Date: Thu, 14 Sep 1995 07:55:46 -0400
Sender: Progressive News & Views List <PNEWS-L@SJUVM.stjohns.edu>
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Subject: Farewell to family farm
/* Written by peg:greenleft in igc:greenleft.news */
Farewell to the family farm
By Roger Raven, Green Left News
14 September 1995
Farmers were among the prime targets of the propaganda of economic
rationalism. Many were persuaded of the view that tariffs imposed onerous
burdens on the agricultural sector, and that the adoption of economic
rationalism (and deregulation and cost-cutting) by governments would end
that unfair treatment.
However, farmers have been amongst those most severely affected by the
economic rationalist agenda. The depopulation of rural regions is
aggravating our already excessive urbanisation; it is in our interests to
have a large and stable rural population, and to ensure that they have
similar access to social services.
One convenient measure of the economic aspect of the crisis in agriculture
is the portion of farm income that is consumed by costs. Thirty years ago,
costs took 50-60% of gross income; they now take 80-85%.
Most Australian farms are family farms, owned and operated by husband and
wife in partnership. Though this is a very stable structure, the family
farmer can, in the end, rely only on his or her own resources. The rapid
pace of economic change, and the benefits of economies of scale, inevitably
give large corporate organisations a competitive edge, particularly in the
very profitable sectors.
Corporate farms occur mainly in the meat industry. In the beef industry,
most of the major feedlots in Queensland and NSW are fully or partly owned
by Japanese trading companies. In the case of the poultry industry, in 1986
about 25% of the market was supplied from a few company-owned poultry farms;
the balance was supplied by a thousand growers under contract to the four
integrated agribusiness companies.
As the Catholic Social Justice Commission pointed out in late 1994, if
nothing was done to help the rural sector, family farmers could supply only
what was needed to make up any shortfall in regular suppliers' deliveries.
It was only this year that the first female farmer addressed an ABARE
(Australian Bureau of Agricultural and Resource Economics) Outlook
conference. Her view was that women on farms are often treated as
second-class citizens - a situation worsened by their isolation and poverty,
despite often having good qualifications. They were also much more concerned
with social welfare issues and the long-term future of family farms than
male farmers. Such issues are generally ignored by rural politicians.
A recent ABARE survey showed that the largest 33% of broad-acre farms
produce some 70% of total agricultural output. Their average cash income was
$77,000 in 1992-3. The remaining 67% of farms surveyed were found to be more
likely to fail than to remain viable.
An average farm has to have a cash income of $40-80,000 a year to remain
viable. The average broad-acre (grain/sheep/cattle) farm income over the
past five years would be well below the lower end of that range. Only 2% of
farmers are reported to consider themselves to be highly profitable.
Up to 70% of the annual increase in gross national product arises from
environmental degradation. Due to Australia's infertile soils and erratic
climatic patterns, agriculture has been the main cause of the degeneration
of our soil and aquasphere ecosystems. However, although the pastoral
industry is causing severe degradation, temperate agriculture is not far
The 1991 Farmfacts Asset Survey indicated that most farm equipment is
obsolete; 40% of the tractors, 50% of the harvesters and 95% of the trucks
owned by the farmers surveyed were more than 10 years old. Farm production
is therefore being sustained by debt, land degradation and depreciation.
Politicians and economic rationalists have forced state and federal
agriculture departments and the CSIRO to be uncritical, narrow and
commercial. Consequently, there is no unbiased examination from the public
interest or farmers' point of view of the benefits of available
Profit-making organisations will almost always seek to pay the minimum
possible for farm produce. Competition likewise forces them to work to the
lowest common denominator.
There is not yet a recognition that prices and money values are nearly as
inadequate an indicator of economic ``efficiency'' as they are of social
In practice, the necessary conditions for truly competitive markets are
never achieved. Consequently, the prices we, in the real world, work with
are almost never either ``true'' or ``fair''.
Post-Soviet experience shows that administrative command is far superior to
the price mechanism as a means of allocating resources. In the case of
Yeltsin's Russia, the number of private farms peaked in late 1994 (at less
than half the expected number) and is now declining. Only 3000 of the
112,000 private farms created during 1993 actually produced a marketable
surplus. Throughout the formerly state socialist countries, collective
farmers are fighting the efforts of the new ruling classes to destroy
collective farm structures.
Any effective rural policy must address: 1. rural credit (cost and
availability); 2. research and technology; 3. advisory services and
training; 4. natural disaster relief; 5. income support; 6. obsolescence of
equipment; 7. marketing; 8. land use conflicts; 9. environmental
degradation; 10. rural social services; and 11. easing the pain of rural
Some reasons for supporting agricultural industry are: to maintain a core of
skills, necessary for a diversified economy, for an informed understanding
of overseas trends and to allow the sector to be expanded as opportunities
arise; to replace imports and earn export income, should the cost of imports
become an excessive burden, or international crises cause our isolation; to
support a large and socially stable rural population; to support
environmental sustainability and industrial diversification in both urban
and rural regions; and because family farms are a social as well as an
Without extensive administrative measures, the family farm will be
eradicated as the basic unit of agriculture by agribusinesses. Such a result
will have big social costs.
[Next: A role for cooperative farms.]
First posted on the Pegasus conference greenleft.news by
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