Now here’s a scary scenario – a vertically integrated food industry in which the food we eat is owned and controlled by the major supermarkets from the paddock to the cash register. The only thing stopping that happening right now is the efficiency of our family farmers. For efficiency, read cheap.
Farmers are price takers, not price setters. They take the price for their meat, fruit and vegetables that the major supermarkets are prepared to pay on any given day. That’s why they have to be efficient and that’s why we enjoy some of the cheapest food in the world.
But leave family farmers high and dry in this drought and future droughts and watch corporate agriculture emerge. Suddenly we could be faced with a situation where our entire food supply system is owned by a few multi-nationals. What would happen to prices at the cash register if corporate farms had to make a realistic profit? This is what the Prime Minister means when he talks about maintaining food security by helping out farmers in a drought.
While the drought relief numbers are big – another $714 million announced this week – in reality what we are talking about is a weekly dole cheque for a family that has little or no other income and an interest rate subsidy that helps farmers get into even more debt.
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Some commentators argue that farmers are the only group in the community to be bailed out by government when they get into trouble, but do they really want the people who grow their food to go to the wall – a tad myopic perhaps?
Of course the real answer to the financial problems faced by farmers is simple. Pay them more for the food they produce. Food has never been cheaper in real terms which means in effect farmers are continually subsidizing the community by providing a product at well below the profit levels that would be demanded by any other business sector.
If it worries you or offends your economic rationalism, think of drought relief as an investment in your future food security and perhaps a little payback to the people who have fed you so well and so inexpensively over the years.