WET?,....Is it ever, just spent a few days down here, Port Fairy, Portland, Hamilton, Western Vic etc,....water EVERYWHERE down here, on the roads, in the paddocks,...everywhere,...Oh to get this water to the Mallee.Quote:
Originally Posted by Mick_Marsh
Pickles.
This in the SMH today - thoughts?
Drought: Our government'''s concern is not fair dinkum
Our concern about the drought isn't fair dinkum
Ross Gittins
By Ross Gittins
22 August 2018 — 12:05am
It’s taken him too long, but public concern and the looming election has finally obliged Malcolm Turnbull to do the right thing by our farmers struggling with severe drought.
In Forbes on Sunday, Turnbull announced a further $250 million in assistance to farmers and communities, including initial grants of $1 million each to 60 drought-affected councils in NSW, Queensland and Victoria, bringing Canberra’s direct handouts to $826 million.
Add a further $1 billion in concessional loans and the total outlay comes to $1.8 billion.
Well, about time.
Is that what you think? I don’t.
I think most of it will be a waste of taxpayers’ money. You’ve heard of being cruel to be kind, but the way we carry on every time there’s a drought is being kind to be cruel. Our sympathy, donations and taxpayer assistance just prolong the agony of farmers unable or unwilling to face the harsh reality of farming in a country with one of the most variable climates in the world.
We may not be able to predict their timing or their length, but we can be certain that, before too long, this drought will be followed by another. And the scientists tell us climate change will make it worse.
And yet we keep pretending no one could have predicted or prepared for the next drought. Nonsense.
Our attitude to drought is all soft heart and soft head. I have two objections. The first is the way our collective concern about drought and its consequences is always media-driven.
When I visited the country in mid-May, my host complained that no one in the city seemed to know or care about the drought that was ravaging the countryside.
But when, a few months later, the first media outlet got the message, it started the usual flood of heart-rending drought stories.
The media love drought stories because they know much they stir their customers’ emotions. Most people like having the media give their heart-strings a regular workout. I don’t.
And the trouble is, our concern about the drought – or the tsunami or earthquake or bushfire – lasts only as long as it takes the media’s attention to shift to some newer source of concern.
It’s already happening. Turnbull’s big announcement in Forbes got little media coverage because the threat to his leadership was far more exciting.
My more substantial objection to the recurring carry-on about drought is that it makes the problem worse rather than better. We give the bush a fish to feed it for a day when we should be helping it learn better fishing techniques.
In their efforts to tug our emotions, the media invariably leave us with an exaggerated impression of the severity of the drought and the proportion of farmers who are suffering badly. They show us the very worst farms and the worst-off farmers.
To be blunt, they show us the bad managers, not the good ones. I can’t remember ever seeing a story where someone whose farm was in much better shape than his neighbours’ was asked how he did it.
The exception that proves the rule? Don’t be so sure. On average over the six years to 2007-08 – the Millennium drought – nearly 70 per cent of Australia’s broadacre and dairy farms in drought-declared areas managed without government assistance.
Many, maybe most, farmers prepare for drought. Some don’t. They’re the ones the media want us to feel sorry for. The ones who’ve overstocked their now badly degraded properties hoping it will rain before long or, failing that, the government and guilt-ridden city-slickers will give them a handout.
The trouble with our emergency assistance approach to drought is that it encourages farmers not to bother preparing for the inevitable. It encourages farmers whose farms are too small, or who lack the skills or spare capital to survive, to keep struggling on when they should give up.
And it does all that to the chagrin of the wise and careful farmers who’ve made expensive preparation for the next drought with little help from other taxpayers.
Australians have been leaving the farm and moving to the city for more than a century. They’ve done so because continuous advances in labour-saving technology have made small farms uneconomic and decimated the demand for rural labour. All while the nation’s agricultural production keeps growing.
This is my own family’s story. I was raised mainly in cities, but my father grew up on a dairy farm near Toowoomba and my mother on a cane farm in North Queensland.
Meaning that, were it not for my brush with economics, I too would share the city-slickers’ sense of guilt at having deserted the true Australian’s post on the land for a cushy life in the city. Would $50 be enough, do you think?
We are perpetrators of what Americans have dubbed the “hydro-illogical cycle”. As Dr Jacki Schirmer and others at the University of Canberra describe it, this occurs when “a severe drought triggers short-term concern and assistance, followed by a return to apathy and complacency once the rains return.
“When drought drops off the public and media radar, communities are often left with little or no support to invest in preparing for the next inevitable drought.”
Every government report on drought concludes the best response is for farmers to improve their self-reliance, preparedness and climate-change management. We could help them with their preparations, but we get a bigger emotional kick from giving them handouts when droughts are at their worst.
Ross Gittins is the Herald’s economics editor.
So what’s the moral of his story Bob?Quote:
Originally Posted by bob10
\\Quote:
Originally Posted by stealth
It's a yarn, not a bible reading.
I remember an exchange of letters to the editor in Qld. Country Life early 1990's concerning payments of drought relief or whatever name it had then to non-viable farms, hobby and lifestyle farms. Two sides to the story as usual. One was adamant that all farmers should get paid for the asking and others reckoned only farms that could survive as a stand alone agricultural enterprise without outside input like having wages and salary jobs off farm should get paid.
