bad times on the farm?

Submitted: Saturday, Mar 23, 2013 at 11:42
ThreadID: 101251 Views:2230 Replies:10 FollowUps:21
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A recent thread talked of a hitchiking farmer on bad times, although this thread 'comment' of mine is not really an item related to the central theme of explorOz, I would say many a 4wd has been thru or past farming property , used tracks thru station property as spart of a trip or drive.

I have heard of stations bieng abandoned and farms/farmers on tough times. Aust is a country of boom and bust , drought or flood historically. as most of Aust are city dwellers, I would say we are lucky in many respects compared to a farmer. they use very good practices and techniques to try and make a living out of mainly dry areas. the situation of rising costs, buyers forcing farmgate prices down, the current high AU$, loss of local infrastructure and so on is making their lot more difficult. moral: support farmers by lobbying MP's and publicising their situation.
good example is $1 a Litre for milk recently..what dairy farmer could sustain that?
I also recognise they are not alone in the changing social structure of our country.

On my recent trip perth-sydney and ret, we rested at many small rural towns-it stood out to us how much they had decayed, all boarded up, almost abandoned in appearance. Farmers have to be a tough lot -faced with shooting animals (stock) when markets or crops fail and so on. They are asking for help to get them thru to better times.
MG.
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Reply By: Member - Warrie (NSW) - Saturday, Mar 23, 2013 at 12:00

Saturday, Mar 23, 2013 at 12:00
Hi mike. Well the retail for consumers is $1/litre but how much less per litre are dairy farmers receiving now compared to 2 years ago? For all I know they could be getting more and the big supermarkets have cut their take. Lets have some proof from someone in the dairy business.... W
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Follow Up By: Member - daz (SA) - Saturday, Mar 23, 2013 at 17:05

Saturday, Mar 23, 2013 at 17:05
Hi Warrie,
The current farm gate price in SA is about 28 cents per litre. That is well under the cost of production, & has been around this price for about 5 years. As a consequence, approximately 2/3rd of dairy production on the Fleurieu peninsular ( south of Adelaide) has ceased in the past 5 years. The majority of dairy farmers debt is increasing at a rapid rate, so as they can continue to survive they are living off borrowed monies. . It is a 7 day a week job, both morning & night as well as the farm work that needs to be done. The beef industry is in diabolicals as well at the moment. A 200 cow herd would not bring in a gross of more than $100,000 more likely $85 to $90K at present, Then deduct the costs, superphosphate, rates, taxes, insurance, renovation of pastures, fencing, interest on the mortgage, fuel, you name it. The average farmer certainly is not living the high life, & with all these animal activists & do gooders it will only get worse. One thing is for sure, I would rather buy Australian produced food than imported which we have no idea how it was grown, even if it costs more.
Just the opinion of a retired livestock agent. Daz
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Follow Up By: Member - Warrie (NSW) - Saturday, Mar 23, 2013 at 20:09

Saturday, Mar 23, 2013 at 20:09
OK so 28cpl 3 years ago when we bought 3 litres at Woolies for just under $4. The farmer got 84 cents and the middlemen and Woolies the rest. Ouch! So why can't farmers unionise into co-op - as if rhey haven't already - and say " pay us $x/ litre which is ia living wage or we tip the milk down the drain. This sort of action seems to work when other union members withhold their labour until a settlement is reached. Why have the farmers lost their power?
Point 2. Spoke to a beef farmer near Delegate in January - 175 head. Got a story about how tough it is. But up the road at the servo the goss was that he'd had a recent trip to Europe. So much for tough times. Many here are driving Oz and free camping. But that's not so bad after all is it!
Here's a link to the Australian paper with an article about the NT Lost City. Well their site is pathetically slow good luck...W
LinkLost City NT
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Follow Up By: Hilux fan - Sunday, Mar 24, 2013 at 10:03

Sunday, Mar 24, 2013 at 10:03
Most of the dairy companies started as farmer owned co-ops. The whackos in charge then decided to privatise them. Farmers got a one time payout, but then became second-class citizens as the company policy (as required by Australian law) put the interests of the shareholders above the interests of the farmer suppliers.
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Follow Up By: olcoolone - Sunday, Mar 24, 2013 at 11:51

Sunday, Mar 24, 2013 at 11:51
Warrie (NSW)......

What can I say....... some have a very good understanding of business and economics.... and other don't.

Why have farmers lost there power..... because the government has allowed a handful of large monopolising extremely big profit driven powerful companies the right to do what they want, when they want and how they want...... and the current government is to scared to stand up to them.

