Wednesday, September 05, 2018

Subsidised capitalism

  Australian agriculture is worth more than A$63 billion (2016-17), with more than three-quarters of output exported.

Seventy per cent of the mainland is classed as arid or semi-arid, meaning it receives less than 500mm of rain annually. With little or no rain in recent months, the whole of NSW has been declared in drought, together with 60% of Queensland. The plight of drought-hit farmers in Australia has prompted an outpouring of sympathy across a country. The federal government has announced extra household assistance for farmers, bringing the total aid bill to A$1.8bn (£1bn; $1.3bn) - although this includes some low-interest loans.

John Daley, chief executive of the Grattan Institute, a think tank, explained, "The current conditions are not extraordinary."

Daley contends that farmers should be treated no differently from other business owners.

"The fundamental question here is: what's so special about farming? We've seen car manufacturing and other industries go to the wall in Australia on the basis of economic rationalist arguments. What we wind up doing is bailing out those farmers who are least able to cope."

John Freebairn, an economics professor at the University of Melbourne, believes farmers should decide where and how they farm. "If they think they can push the margins out a bit further, with new technology or whatever, and are able to make a go of it, that's fine," he says. "But we shouldn't be subsidising them."

The agricultural skills of Aboriginal Australians have been highlighted by indigenous historians such as Bruce Pascoe, who in his 2014 book Dark Emu detailed how, pre-colonisation, the country's first inhabitants grew crops and conserved soil, water, wildlife and fish. The land was then degraded by Europeans' hoofed livestock and intensive farming techniques, he wrote.

 Outsiders are often astonished to learn that the nation's agricultural products include water-thirsty cotton and rice. Many farmers rely on irrigation.

Peter Harris, chairman of the Productivity Commission, the federal government's main economic advisory body, said last week that decades of drought assistance totalling billions of dollars had done little to help farmers, and similar measures, if taken now, were "condemned to fail".

The challenges facing farmers are set to become more acute, with climate change bringing more frequent and severe droughts, altering rainfall patterns and making more land agriculturally marginal or unviable, say scientists.



https://www.bbc.com/news/world-australia-45179181

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