The government provides Australian farmers with roughly $20 billion in assistance every year. This support comes under fire because of the other things we could be doing with the money, notably, this year, increasing Newstart.
Such trade-offs are largely fabricated and Australian farmers receive assistance well below the OECD average.
The support provided to farmers around the globe partly reflects the value countries place on being able to feed themselves. Despite this assistance, more and more farmers are leaving the land in Australia, driven by yet another climate-change-induced drought and a perverse national water policy.
In the Christmases of our future we may have to rely increasingly on food grown overseas to feed our booming population. It is time to contemplate the repercussions on our food and national security of an exodus from the land.
Farmers have always been at the mercy of the climate, there are good years and bad years. With climate change we are seeing the droughts get longer and more intense, the floods and the fires more frequent. And if we leave it to individual farmers to manage this increased uncertainty, we will be left with an industry unable to feed the nation.
As we have seen with the bushfires enveloping Sydney in hazardous smoke, climate change denial has costs beyond the failure to reduce emissions. Denial also leads to a lack of policies addressing the consequences of climate change. Farmers for Climate Action have recently added to calls for a national agriculture strategy that accepts climate change is happening.
This need was clear 10 years ago when the Garnaut report estimated that food production in the Murray-Darling Basin, where 40 per cent of Australia’s food is grown, would shrink by up to 97 per cent by the end of the century without action on climate change.
Talk to farmers from the Murray-Darling Basin, however, and they will tell you that climate change will only cause the demise of food growing in Australia if the market for water doesn’t get there first.
The market for water in the Murray-Darling Basin aims to give the river the environmental flows it needs to survive and ensure water is used to grow the highest “value” crops. But this “value” is measured in terms of the price that crops fetch on international markets.
So, while in the NSW Murray region growers of internationally profitable cotton and almonds got close to their full water allocation this season, producers of wheat and dairy received zero allocation.
There is an economic argument that we should grow the most profitable crops, especially if foreign food is cheaper and can be grown where there are no water shortages. Under this model, the water market fails to factor in the risks of having less control over the supply and quality of our food in the long term.
Affected farmers are calling for the water market to be scrapped, or to “bin the plan”, creating a focus on the trade-off between environmental flows and agricultural use. Greenies versus farmers.
But the questions are much more complex than glib tabloid headlines – farmers understand the environment they are the stewards of better than most and they have no interest in its long-term degradation. Environmental flows should be based on the best available science and nothing more.
When it comes to water that is made available for agriculture, a market is an efficient and “optimising” way of allocation, but only if it reflects society’s preferences. As an economist, I get jittery making judgments about what should or shouldn’t be produced. That said, putting the profits of water traders that never plant a seed and growing cotton ahead of ensuring water is available for staples such as wheat and dairy does not reflect our basic needs and preference for a secure supply of high quality food.
The recently launched ACCC review into the water market will look at some of these issues, including whether allowing traders with no interest in agriculture to buy and sell water is distorting the market. But we need a more coherent strategy from the government that ensures the water market properly reflects the importance of the Murray-Darling Basin as the nation’s food bowl.
I am looking forward to sitting down next week, hopefully with that to-do list largely completed, and enjoying a loud and chaotic Christmas lunch with family. But I’ll do so mindful that those that have grown the food on our table are doing it hard this year. And it will only get harder until the government accepts that climate change represents a fundamental threat to our way of life, right down to the food we serve our families.
Angela Jackson is an economist at Equity Economics.