And a majority of tight #$% Australian would sooner spend less on lower quality products and produce then help struggling businesses.

And as for unions.......large monopolising extremely big profit driven powerful organisations!

Point 2...... yes everyone has a right to a holiday and it should not be no concern to you, being broke and having it tough are 2 different things..... yes business is doing it tough but still making money, your comments are a typical employee comment..... boss can't give me a $2 per hour pay rise but he can afford a new car!

What you don't see is the overheads business owners have to carry, farmers are no different, he has to pay for feed, stock upkeep, property maintenance, workers pay and entitlements, land taxes and fees, environmental fees, the carbon tax soon, transport costs and many more things AND make a small living to support his family.... if the price of feed goes up, transport costs increase or stock prices fall then he is in the poooohhhh...... what might of been a good year all of a sudden has turned into a bad year and the cash savings he has get used.

Farming in Australia is in dire straits at this present time and if we are not careful we will all be left scratching our heads wondering what the hell happened.

People are funny things..... they want a good life style, high pay, low cost of living...... but on the other hand they don't want to support what gives them this...... something has to give.
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Follow Up By: Hairy (NT) - Sunday, Mar 24, 2013 at 12:54

Sunday, Mar 24, 2013 at 12:54
I agree with 99.9% of your comments Olcoolone except the bit about farming being in Dire straits. I'm sure some areas are and some type's of farming are worse than others, but if you have seen the new Toyota's, Headers, tractors and beach houses etc.... around here you might think a little different.
Most Farmers aren't happy unless they are winging.....LOL

Cheers
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Follow Up By: Member - Justin O (QLD) - Sunday, Mar 24, 2013 at 14:40

Sunday, Mar 24, 2013 at 14:40
Spot on Hilux fan. That's when the rot started setting in. When companies like Parmalat started buying out smaller dairy companies. In southern qld, I am witnessing dairies are going to the wall every week. It's not just the dairy industry. Foreign multinational companies are buying up beef, lamb, cotton, coal, timber (Qld forestry thanks Anna) and so on.
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Follow Up By: Member - Des Lexic - Sunday, Mar 24, 2013 at 18:46

Sunday, Mar 24, 2013 at 18:46
Some years ago, I had a "Fruit Block" in the SA Riverland. the odds are well and truely stacked against the primary producer.
For a start, the Primary Producer pays all costs towards the cost of producing their produce which may take in excess of 12 months to produce. When the end product is then sold, the wholesale agent onsells the goods to the retailer and then takes out his margin that he decides to charge, transport and packaging costs are then deducted and the producer after taking all the risk gets whatever pittance is left.
The best thing I ever did was to get out of the industry
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Reply By: Kris and Kev - Saturday, Mar 23, 2013 at 12:22

Saturday, Mar 23, 2013 at 12:22
In think we all know the supermarkets do not take price cuts. They are a business and have just made record profits.
I think it was on Landline or state to state recently that many dairy farmers are now getting less per litre then what it costs them to produce it and that is why so many are getting out of the business. Especially in NSW at the moment. The show also warned in a few years we may have to start importing milk from overseas. How sad is that!
Coles and Woolworths said they do not apply any pressure to the farm, so it is not their fault. The middle guys who collect and process the milk said they are told by the big supermarket chains what they will pay, and therefore they have to pass that on to the farmers. So the big supermarkets are passing the buck and taking no blame. They also said the consumers are the winners. Therefore it goes to show we are all at fault.
Where we live in Qld there use to be dairy farms all around us, now there is only one left in the district and they process their own milk.
So the lesson here is that all of the people who line up for so called cheap fuel, buy cheap milk, bread etc, will pay for it down the track. The big question is what can we do about it? Do not expect our political leaders to do much.
Kevin
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Follow Up By: pop2jocem - Saturday, Mar 23, 2013 at 13:16

Saturday, Mar 23, 2013 at 13:16
Yep, agree completely Kevin. We are our own worst enemies. Every time we buy some product manufactured outside Australia because it is cheaper than the same product made locally we drive another nail into Australia's economic coffin. Imagine what sort of a third world country our descendants will inherit when the mining boom is over, and it will end sooner or later.

