughts and adversely effect more small businesses than droughts.... But the government doesn't bail out those businesses. Further, when the govt drops tariff protection and puts a whole sector out of business, or drives it off shore to survive, the govt doesn't go around offering those businesses handouts.

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Why has everyone got the idea farmers are receiving all these amazing freebies? Have you actually looked up what the assistance actually consists of? I've taken the liberty of attaching a Drought Assistance Programs pdf in an attempt to quash this wholly un-Australian "we're not getting anything so why should they?" attitude. Unbelievable. <shakes head>

http://www.daff.gov.au/corporate_do...ht/Drought Assistance Measures Oct 06 web.pdf

Looking through this, the assistance is in the form of:

• Interest rate subsidies (subject to off-farm asset testing, so if the farmer _has_ invested in coastal real estate he/she won't be eligible for it!)

• Exceptional circumstances relief payment (to meet basic living expenses and buy household water. Paid at the equivalent of Newstart Allowances, which for a couple with children is $455.30/fortnight. Certainly not a king's ransom. Again, this is subject to income and asset testing, making most farmers ineligible.)

• Transport subsidies for stock feed and water

• Rural mental health info service & counselling (I heard that a farmer is committing suicide every 4 days! So incredibly sad!)

• Access to Job Search support for redundant rural workers

• Apprenticeships incentives program (to encourage continued skills development and employment in drought areas)

This assistance looks pretty standard to me. If you are a small business owner in the city and go bankrupt you have the same access to Centrelink payments, counselling and Job Search that the farmer now has.

thefirstbruce said:

For decades there has been a lot of slack in farming, and many farms are just not viable. Even moreso, if interest was being paid on the land, rather then father handing it down to son for nicks.

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I think you'll find there are many farmers who did not get a free ride on daddy's purse strings and are mortgaged to the hilt 'cos they went it alone and purchased land. My folks are certainly one of those cases. Their annual interest payments are enough to make anyone wince and one bad year will have the bank manager banging at the door. I don't think many people realise farmers often only receive one 'pay check' per year. Our farm operates that way...a whole year's work is subject to auction prices at our annual sale. Regardless of the hammer price we've still had to spend money to get the cattle to the sale in the first place, and if the market for the cattle is not there (e.g. there's a drought in NSW and farmers are not restocking their land, like right now!), prices are simply not what they need to be. While my folks in WA are not directly affected by the drought here on the east coast, they are understandably nervous about how their sale in January will be indirectly affected.

thefirstbruce said:

Whether farmers like it or not, they have to change their ways and improve productivity, just like every other sector has had to...I met many farmers who realized they could make better money in the mines for 3-6 months rather then hang around at home.

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I definitely agree that the farmers need to continue to evolve and improve their productivity. This applies with every industry and I'm sure farmers with marginally viable businesses are having a long, hard think about getting out of the game. But on the other side of the coin, there are many many farming businesses that are viable in the long-term but have be devastated by drought. A lifetime's worth of work decimated by nature. Do my siblings or I want to take over the farm? Not a chance! We don't have the same passion for the land that my father has and that level of passion is so important to carry you through the bad times. 80 hour weeks, no weekends and potentially no income...no thanks! My little brother has the right idea and is about to take off to the mines. When they are ready to retire, I hope my parents sell up everything and finally enjoy all their hard work. They deserve to.

thefirstbruce said:

Finally, I know a lot of farmers that look down their nose at townies....and do not support local town business.

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Really??? Who are these farmers??? My experience with the farming community is that the farmers need the local town businesses as much as the businesses need the farmers. The businesses supply food, clothing, machinery and parts, stock feed, crop seed, fertiliser, finance, insurance etc to the farming community. And in return the farming community keeps the local town alive and kicking. I've seen this first hand in WA around the area I grew up. Dairy and beef farmers alike sold up and moved to the city, the farm was planted with blue gums funded by city-slicker super and the whole community suffered as a result. A farm that once supported a family with 4 kids and employed 2~3 people from other families in the area was now managed by a suit in an office 200km away. Times that by multiple farms and suddenly the local store is not selling enough milk, bread and papers to be profitable, the local school closes, the local mechanic has to let go of his apprentice...I don't think people realise that drought is not just a problem for the individual farmer, it's a heartache for the whole community.

topcropper said:

Please, have a think about what you are reading in the media. It is just being written to sell papers, and I don't like being thought of as some sort of parasite on the economy.

