So Friday November 8 was our 7th wedding anniversary.

How did we celebrate? Sleep in? Nice breaky or lunch in town? Romantic stroll along the beach?

No to all of them.

We sat in the Centrelink office hoping to get some extra money to prop up our extravagant lifestyle…

Costs outweigh our income for a lot of reasons. And I think its the same for most primary producers at the moment. I saw an article in the last few days – which I can no longer find – about a sheep farmer from Southern NSW. She says in that article (I paraphrase here) that we are feeding the nation for free.

That’s exactly what we are doing right now.

According to the Australian Government’s Industry, Innovation, Science, Research and Tertiary Education’s report ‘Key Facts Australian Industry 2011-12’, agriculture, forestry and fishing added $34.2 billion to our economy ($2.76 billion of that was dairy). That was 2.4% of the GDP. Mining’s contribution was $139.9 billion, 6.7% of the GDP.

So that explains why mining gets all the press, both good and bad!

But the point I’m trying to get across is this

2.4% of GDP helps feed 100% of the Australian population.

So why is it that those people who produce the cleanest greenest food in the world (my opinion) are forgotten?

According to the National Farmers Federation 2012 Farm Facts, each of the 134,000 farm businesses in Australia feed 600 people and produce 93% of the food consumed here.  Agriculture creates a total of 1.6 million jobs.

At farm level 307,000 people are employed, while only 269,300 are directly employed in mines. Is anybody else as surprised as I am about this?

I could wax lyrical about agricultural statistics all day! But as dairy is the industry I am currently heavily involved in, I found the following very interesting.

Last years ABARES report shows this;

In 1967, the national dairy herd was 3,061,000, the average production per cow was 2,298L. In 2012 the herd size has shrunk to 1,630,o00 and average production has risen to 5,816L. Genetics, feed, and a better understanding of the cow has helped Australian dairy farmers improve productivity by 258% in 45 years.

The International Farm Comparison Network, as reported by the Weekly Times, says the average cost to produce 100kg of milk (1kg of milk, 4% Butterfat, 3.3% Protein) is $US46. The same article states Australia and New Zealand produce milk for $US30-40/100kg. A quick study of that map shows the cost of production is higher in countries who are subsidized.

Why are Australian dairy farmers not being rewarded for this?

New Zealand is so far ahead of us in production and export. What could their industry leaders and Government see that ours couldn’t? The strong Australian dollar has something to do with it, but New Zealand have been working on this for a while.

The New Zealand herd size is 4,634,226, but their cows produce 4,128L each/year.

Australia produced 9.48 million litres 2011-12 about 50% is of which is exported, New Zealand a staggering 19.1 billion litres, 95% of which is exported. If their cows were as efficient as ours they would produce 26.9 billion litres.

So who is making the money?

I don’t think its the farmers.

And how do we sort this problem out?

If agriculture in general is in trouble, and it is, its my opinion that the issues need to be sorted industry by industry. What fits for dairy probably won’t work for sheep for example.

The one thing all primary producers need to do is tell the general public their story.

If the public – consumers – understand where their food comes from and how its produced, they might then become interested in why its so expensive to produce in Australia, then we can work on having a win/win situation for both buyers and sellers.

Pipe dream – maybe! But without ambition, we have nothing.

Your views on this are something I’d love to see! Both from producers and consumers alike.

And I’d also like to hear how the industry you’re involved in is doing.

After all, a problem shared is a problem halved, right.

 

3 thoughts on “

  1. Well researched piece Alison. I have long questioned whether farmers have actually benefited out of productivity gains. Increased produced only maintains the price and doesn’t get extra $$ into the farmers pocket. Successive governments have supported ag policies that have delivered cheap food to the masses. There are simply more votes in providing cheap food to the public.
    In horticulture we often receive similar returns to 20yrs ago. Producers either get out or get bigger. Current prices in ag aren’t sustainable. Ag is failing to attract the brightest and the best, who are attracted to more profitable fields. At the end of the day the current generation are having to work harder, smarter and for less. It is very difficult to get a solid footing in ag these days.
    Farmers are at the bottom of the supply chain. We are generally price takers and have limited say in what we are paid. We have no way of passing on increased costs of production. Last week we received a notice from our freight transporters. They advised us that diesel costs had gone up so their charges would reflect this. Where do i send my increased costs??? We just absorb the additional costs and solider on thinking all will be fine. There’s only so much you can squeeze, soon there will be nothing left.
    Keep up the good work, always look forward to reading your blog.

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  2. Very well written! Factual, tells it like it is (not Pollyanna-ish) but not whiney either. Wish I knew how it could be fixed. A problem common amongst people who love what they do – they always end up being price takers not makers, because they hang on whereas the purely $ driven wander off to more lucrative professions. To add insult to injury, there are people who believe farmers do what they do simply because they “can’t” do anything else. Many other small businesses struggling at present too. The framer I paid last week charged me the same price as about 7 years ago. I know his costs would have risen hugely, as mine have. But he knows if he raises his prices, he’ll have less customers. Many small businesspeople I know are working longer and longer hours, for less income, also.

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  3. I’m a big believer in value adding in the dairy industry and have seen some great successes via govt grants. Is this an option? Do away with the middle man or woman, I say!

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