Ray rings debt alarm bells
Ray Marshall
“To be brutally honest I was gobsmacked when viewing the figures,” he said on an email sent to media and other stakeholders drawing attention to the issue.
According to the figures, the national rural debt has only declined in three years since 1965 – 1972, 1991 and 2010.
Mr Marshall said farm input costs had increased exponentially in recent years, while farmers received insufficient financial returns for the various food and fibre products they produced.
He said it was “ironic” that large banks, supermarket giants Coles and Woolworths and even WA’s huge grower owned co-operative CBH had all increased the size of their businesses substantially, while the plight of farmers declined.
Mr Marshall said some commentators would blame the sharp debt increase on the 10 year drought in the eastern states and similar natural disasters, like floods and fires, throughout the nation.
But he said WA produced a record grain crop in 2011 of about 15 million tonnes and the rural debt still increased by $2 billion.
Mr Marshall said high interest rates, high grain handling and receival fees, inefficient transport and infrastructure systems, high input and machinery costs and other factors were all adding to the debt and reducing farmers’ profitability.
He said naive governments and activist intervention into industry and trade, like the snap ban on live cattle exports to Indonesia in June 2011, were also hindering farmers’ viability.
“We can’t keep going,” he said.
“I’m an optimist normally – a glass half full type of bloke – but these figures tell me things are no good.
“Farming is just about stuffed – we can’t compete.”
Mr Marshall is an experienced grains industry lobbyist and key member of the WA Grains Group which was formed in 2007 to focus primarily on issues concerning farmer viability.
The former WAFarmers grains council president was motivated to obtain the RBA figures from his bank manager after holding similar conversations with other concerned growers over the Christmas and New Year holiday period.
“You can speak to sheep and grain farmers or any other type of farmer – it doesn’t matter – they all feel like they’re busting their gut for nothing,” he said.
“We’re just not getting enough return for the products we produce but input costs are going up and up and up.
“It’s the old cost-price squeeze.
“I’ve spoken to a few younger farmers about the issue and they’re saying the same things and those I speak to who are my age say they’ve never seen things so bad.
“It’s about time people become aware of the state of farming in this country because the national rural debt is at $66 billion and growing which is just unsustainable.”
Mr Marshall said a key solution was to increase the importance of farming and agriculture on the national agenda.
The National Farmers’ Federation will adopt a similar theme when lobbying during this year’s federal election campaign, to seek greater recognition for food and fibre producers from the nation’s leading decision-makers.
Mr Marshall said when consumers visited the supermarket and had two food items to choose from – the cheaper imported product and the one that’s more expensive but locally produced – they also had an opportunity to make a strong statement, backing farmers, with their commercial decisions.
“The choice is simple; do you want us farmers or don’t you?” the Pingelly grain and sheep farmer said.
Mr Marshall said he believed WA’s share of the $66 billion national rural debt was about 30 to 40 per cent, adding the figures were also reliable.
“They’re from the RBA so I didn’t just pull them out of the rubbish bin,” he said.
Mr Marshall said he had also sent his email warning, along with the RBA figures, to federal Agriculture Minister Joe Ludwig and WA Agriculture Minister Terry Redman.
Mr Marshall said farmers had been borrowing heavily on their equity in recent years and not on the value of their production potential.
He acknowledged a rural debt crisis meeting had taken place last year involving Treasurer Wayne Swan and others to discuss this issue, but asked what action had followed.
He said land valuations may have increased substantially over the past 10 years, but when it came time to sell land there were very few or no buyers, at the highly valued levels.
“Nobody’s got any money, so something’s wrong here,” he said.
WA Grains Group 