Ma and Pa Kettle farms no longer viable
IN an earlier life, when I was doing an economics elective, a tutor was fond of repeating: “In the global economy every pay rise without productivity offsets costs a job here but provides one overseas”.
Not exactly Einstein stuff. At individual levels, save those put off permanently, few today give a tinker’s cuss.
And governments, blind to our deteriorating international competitiveness, know that self-interest demands that they just kick the can down the road for the next generation to confront.
All this came to mind last week when reading that land south of Mortlake and Hamilton which was valued at around $1200-1500 per hectare not much more than a decade ago was expected, according to a recent Rabobank report, to see a 71 per cent increase in asking price between the 2021-22 years, sometimes rising to a mouth-watering $16,000 per hectare.
Again, this increase in cost is only viable in the long term if buyers can massively increase property productivity.
There’s not only the sky-high capital cost to consider but also rapidly-rising interest rates, higher farm inputs bills and periodic market downturns to factor in.
No wonder smaller businesses, especially in the agricultural sector, are increasingly being wiped out by the big corporates.
SOME years ago Australian Workers Union national secretary, Paul Howes, copped it from people on the land when he suggested that “Ma and Pa Kettle Farms” would be the ruination of Australian farming.
Offensive ridicule or not he had a point, even looking past his distaste for that part of the economy that unions struggled to control.
Unlike big corporations family farms don’t bring in union fees, and small rural producers have to keep a lid wages and conditions to levels that keep them competitive with their often subsidised peers overseas.
Unlike public service, not many magic puddings in small-time farming.
Many family farms face a troubling future unless they diversify and grow. Some still rely on owners and sometimes their children working unacceptably long hours to survive.
Very few, I suspect, can pay children who work on their property wage rates that match the conditions their siblings receive as minimum, mandatory entitlements off-farm.
It’s no surprise that the average Australian farmer is now aged 52 and has been working the property with little help since the late 1980s.
Hampered by exploding OH&S laws, new climate mandates and other regulations small farms find it hard to spread the risks of droughts, floods and periodic market fluctuations.
Increasing corporatisation, seemingly is inevitable - but that doesn’t mean we have to sell the farm to our competitors.
With massive money tied up in super funds it’s laughable to suggest that Australia doesn’t have the ability to invest in agriculture like the foreign companies who seek control of our rural output.
All that’s missing here is the fiscal incentive to do so.
THERE was a time when economists started pushing the “get big or get out” philosophy and farmers were encouraged to buy out or join a neighbour.
Today, with land prices rocketing, they struggle to compete with the big companies, especially internationals with deep pockets, sometimes supported by their governments.
And it’s not just foreigners creating difficulties this far south. Here in the Western District our land is increasingly sought by farmers from Australia’s temperate zones trying to escape marginal country that needs irrigation.
During the past couple of decades the cost of dairying country has gone up many times.
Head inland to Lake Bolac and similar areas, owners of basic grazing or cropping country valued at $1200-$1500 ha at the turn of the century now think in terms of $16,000 and $10,000 per hectare respectively – and that maybe it’s `timely to put the feet up.
Young farmers trying to get a foothold in the industry are up against it today.
Few will be able to round up the financial backing to get onto the ladder.