Cheers
Pop
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Follow Up By: Patrol22 - Saturday, Mar 23, 2013 at 21:37

Saturday, Mar 23, 2013 at 21:37
My wife and I always try and buy Australian grown/made and in doing so we make decisions based on what the label tells us.....and rely on that information. But just yesterday I was looking for a remote switch for my Cannon digital SLR camera......now none of these things are made in Aus but I thought that I'd support and Aus business and buy locally. Well here is the rub! I went to a local big name electronics dealer.....this switch was quoted at $69.99. Went on line and could buy it from a supplier in Melbourne for $30 plus $19.50 P&H. I ended up getting it from Hong Kong for $3.89 postage included. Is it any wonder that people are shopping off shore or buying foreign made stuff when Australian business charge such a premium.

That said, I continue to only buy Australian fresh produce and particularly seafood.....and will continue to do so while I can afford it (now a self funded retiree).

What is the way ahead for Australian farmers? That's not something that I'm even remotely qualified to outline but I will do my part to try and keep our local guys afloat.........supermarket heavies notwithstanding.
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Reply By: allein m - Saturday, Mar 23, 2013 at 12:25

Saturday, Mar 23, 2013 at 12:25
Hi in today's I live in Broken Hill and in to days local newspaper a local shop that is just across the road from Broken Hill base hospital has just closed its doors as they cannot sell it as a viable business they said costs such as electric and the local garages and the big two coles and woolie s have made it a unviable business I have been here for 7 years now so far we have lost 4 or 5 petrol stations and a number of pubs and the main street is still going but there are a number of empty shops. Tourist numbers are down .I do really feel for the people who who there own business they deserve better. when we go to mildura and Adelaide by road we see so many shops closed scarry when will it stop?
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Reply By: Neil & Pauline - Saturday, Mar 23, 2013 at 13:19

Saturday, Mar 23, 2013 at 13:19
I got out of farming while I still had some equity. Until such time as the importer of produce into Australia does not have to adhere to the same health standards as the Aussie farmer our agriculture will continue to decline and move to overseas ownership. Currently us, as tax payers, pay for the inspection of imported produce and the farmer pays for Australian grown. I can never see why a government cannot take this on unless they are preferring not to take on the super markets.
I was manufacturing garments totally in Australia (from sheep to retailer) and sell viably into SE Asia. That was until the government imposed an risk levy which accounted for 75% of the processors cost. There was no levy on the garment manufacturers so the Gov. claimed innocence but because 2 processing stages pulled out of Australia the whole industry fell over.
I could go on but I am too busy enjoying travelling Australia now and helping out where I can

Neil.
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Follow Up By: olcoolone - Sunday, Mar 24, 2013 at 11:58

Sunday, Mar 24, 2013 at 11:58
It's unbelievable the fees, leyys and taxes that the general public don't see or understand..... that us business owners have to carry and in most cases with the carbon tax hide from the public.

Not forgetting the other costs of running a business.

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Follow Up By: Member - Michael J (SA) - Sunday, Mar 24, 2013 at 18:45

Sunday, Mar 24, 2013 at 18:45
G'day Richard,

That is so bluddy true...and the trouble is you just cannot explain it to the general public....oh to be away from it all!!!

rgds
MJ
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Reply By: Member - Wamuranman - Saturday, Mar 23, 2013 at 13:36

Saturday, Mar 23, 2013 at 13:36
One of the features of a modern and progressive economy is the increasing size of the business unit. In a highly competitive economic system economies of scale reduce prices for the end consumer. In its purest form “Laissez-faire” is an economic environment in which transactions between private parties are free from tariffs, Government subsidies and enforced monopolies with only adequate government regulations sufficient to protect property rights against theft and aggression. Such a system will encourage capital to be invested where returns are the greatest thus maximising profits to investors leading to raising living standards.
In Australia we have in essence a capitalist economy where owners of capital are free to invest where they will receive the highest return. Market failure (e.g. closure of a small shop or garage) is not a justifiable reason for Government intervention.
But Government intervention is justifiable in some areas : Misuse of market power - some firms will develop economic power that will allow them to over ride the free market and manipulate the price. Examples include monopolies, oligopolies and duopolies; Public goods and services - some things will not be produced by the free market, even though they are essential e.g. Police, defence, border protection. Health and education etc; Externalities - some forms of production lead to side effects which are not controlled by the market. They can be either positive or negative e.g pollution.
The Australian government has an obligation to guarantee economic stability and allocation and distribution efficiences of goods and services to the benefit of all Australians regardless of their economic status.
Whenever Government intervention occurs in a free market it will always lead to a misallocation of scarce resources. As a highly developed economy we can justify and accept some intervention so that all Australians have a minimum and acceptable living standard. While the capitalism is not a perfect system it has worked to raise the standard of living of all Australians….just look outside your front door and observe how many motor vehicles, caravans, boats exits in your street compared with your grandparents era.
If as a community we don’t want our farms to close, corner stores to shut, independent services stations to go out of business etc etc….that’s fine. That can be achieved by greater Government intervention in the free market. But as a consequence we must also be prepared to accept a lower standard of living due to the misallocation of scarce resources that that would entail.

