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Future for Producers – in our own hands!!!

Recently one of the more outspoken senators on the RRAT committee, Barry O’Sullivan, returned from a trip to the US.

To me the extraordinary part was that despite being a senator Barry financed his own fact finding mission to the US.

I was interested to read farming financial capacity developed in the 1930s in the US now has retained earnings of $45 billion. This is an example of what can be achieved.

Creating environments where politicians are willing to implement reforms that mature over generations will take courage. According to the Senator he feels there is a mood in the younger ranks of the National party to lockdown reforms and make significant difference in rural Australia.

He went on to say he had not made the whole journey to a development bank. But we need to be serious on change in how we fund rural business. Let’s hope the banking and finance sectors can make adjustments to their products. But if they don’t we will have to look at alternatives. Current thinking is to encourage primary producers to save funds when things are good may be the way to go so as to be prepared for bad times.

It seems the Senator met with a wide cross-section of meat industry stakeholders, including family farms, agri-economists, farm lobby groups, retailers and administrators of the US government Packers and Stockyards act.

To my way of thinking implementation of reforms will indeed take courage. However, I have seen no mood for change in the ranks of the National party. The simple fact is Barnaby Joyce called for a Senate enquiry and told everybody that they would have to accept the results of the findings. It seems ironic that the Minister is one of the few that doesn’t seem to embrace the Senate findings and so is refusing to adopt against the inquiries’ advice.

A development bank may have some sort of place. However when you read that the interest paid by the northern cattle industry it is more than the profit over the last 15 years. Could it be possible that no matter how helpful and understanding of producers a Rural Bank could be, drought and other factors would conspire against producers?

Surely we should be looking at ways to minimise the sort of problems that we are seeing now from occurring in the future.  Though many understand the benefits of saving during the good times the problem is that the good times have not been sufficient to be prepared for the bad times. The fact is producers have been running on empty for a very long time.

One of the things that the Senator talks about is the Stockyards Packers act which I personally rate much higher priority than a development bank. This sort of act may not be perfect for Australian conditions but is still worthwhile having a very good look at how it could work in Australia. Things like company graders are simply not tolerated in the US where they use government graders. In Australian graders are employed by the processing company which makes them subservient to the companies’ goals.

Simple solution: independent government graders employed by the government on a full cost recovery basis may be a big saving. The producers plus processors and retailers could be made to contribute to programs that are funded by producers for the benefit of others.

The simple fact is if producers got a fair deal and a fair share of the end retail dollar they could afford to look after themselves. If you start out on a property owing nothing and get prices that are below the cost of production and get struck with drought even the best operator will find themselves in debt and if you can’t make enough money to cover those debts there is only one way to go.

To me the situation is exacerbated by the structure that producers have had imposed on them by the government. A five dollar statutory levy, of which a big part goes to the marketing, does nothing for producers and goes on to help processors and retailers to make bigger profits. It is interesting to watch the processors and supermarkets refuse to contribute towards MLA’s marketing which leaves all the MLA marketing to be carried out by the producer.

The fact is processors pay very little towards the MLA upkeep and supermarkets and retailers contribute nothing. Supermarkets, retailers and processors are the biggest beneficiaries of MLA’s marketing efforts while paying nothing towards it.

Hard-working Australian farmers are fed up with backbreaking work and seeing themselves get deeper into debt, all this because of low returns.

One of the answers surely is to get a well-resourced producer organisation that has the where for all and will to defend producers’ interests. To actually achieve this it will require money, good will and progressive politicians with the foresight to turn what has become an industry dominated by retail and processing sectors. Until this happens producers can expect more of the same.

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