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Jul 6, 2015

Agriculture white paper pursues Nationals fantasies, not competition

The government's white paper on agricultural competitiveness is about propping up an outdated family farm model, not competition.


The cover of Barnaby Joyce’s long-delayed Agricultural Competitiveness White Paper doesn’t merely feature the expected bucolic scene, but a picture altogether more loaded with meaning: a man and woman, with three children, making their way up a grassy slope.

Who knows what they’ll encounter on the other side of that knoll, but the government has their back, because while the paper might seem to be about competitiveness, in fact it’s about families (obviously, heterosexual families with kids, not the ones Asians disapprove of). “Families” get mentioned over 50 times in the document, frequently in the context of keeping “farming families” at the centre of agriculture, keeping them profitable and helping them through hard times.

This is somewhat different to the emphasis of the Productivity Commission’s submission to the taskforce that produced the paper, more than a year ago. The PC doesn’t mention families much — in fact, barely at all. What it does do is explain that in terms of productivity, Australian agriculture has been hugely successful in recent decades, and that part of that process has been a huge drop in farm numbers “as many smaller farms have exited the sector. These developments have strengthened Australia’s agricultural sector.”

That of course is anathema to Joyce and the Nationals: their vision is of a family farm-dominated agriculture sector, continuing to nurture (heterosexual) farming family values, rather than an industry like any other industry — flexible, market-driven, open to competition and consolidation — and able to adjust to foreseeable challenges like drought without having to rely on taxpayers.

The PC’s approach to agriculture is to examine how to continue the sector’s success of recent decades, which it believes can be achieved by extending price signals and removing barriers to investment. The Nationals’ approach to agriculture is to try to freeze it in amber — to stop the decline in farm numbers and arrest the decline in the agricultural workforce (and, of course, the number of Nationals voters). That’s why the white paper is as much about “families” and even “heritage” as it is about competitiveness.

And that’s why the centrepiece of the white paper is something the PC specifically targeted for criticism — concessional loans to farmers. The government lectured young people in cities to go and get a better job if they want to be able to borrow for a house will make available $250 million a year for 11 years (enabling the government to talk about a multibillion-dollar package) for loans at a subsidised rate to drought-affected farmers. That’s in addition to the $280 million in concessional loans handed out last year.

As the PC’s submission explains, concessional loans offering lower rates than commercial finance merely encourage recipients to take on uncommercial levels of debt. Cheap loans “impede efficient risk management and structural adjustment” — that is, they prop up unviable farmers who would have otherwise sold out to larger, better-resourced and more efficient producers.

That logic of that is complicated by Joyce’s xenophobic hostility to foreign and particularly Asian investment in agriculture. The PC discusses at length the benefits of foreign investment in agriculture and how it can “enhance export supply chains, promote innovation, provide capital and increase competition in domestic markets”. The white paper, however, is deeply ambivalent about foreign investment. “The Government welcomes foreign investment in agriculture where it is not contrary to Australia’s national interest,” it says, half-heartedly. The government has “refined the settings for foreign investment,” it notes — including significantly increasing the red tape for foreign investors — and is “taking steps to ensure the community maintains its confidence in Australia’s foreign investment review system”.

For Joyce and the Nationals, why bother with foreign investment when taxpayers can offer cheap loans to farmers?

The other big price tag in the package is $500 million to, pace Bert Kelly, feel a dam coming on, which includes $200 million for dams in northern Australia. The rationale in the paper for this spending is “to give Australia greater certainty around future water security”. In the PC’s view, that can be helped by removing remaining restrictions on water trading. It is not traditionally keen on spending more money on water infrastructure, especially in places with lower productivity. “Subsidised investment in water infrastructure in a less productive irrigation region may discourage farmers in that area from selling their water into a region that is more productive (and operates without any subsidy),” the PC warns in its submission. “The net effect of the subsidy could be to lower agricultural productivity across the two regions.”

Like northern Australia, for example.

And needless to say, the white paper is heavy on the virtues of the government’s “free” trade agreements. However, it says they need to be “operationalised”, and funding will be made available to the sector to help it take advantage of the much-vaunted trade deals with South Korea, Japan and China (the Trans-Pacific Partnership doesn’t get a mention, which doesn’t augur well for a agricultural trade breakthrough there). The PC, of course, is highly sceptical of these sorts of preferential trade agreements. “The greatest benefits of trade liberalisation would be realised on a multilateral basis,” the PC told the taskforce. “Bilateral trade agreements might improve market access for some agricultural producers, but others inevitably miss out. Agreements almost always involve complex rules of origin offsetting access benefits and risk costly trade diversion.” Worse, as the PC explains, such bilateral agreements can actually slow down broader trade reform, as countries keep trade barriers in place as bargaining chips in future bilateral deals.