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The media has a lot to answer for and some of the articles I've read and interviews I've seen have been severely skewed. My heart goes out to all the farmers currently suffering through this drought and my thoughts are with you. You can be assured at least one person recognises and understands the effort put into this labour of love. Hang in there!

alexlee said:

I don't buy the argument that not being self-sufficient in food makes us vulnerable. Not when there are so many countries that DO produce a food surplus who would gladly trade with us. There are significant agricultural markets opening up in Africa, for example, that would love more customers. Modern shipping makes tranport cheap and efficient. Would we pay more for food? Possibly, but it would be offset by increased economic strengh by creating permanent industries instead of just plugging an ever widening hole.

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Alex, I normally agree with the majority of what you write but sheesh...you're on your own on this one. Do the words traceability, food safety, quality assurance and organic growing mean nothing to you?

I work with foreign entities looking to establish business in Australia and a growing proportion of them are looking towards Australia to secure a safe, reliable food supply. Just like minerals, coal and other resources they see the importance of securing their portion now before the giant that is China does. Our farming and agribusiness industry is one of the cleanest and highest quality in the world. Why buy from elsewhere when we already have the best right here?!

Great work Siege

I agree. I can't believe what some posters here have said here. The importing from Africa is the best yet.


OK, another bit of crap I will clear up. The Diesel Tax Rebate. I don't know how many times I've read or heard how farmers get subsidies because they get cheap fuel. This is a tax rebate. It is given back because farmers machinery is not using the roads. The tax goes to road repair. If I paid the full price for diesel I would be subsidising everyone else,..

"Diesel Fuel Rebate Scheme
The DFRS provides a rebate(2) of the excise (or customs) duty paid on diesel and like fuels(3) used in certain businesses and other activities. Eligible business activities are rail and marine transport, mining, agriculture, forestry and fishing. Other eligible activities are electricity generation for residences, and the operation of hospitals, nursing and aged care homes and other medical institutions."

So not just farmers get this. But, we get subsidised don't we! What a joke. I pay more than my share of fuel tax's. When I use my own truck I pay the full rate. We have to keep a log book. Grain that goes to market with contractors, I pay the tax then too.



Farmers get farourable tax treatment as they can average their profits over 5 years. That is unfair.

No it's not. If a farmer couldn't average his wages, then he would always be in the highest tax bracket. For example, a farmer may make half a million profit one year, lose a quarter of a million the next, and make nothing the next three years. He would pay the full rate for the bumper year, then nothing the others. Therefore he is paying the full rate of tax when in reality he has only made an average wage.

See ya's.

Siege said:

Alex, I normally agree with the majority of what you write but sheesh...you're on your own on this one. Do the words traceability, food safety, quality assurance and organic growing mean nothing to you?

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Most likely because in this case I'm posting on very little knowledge. Most times I have more knowledge about the subject I'm posting on. My post is very much based on the ideas I read in the book 'Collapse' by Jared Diamond. He has a brilliant theoretical framework, but of course it doesn't necessarily work in practice.

I'm also tainted by the fact that I'm in London and many items in the supermarket are imported. Most packs of veges, fruit, etc have labels stating country of origin. Though given the total lack of food control at Heathrow, I'm doubtful about Britain's ag policy.
Alex

alexlee said:

Most likely because in this case I'm posting on very little knowledge. Most times I have more knowledge about the subject I'm posting on.

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That's my whole point! People have a tendency to read something in a book/newspaper or see an interview on tv and accept that as gospel. There is sooooo much more to the food/farming/drought debate than what is being portrayed in the media & I implore the major of people who have posted in this thread to reconsider their position. If you're going to have an opinion, at least make it a well-informed one.

If you guys just want to slap each other on the back, go for it.

TC, you have already said you agree with the AFR article on P4. That article said around 20% of farmers are inefficient and need to get out. 20% were probably inefficient 30 years ago. How many do you think will be inefficient in another 30 years? Inefficiency outside of agriculture seems to kill businesses quicker.

Siege, I find what you say illogical. On one hand you state your father's farm isn't viable. You have admitted you and your brothers don't want to continue in your father's footsteps. I suggest you reconcile why not with your defence of the economic robustness of farming.

If 100 100 acre farms could support 100 families 30 years ago, and today that same land supports 20 families on 20 farms, then I wonder what you will think in 30 years time when that original 10,000 acres can only support 1 family.

TC, will you be selling out to Macquarie when they come knocking? They've stated they don't want the risk of running farm enterprises (does that make them risk averse or what), just the land underneath. Seems like a lot of farmers will be enticed into reverse annuities through Macquarie....and will end up managers, not owners.

thefirstbruce said:

TC, you have already said you agree with the AFR article on P4. That article said around 20% of farmers are inefficient and need to get out. 20% were probably inefficient 30 years ago. How many do you think will be inefficient in another 30 years? Inefficiency outside of agriculture seems to kill businesses quicker.