Cheers



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Follow Up By: Member - Kevin S (QLD) - Saturday, Mar 23, 2013 at 13:56

Saturday, Mar 23, 2013 at 13:56
Well put, Wamuranman.And if we get more of that kind of government intervention there will be a lot less Australians exploring oz.
Kevin
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Follow Up By: Kris and Kev - Saturday, Mar 23, 2013 at 15:12

Saturday, Mar 23, 2013 at 15:12
Very good points and we definitely have a higher standard of living.
But where does it stop? Without government intervention or change of policies what will this country be manufacturing in 50 years time? Or 10 years time for that matter. Where will people be employed? Without resources to sell how will this country earn a living? I don’t think we will have enough population to be self supporting and with more and more of our minerals, land and produce being owned by overseas investors, I am not sure what say we will have. Progressive governments have privatised (sold off) our businesses and we have lost some of the safeguards. Remember when we had our own bank. In Qld we even had our own insurance company. And it goes on. Kevin
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Follow Up By: Member - Wamuranman - Saturday, Mar 23, 2013 at 18:55

Saturday, Mar 23, 2013 at 18:55
You both are correct. (Kevin x 2).
To maximise its standard of living a country should produce goods and services where it has a competitive advantage and import goods and services where it doesn’t.
The problem is there is not a level playing field across all countries, especially in aspects of the labour force, Government red tape and costs etc. Australia will never be able to compete with most manufacturing in Countries with ultra cheap labour costs…Asia, China, India etc. This is why manufacturing is declining in Australia.
Australia does have a competitive advantage in the production of many agricultural commodities due to our economies of scale in broad acre faming, suitable arable land, irrigation, climate etc. Thus we will always be a net exporter of food crops and meat.
Australia also has massive mineral wealth which gives us a competitive advantage in large volume exports of coal and iron-ore particularly.
But even this is changing. India, China and Russia are cashed up fast growing economies. Many small Australian mining companies are being brought out by overseas companies. India has made it clear it wants to own its own coal and iron ore companies in Australia and Africa so it can control its own destiny. But small Australian companies lack the capital to bring many of their mineral deposits to export.
Unless there is a change in Government policy the FIRB will continue to allow the buy-out of Australian farms, mineral deposits and mining companies. With this buyout the mineral profits will go overseas, except for royalties


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Reply By: jacent - Saturday, Mar 23, 2013 at 13:42

Saturday, Mar 23, 2013 at 13:42
I know it probably doesnt make much of a difference but when my partner and I go shopping we always check the back of the labels and will choose the australian made or products made from australian ingredients, regardless if it is more expensive or not. Worst case if there is no aussie option we buy a product that is made from part aussie ingredients at least. I always buy local produce from the farm gate as much as i can too!
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Reply By: Hairy (NT) - Saturday, Mar 23, 2013 at 14:21

Saturday, Mar 23, 2013 at 14:21
Gday,
At the rate farms are being sold to Asian consortiums you will need Yen to buy milk soon, not $.
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Follow Up By: allein m - Saturday, Mar 23, 2013 at 15:15

Saturday, Mar 23, 2013 at 15:15
the Chinese now own a controlling share of the main mine here in Broken Hill and to me thats a shame it is the birth place of an Australian icon of a company name BHP
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Follow Up By: Hairy (NT) - Saturday, Mar 23, 2013 at 15:34

Saturday, Mar 23, 2013 at 15:34
Yep....the polititians are selling us out just to line their own pockets.
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Reply By: Member - Oldbaz. NSW. - Saturday, Mar 23, 2013 at 15:14

