Saturday, January 17, 2015

The Liberal Democrats - Why I joined them and why I believe they represent the future party of Australian agriculture

A few days ago I had a chat with a friend, a station owner, who sent me  the web address of a new rural party. I couldn't find any of their policies online so I asked him what they were about. "They support country people and rural industries" came the reply. "What does that mean?" I asked.

What does a party who has the best interests of rural Australia at heart look like? The funny thing is not even many rural people agree on this themselves. Go to a state conference for an organization like the VFF and you will often see heated debates unfold and votes taken on pivotal policy passed or struck down by very narrow margins. Farmers are leaders, and having three of them in the same room often means you have four different opinions on any one issue. Those opinions are not easily swayed either.

In recent years we have seen many political parties and various agitators spring forth from social media and rural areas. Katters Australia Party, The Shooters Party, Dr David Pascoe and the Australian Beef Association are prominent but by no means alone in this space. Many advocate for the government to shield farmers in some way from foreign competition, bank forclosure, foreign purchase or free market price pressures in order to preserve our base of farming families.

Dig a little deeper into these 'solutions' and you will often find terrible unintended consequences are waiting down this path.

Stopping food imports often causes our trading partners to retaliate, stopping or placing heavy tariffs on our exports of other commodities. They can react the same way when we subsidize produce we send to their market as well. Subsidies and trade protection, no matter how well intentioned are a net loss for Australian consumers who either have to pay higher supermarket prices or higher taxes to fund farm subsidies. Minor parties can advocate these policies all they want but I sincerely doubt the major parties will vote for a policy that can be so easily demonstrated to push up the cost of living for everyday people.

On a side note, if you think the environmentalists and animal rights activists have too much say now. Imagine what concessions they would want if their tax dollars were propping up farmers across the country with a Labor/Greens alliance holding the balance of power in both houses. Subsidies look like free money until you have to surrender half your property to a weed and feral infested "wildlife corridor".

Bank forclosure would have to rank as the worst way a family could lose a farm, to have your home and business ripped away would would cause unimaginable pain. For those of us who have worked the land or own a property it is easy to get lost in the emotions and to identify with our fellow farmers. We easily forget that farming is a business. I do not know what really has been happening out in Western Queensland, I'm not an accountant nor have I seen the books of those families that have been forced from their homes. I do know this. Many properties are valued at twenty to thirty multiples of the income they can produce on a decent year. Government moves to limit forclosures or stop banks acting will increase risks for those banks. It is likely banks could react by increasing interest rates on rural loans or further de-valuations of rural properties to compensate for the increased risk, further penalizing people who mange their debt responsibly.

The recent foreign purchases of Australian land really should be cheered rather than dreaded by family farmers. Farms sold to foreign buyers are currently keeping prices stable where they are. The removal of these buyers from the market would possibly halve land prices overnight and trigger a wave of forclosures.

Agriculture does not need more government interference. As I have demonstrated above, however popular or well intended there is always a dark side, unintended consequence or string attached to that "help" or free money.

That is why The Liberal Democrats are the future party of Australian Agriculture.

While they are not offering Agriculture any money or economic protection they are the only party fighting to give farmers back the right to run their businesses as they see fit, their property rights and end the specter of government interference.

The rule of standard commodities comes into play here. Once your beef/cotton/lamb/wool/wheat or any other produce becomes standardized and completely interchangable with anyone else' on the global market with no unique selling point. The market will immeadiately seek to find the cheapest supply.

Rising inputs and over the top regulation are constantly squeezing our farmers. They struggle to compete in the constant race to cut costs and stay with commodity markets but over regulation prevents them from creating products with unique selling points or streamlining their operations. The recent restrictions on selling raw milk, the laborious process involved on setting up an on farm abattoir are good examples here. The Labor party were happy to approve the construction of a mine in Western Australia that hinged on 3000 foreign workers and both major parties are happy to allow 475 visa workers to fill our abattoirs but neither would ever contemplate allowing easy access to cheap overseas labor for on farm work at rates that are still far above what they earn at home but below award rates here.           

Farmers cannot improve their bottom lines without their property rights being restored. They cannot move to processing their produce and creating unique products while local councils make a point of refusing planning permission on the basis of conciencious objectors or whinging neighbors that will not be affected by improvements that are literally miles away. Nor can farmers expand with the government threatening to take their land out from under them for the purposes of mining or gas extraction. What a farmer does with their land is their business, not the governments and certainly not some inner city busybody with a weekend holiday shack, a friend on the local council and greater affinity for animals than people. Property rights have to be sacred.

Government interference has cost the beef industry dearly in the last few years. A live cattle ban launched at the beginning of the selling season, an inept administration decimating markets at the beginning of a terrible drought and the introduction of ESCAS (the exporter supply chain assurance system) retarding live exports at a time when farmers desperately needed to de-stock. For political reasons ESCAS could not be suspended or put off until the drought was finished. We are currently seeing high prices as producers try to restock but considering how cheaply they were forced to surrender their herds before one wonders how deeply they are diving into debt. A better solution would have been for those farmers to have been able to sell those cattle overseas at a better price allowing more cash to be retained and to make restocking easier. This would have triggered protests from bleeding heart animal rights activists and harrowing news specials on the ABC but consider this.

The government is only expected to interfere with live exports, property rights and how your business is run because they have the power to interfere. People have grown very used to screaming "the government should do something" at every problem. A smaller government, a less powerful government without the power or the funds to stick its nose in everyone's business will fall under far less pressure to do so. A political party whose principle doctrine is to minimize government interference, even more so.  The only party looking to give power away is The Liberal Democrats.

Protectionists will always be there but the truth is inescapable.

"A government big enough to give you everything you want is big enough to take away everything you have."    


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