This was then of interest to me as I was one of a DSS team sent to Toowoomba to assess hundreds of claims that had overwhelmed the local office. If not experienced in complex assessments then training was given. We found many, many, farmers had been to the tax accountants and lawyers and had a complex weave of trusts and companies that had to be unravelled to determine whether they had readily available assets that had not been accessed. In all too many cases the base farming enterprise had never made a profit or not for years. Income being siphoned off to the company that owned the plant and hired it to the farm, the company that owned the stud livestock and hired it and so on. Income tax? What's that?
I remember the gist of one of the letters from a rural accountant. He said that there is nothing magical, mystical, or mysterious about a farm. It is a business like a pub, hardware store, used car yard and needs to be run as such. It has to repay its borrowings in a timely manner, get its accounts receivable collected, and meet their accounts payable in a timely manner. It has to pay fair award wages to all who labour in the enterprise for all hours worked, and pay a return on the capital invested in the business. If this can not be consistently done it is time to call in the receivers, or sell and get out.
Couple of problems with that. Social Security law provides a definition for "suitable employment" and job seekers can not be directed to unsuitable employment. Suitable employment is within 1 1/2 hours travel, pays a fair award wage and award conditions, is conducted at reasonable hours, can be performed by the job seeker without injuring themselves or aggravating any illness or disability they may suffer.Quote:
Originally Posted by bob10
Second problem. This smacks of civil conscription. The Qld. government thought of this in the 1950's when faced with a serious shortfall of harvest labour in the sugar industry. They received legal advice that this idea was almost certainly unconstitutional and political advice that this would be so unpopular the government would not survive an election. The sugar industry had doubled since the war's end and would double again by 1960. Cane cutting was hot, heavy, dirty work in the North Qld. climate and few stuck to it. The decision was taken to finance development of mechanical harvesting as a matter of extreme urgency and necessity.
The same applies to any small business - and there are an enormous number of small businesses that survive only by not paying wages to family members, or not paying a return on capital (or both). And remember that more than half of small businesses fail in the first year. As a community we benefit significantly from these businesses operating effectively as a loss, not to mention the bargains at the liquidator's sale! All from someone's savings.Quote:
Originally Posted by Bigbjorn
Perhaps the significant difference with farms is that they are directly impacted by drought - but then so are all the businesses that rely significantly on the operation of farms, from the rural suppliers to less obviously the hair salons, eateries, supermarkets, and even car sales, fuel sales, white goods etc etc.
I'm a farmer....Quote:
Originally Posted by carjunkieanon
Whilst I agree with essentially everything here, I also Believe that farming, as a business is one of the must unpredictable enterprises around, we definitely need the best operators and managers that are available to manage this. Most businesses running at a loss will eventually decide to fold,a farmer however, by and large will not.
It's probably too big a subject as too why to discuss here.
One of the biggest issues I see is the inability for any of us to see the future, how do you know when to bail? when are the crops a right off? how long do you feed sheep before you decide you need to sell?
One thing that would be detrimental to the general public would be all the farms folding and being sold to corporations and overseas interests. If that happens what we would see is the big game changer...
Farmers would become entirely bottom line reliant, like for instance a mine. As soon a profits were not at a certain level, shut the show, then what?
Well then farmers would become price makers instead of price takers, right throughout history the economy of the world has been based around the cost of food, the one thing necessary for life, this is NOT currently the case in this country, food plays a very minor role in on the overall expense of living, housing insurance and cars are now the big things,
This would be a paradigm shift as far as I'm concerned, maybe not one we are ready to deal with.
My point? I think we need the cream of the crop running the show, farmers that are inefficient and unable to plan will disappear through natural attrition, in fact a lot already have, but I do believe farmers need some sort of safety net, or we will all starve to death...
JD, I feel the point he was making was that if an enterprise could not pay wages and a return on capital then it was not a business but an expensive hobby. Sell for what the market says is the price, invest any capital return, and get a job.Quote:
Originally Posted by JDNSW
My family ran a variety of businesses in Winton for decades. The patriarch of the extended clan had a ruthless approach to credit. He learned early in his business career not to endlessly support customers with long term credit. He required accounts to be paid thirty days or the client went on COD. He used to say we are not here to work for nothing.
From one point of view, this is entirely correct. But as I pointed out, there are a large proportion of businesses, especially startups, that are "an expensive hobby" often for years at a time. Some that come to mind, among well known ones, are Microsoft, Apple, Paypal, nearly all mining and oil companies (for an extreme example, Oil Search Ltd started an actual cash flow about five years ago, after starting operations in 1929). Many, if not all, car manufacturers have had periods, some very long, where they have not made a return on capital, and have relied on government bailouts.Quote:
Originally Posted by Bigbjorn
These businesses are kept going in the conviction that "it is going to get better" (e.g., the drought will end). Realistically, in many cases it will not - but if we try and stop this optimism, there are a lot of successful businesses that will never happen.