Saturday, Mar 23, 2013 at 15:14
While I concur with most of whats been said, as a farmer all my life the equation of
equity is the biggest issue. Input costs continue to rise, some at huge rates, eg fertiliser & chemicals, but returns continue to decline in real terms. Farms in my area
are now being sold, as the family succession is no longer viable...to the son, who is
already working off farm..& to the father, who wasnt able to build Super reserves, &
now has to wait 5 years before the asset is removed from pension liability after
selling it. Those in debt are paying close to 10% & returns rarely exceed that so
the equity imbalance continues to erode the farmers assets. Economies of Scale are
playing a part, with some local farms going to larger landholders.
No economic adviser is going to suggest a cashed up city chap buy a farm..better
return from real estate,shares, or even interest.
I do not agree with the anti foreign ownership doomsdayers. These people have $$
to invest, still need to buy inputs, source labour, & sell their product according to
Australian laws & pay their taxes.
Australian farmers have always been under pressure, it is a risky business, & under
current conditions only the efficient will survive.
By all means buy from the farm gate if you can, but in reality most of our production
does not pass through such simple market mechanisms.
Farmers dont want your sympathy or handouts, but will welcome your understanding.
cheers....oldbaz.
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Follow Up By: Lyn W3 - Saturday, Mar 23, 2013 at 15:49

Saturday, Mar 23, 2013 at 15:49
Well said Oldbaz,

I do however disagree with you partly regarding foreign ownership, if the new trend of some to the overseas investment being infact foreign government investment, some of these companies are importing some farming inputs and some some labor input through 457 Visas and than directly exporting farm commodities without adding anything to the Australian economy.

Having been involved in Import/Export for several years the cost of doing business in Oz with all the government regulations is excessive, for instance it costs around $500 for AQIS to issue a Phyto in Australia while in other countries the cost is around $50.00. To have a 40ft container fumigated in Brisbane is around $1,380.00 same size container in Long Beach USA it is $460.00. As well AQIS has inspectors all over the world inspecting food to come to Australia yet it is so expensive to have it inspected for export.

But I think the final straw was the Live Cattle Export ban which must rank with the most stupid and unnessesary things a government has ever done and is threatening the livelihood of thousands of producers.



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Reply By: Echucan Bob - Sunday, Mar 24, 2013 at 10:47

Sunday, Mar 24, 2013 at 10:47
Background Briefing this morning on Radio National addressed the question that Coles Woolworths and, to a lesser extent Aldi, are having on the market.

Whilst I generally agree that government intervention is undesirable, and that a free market provides prosperity etc, we are at the mercy of a duopoly (nearly 80% of the food market). The power of the duopoly is not far behind that of government. In this matter, I would like to be able to take some collective action to rein in the power of the duopoly. As a representative of consumers and suppliers, the government is the obvious player to fulfill that role.

Asking battling consumers to take the initiative by boycotting Coles/Ww, or their plain label brands won't happen. However, when the free market has disappeared (only plain label products from China on the shelves of the only two supermarkets) it will be the consumer who suffers. Cheap fuel and 1$ a litre milk will be a distant memory.

If you listen to Background Briefing you will hear how the current "free" market is operating.

Meanwhile I will continue to consume Jonesies Milk, Rod's Meats, go to the local green grocer and buy fuel from unaffiliated servos. However, my cats like the plain label tuna from Coles (its cheaper than their cat food).

Bob
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Follow Up By: Member - Warrie (NSW) - Sunday, Mar 24, 2013 at 17:11

Sunday, Mar 24, 2013 at 17:11
Thanks for lightening things up a bit Bob re the cat food. Too much economics in this post - it really is the dismal science. I think I'll go and have a nice cold beer.... W
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Follow Up By: Member - Kevin S (QLD) - Sunday, Mar 24, 2013 at 20:37

Sunday, Mar 24, 2013 at 20:37
People have been predicting the end of competition in the grocery industry for as long as I can remember. The prediction is like Tomorrow and Peak Oil. It never comes.

And good on you Warrie. That will help the economy as well.

Kevin
Accountant
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Reply By: Wilko (Parkes NSW) - Sunday, Mar 24, 2013 at 19:30

Sunday, Mar 24, 2013 at 19:30
Hear hear Mike,

We all should abandon the Coles/Woolies/ Aldi's of the world as a sign that we support the farmers in this country. They should be ashamed of themselves promoting themselves as cutting prices at the expense of our farmers.

Cheers Wilko
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Follow Up By: Member - Kevin S (QLD) - Sunday, Mar 24, 2013 at 20:42

Sunday, Mar 24, 2013 at 20:42
I really do not understand why so many people want to trash the successful Australian companies that under pin the value of their superannuation.
Kevin
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Follow Up By: Wilko (Parkes NSW) - Sunday, Mar 24, 2013 at 22:16

Sunday, Mar 24, 2013 at 22:16
I guess I'd rather a strong country community then get a little more in super. I live in the country and see 1st hand want these morons do to our farmers.


Cheers Wilko
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