Rangeland supporters call for regional restructure

Debt restructure, monetary policy top rangeland wishlist for some


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AgForce CEO Mike Guerin said the dialogue had lifted the profile of Queensland's rangelands and they planned to stay engaged with the process.

AgForce CEO Mike Guerin said the dialogue had lifted the profile of Queensland's rangelands and they planned to stay engaged with the process.

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Lindsay Godfrey highlighted a number of initiatives that could help those most invested in the rangelands' future "lose the lead in their saddlebags" - support for cluster fencing, the artesian water piping scheme, and capitalising the Regional Investment Corporation to take a bigger part in restructuring.

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Cunnamulla landholder Lindsay Godfrey highlighted a number of initiatives that could help those most invested in the rangelands' future "lose the lead in their saddlebags" as one of the few primary producers invited to address the recent rangelands policy dialogue in Brisbane.

Mr Godfrey, also the mayor of the Paroo shire, said he had put forward cluster fencing financial support, money for the artesian water piping scheme, and capitalising the Regional Investment Corporation to take a bigger part in restructuring.

He was one of the 100 economists, pastoralists, public servants, scientists, peak bodies and natural resource managers, all with vastly different world views, invited to engage in the future of Queensland's rangelands through a two-day policy dialogue instigated by the Royal Society of Queensland together with AgForce and NRM regions.

"The rangelands are not degraded; costs that have gone up higher than commodity prices are the problem," Mr Godfrey said. "Money is being sucked out of communities into debt repayments."

Related: PM's 'quick and dirty' drought policy fix

Economist Ben Rees told the forum the small farm low income problem was recognised in most advanced economies in the 1960s, bringing an agricultural policy directional change from rural reconstruction to rural adjustment in Australia in 1977.

"Under rural adjustment, policy sought to improve farm sector performance through economies of scale increasing efficiency, and rising productivity.

"The basic policy instrument of rural adjustment has been concessional interest loans to assist merging enterprise to achieve long term viable operations.

"The policy strategy of rural adjustment has been "shipping out" lame ducks whilst rewarding enterprise.

"The inevitable perverse policy outcome of population decline in rural Australia has never been recognised let alone understood by industry representatives and major political parties."

Rural adjustment

Mr Rees told the dialogue that the principle of rural adjustment had been extended to drought policy by government in 1993, which brought in the mantra of "on-farm risk management".

A national drought policy review by the Productivity Commission saw a remake of drought policy and a recommendation that only enterprises that contributed to GDP should receive assistance, Mr Rees said.

"Less worthy beings were to receive income safety net benefits.

"No peak rural body or major political party has questioned the flawed economics of the commission's recommendation.

"In calculation of GDP, imputed rent of owner-occupied housing is included. Consequently, inclusion of small farmer income both on farm and off farm contributes to calculation of GDP."

Mr Rees added that drought assistance based upon rural adjustment was always set to be exposed to circumstances that would generate severe policy structured rural dislocation.

He said these - the Reserve Bank's independent monetary policy, the Millennium Drought, the GFC and the subsequent collapse in land values, plus the current drought - had taken place between 1996 and 2013.

"The role of an independent RBA management of monetary policy appears little understood by rural political representatives," he said, going on to look at how inflated asset values had encouraged banks to lend on rising equity values rather than the capacity to replay.

"When the GFC arose, the federal government injected $15 billion dollars into the residential mortgage-backed security market, stabilising urban house prices whilst rural assets were left to the market," he said. "Hence, the rural financial dislocation that followed the GFC can be explained in unrealistic monetarist assumptions and theories."

He concluded that monetarism had a history of failure and said it was time to look for a new economic philosophy for the rangelands.

"After 40 years of 'shipping 'em out' and 'on-farm risk preparedness', agricultural policy and drought policy need to be based upon sound economics," he said.

Read more: Morrison's plan to boost rural industries

From Mr Godfrey's point of view, costs had risen higher than commodity prices.

"Our population has halved in the last 20 years, because commodity prices won't pay wages, fuel, or power bills, that have gone up much faster.

"The resulting increase in debt has meant we've lost some of our best people."

He believed that because the rangelands was such a loosely defined area, it may be difficult to find solutions that fit a wide area, adding that the political system didn't help people living in the rangelands much.

"But it was good to see Major-General Stephen Day (coordinator-general for drought) there - his results will feed into what we discussed," Mr Godfrey said. "And the only way we are going to solve things is by sitting down and talking."

Outcomes are now being compiled for insights into where people should be directing their efforts, for a call to action.

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