Steve Truman
If Australians don’t make a decision soon to actively support our food and fibre producers just like our manufacturing industries they will be be gone forever.
Agricultural Free Trade policy came to prominence in Rural Australia with the creation of the National farmers federation in 1979 as documented Here.
The problem is that the core of Free Trade is the concept of competitive advantage. Basically that means if a vegetable, cow, sheep, grain can be grown cheaper in a developing country than that’s where it should be grown. A simple example is that in manufacturing under Free Trade China is now the factory of the world.
The Free Trade ideology for our food and fibre producers runs deep through Australia’s regulators, Labor, Liberals and until recently the Nats, The NFF, State farming organizations, Commodity boards, the ACCC, NCP, FRIB -the Media – the lot actually. Why – because it produces cheap food for Australians.
Curiously the same Free Trade policies don’t apply to many other industries like the car industry where our governments continue to pour billions of dollars into subsidizing the 4 foreign car makers who operate in this country.
When challenged on their Free trade philosophy all will point the how farmers have benefited from the structural reforms – but not one of them can deny that farmers terms of trade have deteriorated significantly during the last three decades we have blindly pursued their Free Trade ideology.
Is it not self evident – the USA, Europe and Japan the three economic superpowers have not reduced tariffs and subsidies to their food and fibre producers, in fact they have massively increased them.
Why is that? Because they understand what is at the core of Free Trade – competitive advantage – They know that is if they open their Ag industries up to competitive third world countries their food producers will be wiped out. If they ever start to wonder about the consequences of doing that might be they need look no further than whats happened in Australia and New Zealand.
The problem is that trying to convince those who have been sold on the Free Trade ideology – believe it as a religion, much like the climate change alarmists – no amount of physical evidence will convince them to the contrary.
Farmers have always been resistant to Free Trade because they have seen their real income eroded annually over the past 30 years as a direct result of Australia’s Free Trade policies. In fact since their inception farmer numbers have decline from just over 300,000 to just over 100,000.
You might suppose that the 100,000 odd farmers that are left are bigger, more efficient and profitable.
To answer to that is look at the two of the biggest. AAco Australia’s largest cattle producer with huge economies of scale, the best properties, vertically integrated businesses and the best management practices can’t make any money. In their last 6 month result they reported an approx $6m loss. If AAco can’t make money from cattle – who can?
Prime Ag the consortium put together by Peter Cornish will $300m of investor money. Prime Ag owns some of the best farming country both dry land and irrigation in Australia. Once again, economies of scale, top land, great management. In their last 6 month result they reported a $280,000 profit. But when you looked at the result as part of that they booked a $1.9m interest from monies invested. – result net of investment income was a $1.6m loss. If Prime Ag can’t make money from cropping – who can?
Free Trade is a cancer that is eating away at our food and fibre producers. Like any cancer you can ignore it, pretend you haven’t got it, put up with the pain and think positive, but unless you start to treat it – it will kill you.
Its time we acknowledged the Free Trade cancer that is eating away at our food and fibre producers. Once we acknowledge it exists we can treat it. Maybe we have left it to long? But we must try. We must support our food and fibre producers.
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Agmates Editor & Founder Steve Truman.
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