RURAL AFFAIRS: by Patrick J. ByrneNews Weekly
Dairy and irrigation industries hit hard
, August 22, 2009
Victorian dairy-farmers have started the season with an "indicative" price of just 26¢ per litre, which Gippsland processor Rakesh Aggarwal says is below the cost of production.
While "free market" economics is heavily punishing rural Australia, the US Government has just announced that its Dairy Product Price Support Program will see US consumers forced to pay a higher price for dairy products, effectively subsidising its dairy farmers by an extra $US243 million.
In Australia, the disastrously low opening dairy price has seen over 1,000 farmers in northern Victoria offering to sell part or all of their permanent water allocation, the culling of dairy herds and many producers' properties going from highly productive irrigation farms to hobby farms or into scrubland.
All across the Murray-Darling Basin, farmers are now eager to sell water just to survive the next season.
Federal water policy is a major part of the problem.
The Federal Government plans to spend over $3 billion buying back water for the environment and another $6 billion on water savings projects, with the doubtful savings also going to the environment.
Nobody knows just how much water the Government will reallocate from farming to environmental flows, but a reasonable estimate is that it could take 3,500,000 megalitres, or 29 per cent of the irrigation water used in the basin, which produces 40 per cent of the nation's food.
The Australian Financial Review
(August 4, 2009) reports that the Government's huge buyback of an unknown amount of water is creating uncertainty, stymieing investment and jeopardising jobs.
The policy is disrupting family farms, corporate farms and associated regional businesses.
It's time for a major review of agricultural and water policies.Patrick J. Byrne is national vice-president of the National Civic Council.