(AFR 29 August 2001)

Successful farmers do not need more regional aid, maintains Michael Moore

Today, the Deputy Prime Minister, John Anderson, will unveil yet another multimillion-dollar rural assistance program. Yet it is ironic that, after governments have extended greatly increased assistance to farmers and the bush generally, national and state political parties face increased threats from independents in rural electorates. Never mind the growing opportunities available to young people on the land.

Consider the lower than average rate of unemployment (6.0 per cent) in agriculture and growing reports of shortages of labour. At its Outlook 2001 forecasting conference, ABARE predicted the net value of farm incomes to increase by 29 per cent in 2001-02. This reflects much more than good seasonal prospects and comes after an increase in farm gross domestic product of almost 25 per cent in the previous six years.

NSW farmers are enjoying their best returns in more than a decade and, as NSW Farmers Association President, Mal Peters, recently pointed out, the improvements can partly be attributed to the very deregulation that some farmers complain about.

The President of the Victorian Farmers Federation, Peter Walsh, has even predicted that a doubling in that state’s food export market could produce a massive agricultural boom, creating an extra 100,000 Victorian jobs over the next ten years.

This is hardly surprising. After all, with the expansion in Asian markets and improved productivity, rural exports have increased in real terms by more than 50 per cent in the 1990s and most prices have also improved.

The development in Australia of processed food products for export is also helping to combat agricultural protectionism. The dairy industry has been particularly successful in expanding such exports to the Asian market.

The country’s clean and green image is an important factor behind the export resurgence, notably for meat, and this emphasises the need for good managers. A major contribution is also being made by the lower exchange rate and, although the $A is said to be under-valued, the lowering of domestic and world inflation reduces the likelihood of the earlier wide fluctuations that made agriculture so risky.

Of course, the recent difficulties of attracting young people into agriculture derive from past economic problems experienced by farmers, reflected in the stagnation in farm GDP in the 1980s. The continued decline in the number of farm businesses in the 1990s also fostered an adverse image of rural lifestyles, as did the belief that a wholesale population movement to the cities was occurring.

In fact, the growth in provincial cities’ populations has been only slightly less than in capital cities. And while this growth has often been at the expense of nearby smaller towns, these "sponge cities" have provided the opportunity to access a more diverse life style, as well as cheaper goods and services. Improved transport links and more reliable vehicles allow more management by those living "off-farm".

Nor should the reduction in farm numbers be taken as an indication of a declining industry. Rather, it reflects the extensive structural changes being undertaken to improve agriculture’s competitive abilities.

According to the Productivity Commission, agricultural productivity since the mid 1980s has been growing at nearly three times the economy’s average. Needless to say, the requirement for further improvements in efficiency provides a major challenge to future

managers in the agricultural sector.

Managers and professionals (such as livestock, cropping and general managers) already comprise more than half of those employed in agriculture. Indeed, over 30 per cent of all managers and administrators employed in Australia are in agriculture.

This sounds a signal for young people to become qualified. A business management diploma at an agricultural college, for example, can now earn a starting salary package of over $40,000 a year and institutions offering such courses require only modest entry scores. Also available are degree courses that range from farm management to agricultural science.

Contrary to some perceptions, indicators of student satisfaction with tertiary institutions show a slight improvement from 88 to 90 per cent since 1996 and good teaching assessments have also risen, albeit only to 77 per cent. It is surprising indeed that many institutions providing agricultural training are experiencing difficulty filling their courses.

Michael Moore is a member of the council of Marcus Oldham College, which provides agricultural training.