.

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Well, go to my second post on this thread. I explained that farmers have continually gone bust, the more efficient neighbours bought them out, farms got bigger. Farms have been getting bigger and more efficient for 100 years. Whats the difference now?

Yep, farms are just like any other business.

Glad that we finally agree.

Hang on a minute. Maybe we don't agree. Aren't you trying to say that farmers are different and are on easy street?

Cheers.

topcropper said:

Farms have been getting bigger and more efficient for 100 years. Whats the difference now?

Yep, farms are just like any other business.

Glad that we finally agree.

Cheers.

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My point has always been that Aussie farms have had 150 years and a lot of free CSIRO research and financial advice to evolve intelligent risk management of adverse climatic condtions.

As for current farmers being on easy street TC, at least you are still on the street. There are a lot of other industries no longer on the street in Australia - shoes, clothing, ship building, printing, indeed most manufacturing...

and the guys that lost those jobs didn't get rate concessions from the bank to hold an asset growing at 10%pa.

thefirstbruce said:

TC, will you be selling out to Macquarie when they come knocking? They've stated they don't want the risk of running farm enterprises (does that make them risk averse or what), just the land underneath. Seems like a lot of farmers will be enticed into reverse annuities through Macquarie....and will end up managers, not owners.

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I would consider it if they offered enough. Anything is for sale at a price. Farming as an investment is no better or worse than the stockmarket, but much less work in shares. Farming is much more exciting and mentally rewarding. Owning a part of Australia and heaps of land for the kids and dirtbikes is another bonus.

I'm not surprised that they are only interested in the land. It has shown great capital gains for many years, and might explain why so many cashed up city investors are buying land near me. I have 4 ASX 200 CEO's or owners owning land within 50 k's. It is all an opportunity. These guys have absolutely no idea about what to do and how to run a farm.

The country I lease is owned by a former QC. He now lives here, loves it, and has no intention of running the place. He is happy to lease the place to me and get the 10% capital gain per year. He gets a neat, well run farm to show off to all his mates.

I have thought about managing places. I could probably fit it in if I employed someone to take over a lot of my jobs on my own farm. Probably won't though.

In England and the US, most farmers are managers. They manage places for the wealthy owners. It is not a development that I think is good, but I suppose we will follow the same path. It is all an opportunity for me.

Cheers.

thefirstbruce said:

There are a lot of other industries no longer on the street in Australia - shoes, clothing, ship building, printing, indeed most manufacturing...

.

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That is correct. It is survival of the fittest out there. These industries were never likely to make it when China and the rest of Asia took off.

Whats the bet that agriculture and mining will still be big industries in 100 years in this country. We will always have the advantage as long as it involves getting stuff out of the ground. The secret is finding what you are good at.

This is the lucky country.

See ya's.

alexlee said:

I read somewhere that most of our water (>90%) is actually used by farms, growing crops that really aren't that suited to the Australian climate and soil in the first place (because the original european farmers wanted to recreate the British lifestyle and farm crops that did well in Britain). Rice, for example, is generally grown in much wetter countries. Why not just let the farms fail and channel more water to the cities?

Alex

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G'day Alex.

Your post did send me off a bit yesterday. Thinking overnight, I can understand why you would have these views. Once again it is the media.

The media shows city viewers some cotton grower pumping water out of a river with 4 huge twelve inch pumps and a 500 horsepower diesel motor, and the obvious reaction by everyone is that this irrigator is just a greedy environmental vandal.

It wouldn't take the media much to make it a balanced story and to explain that 50 k's upsteam was a dam that was built 40 years ago for the sole purpose of irrigating crops. The water that was being pumped from the river was released 2 days ago and was stored from the last flood two years ago. A bit extra has been released for environmental flow and stock and station use, and that if it wasn't for the dam upstream, that river would possibly be completely dry.

A lot of rivers this summer will have water flowing down them only because it has been captured for irrigation use.

Obviously, capturing flood water and storing for irrigation is not a win win for everyone. The dam probably made that flood smaller, some floodplain land may have missed out on a flooding a thousand k's away and some river red gums will be dryer than they should have been. Is a few river red gums worth a few billion dollars of export income from cotton or whatever? I would say yes, but others would disagree. I am someone who would also say that it is worth sacrificing a life of a man to save ten others. Others wouldn't. One thing I would definately disagree with would be sending this water to a city, so that those city people could water their lawns and continue to let all their rain run down the drain.

I can have a completely unbiased view about this. I am not an irrigator, and have no intention of being one. I don't grow cotton either.


Cheers mate.