Such a conclusion would be a worry if the paper was actually about agricultural competitiveness. Luckily, it’s more about the Nationals’ bucolic fantasies about the bush than treating agriculture the same way as any other Australian industry.


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14 thoughts on “Agriculture white paper pursues Nationals fantasies, not competition

  1. klewso

    That family – walking away from the Gnats?

  2. Coaltopia

    “Like northern Australia, for example.” classic.

  3. Dennis Binto

    Are there more social outcomes than cheap food?

    I wonder what they could be.

  4. klewso

    Cousin Jethro’s go-nats.

  5. ken svay

    At least Alan Jones will be happy. Hes always banging about about the bush dying and iconic towns like Longreach and Winton disappearing because of the drought. And he is pro dam and anti windfarm of course.
    I wonder where they will site the dam that will water inland Queensland?

  6. BruceHassan

    The whole thing is weird – an approach to water that ignores aquifers, fracking and open-cut coal mines, for example, or takes until page 190 to mention, in passing, climate change. But strangest of all the insistence that farmers and farm families, and indeed country people generally, are all nice heterosexual types. I grew up in the country, and coming to terms with my sexuality in a late 1970s country town involved a lot of teenage angst – but no shortage of sex. Every shire has its gay (or is that decadent?) ‘scene’, you just need to know how to find it. There is also no shortage of same-sex couples running farms, or being actively involved in the social life of their shire. Not only is this paper fantastical, its also blinded by its own ideological framework.

  7. klewso

    Is it better than Sorbent – or Howard’s “Ministerial Code of Conduct” bog-roll?

  8. klewso

    …. Murdoch’s PCPs?

  9. AR

    The meme of Develop the North is very much the Nat’s Grassy Knoll.

  10. old greybeard

    Pity noone here knows about being a farmer, or irrigation. Bernard, water trading as outlined by the PC is bullshit in many contexts. You might say that you should sell water from the Macquarie to the Murray, or the Namoi. Our water regions just don’t work that way. There are still many many gains to be made by improving water management. Why on earth we move water in channels or allow flood irrigation is a mystery. Dams also waste a lot of water and once away from mountain areas they are hard to site rationally. It is like the often raised venture to dam the Clarence and divert it inland. Has anyone seen how tiny the river is upstream of Grafton?
    The policies favouring large agribusiness have not served the nation as a whole,but agriculture in Australia is hard. It is dry and the soil with a few exceptions is poor and they always overlook salinity.

  11. Reg Olives

    Quite a bunch of bollocks really for the LNP to be overtly ‘coding’ that agriculture is all about supporting families, which you note, means only a certain type of family. The presser Abbott and Joyce did in a field somewhere when they launched this was quite explicit that they mean mums and dads.

    But there is another ideological barrow they are pushing here as well, and it is the directing of the term ‘environment’ to a very catholic definition (well, uncatholic these days if that Pope chap is to be believed) which translates into compromising the natural environment. You don’t need to dig deep into the White Paper to work this out.

    But let’s look at this in even broader terms. The rural family thing is a feel-good notion. It’s a bit like the untouchable ANZAC identity thing. But the reality is starkly different when we look at the concentration of agricultural production into few hands, not all of them families, but multinational agricultural enterprises and sovereign wealth funded businesses (just reflect for a tick on that whole opening up the North vision). Bulldust you might say, but the smokescreen puffed out by the clever dicks in the LNP will keep the city voters feeling good and not asking questions.

  12. Black Spot

    That’s Crikey for you. Climate change without cause contruction, same s*x marriages, feminist agendas and that kill the farmer for cheap food mentality.

    It could be the author of this article and his cheer leading comments gallery is a few roos short in the top paddock.

  13. Sam Collins

    Interesting comment above.

    I remember a time when Mr Keane once supported a view that Corporatocracy was a dirty word. But when it’s agin the farmer it’s ok? Joseph Stalin hated the farmers too, or is that just a coincidence?

  14. Liamj

    Aren’t the concessional loans a con? Believe they’ve had <20% takeup, i.e. most of the money promised hasn't been spent because farmers that need the money don't qualify and those that qualify don't need it, or so i heard on Country Hour a few weeks ago. Deja vu of John Howards promises of 100s of mills for Natural Heritage Trust 1 & 2 that never arrived either. The Libs know how to sell a cow many times over, the funny part is watching Nats voters keep buying it.


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