CROSSING THE DIVIDE

Is this the most error-ridden piece of writing ever about agriculture in a national newspaper?

The back page of the Australian Financial Review on Friday, 17 May 2013 featured an article, written by Tony Boyd, ‘For farmers outstanding in their fields . . .’ Boyd’s article heavily criticised the recent government announcement of limited concessional finance being made available to some eligible farmers in response to drought conditions and the slump in beef prices, due in part to the reduction in live cattle exports following the suspension of that trade by the Australian Government.

Irrespective of an individual’s views about the appropriateness of the announced assistance measures, the article contained many assertions that were factually incorrect, and damaging to the Australian agriculture sector.

Tony Boyd either hates farmers, or was in such a rush with his recent piece on Australian agriculture that he ignored any facts. If there were journalistic awards for the most error-ridden piece of writing ever about agriculture in a national newspaper, then this article would be a certain winner.

Let’s start with his statement that:

Ludwig’s subsidy of the rural sector is in keeping with Australia’s long-held tradition of propping up uneconomic rural operations. No other sector of the economy is given the latitude to run itself into the ground and then stick its hand out for government assistance.

The facts are that the OECD has monitored levels of national agricultural subsidies for the past 20 years, and Australian agriculture receives the lowest – repeat that lowest – level of taxpayer subsidy of any national agriculture sector globally. No other national agriculture sector on earth receives less taxpayer dollars in subsidies, so how Boyd can assert that Australia has a long-held tradition of propping up uneconomic rural operations is an interesting question. In fact, recently announced changes to drought policy have reduced Australia’s meagre agricultural support measures even further than the OECD data indicates.

Now let’s look at the second part of the above claim. Some of Boyd’s colleagues at the AFR have been spending an enormous amount of effort trying to get to the bottom of the extent of taxpayer subsidisation of the Australian car industry, and from what they have discovered the dollars of subsidies for that sector – both in the past and in the future – make any subsidies to agriculture look miniscule by comparison.

In fact the Productivity Commission annually publishes an estimate of the level of assistance (either taxpayer subsidies or tariff assistance) provided to Australian industry sectors. The most recently published report identifies that the level of assistance (the value of assistance measures as a percentage of industry output) for primary production (farming, fisheries and forestry) in 2010–11 was 3.4%, and within that sector the cropping industry received assistance equal to 0.6% of output. This was during a period when drought assistance was being provided, which has now been discontinued.

Compare that with the estimated levels of support for sectors such as: Motor vehicle and parts manufacturing (8.5%); Textile, clothing and footwear manufacturing (10.6%); Wood and paper products manufacturing (4.7%); Metal products manufacturing (4.3%); and Other manufacturing (5.0%). It becomes immediately apparent how factually incorrect Boyd’s statement is.

There are other equally incorrect statements and assertions in Boyd’s article, which would take a much longer piece to correct. A simple example is his assertion that farmers in Western Australia (WA) have planted crops 100 kilometres outside the boundaries of land that is sustainable for cropping, and that is why there is a debt crisis in the WA cropping sector. If Boyd had bothered to check, he would have found that debt levels of crop farms on the eastern side of the WA grain belt (presumably these are the ones 100 kilometres outside the sustainable boundary) are in fact lower than debt levels of crop farmers in much higher rainfall areas.

If the Australian agriculture sector was a single corporate entity, then it would have very good grounds to sue Boyd and the AFR for defamation.

Mick Keogh’s letter to the editor on this issue was run in the Australian Financial Review on Monday, 20 May 2013 to correct the misinformation that was provided in Tony Boyd’s article.

Keep up-to-date with discussions of current issues in Australian and international agriculture policy by visiting the Australian Farm Institute’s blog and chat room ‘Ag Forum’.

Back to August 2013 Insights contents page.

Images: ABC, CSIRO, Dave Young