There are many people more qualified to speak on economic vagrancies than I, however it seems from here that the writing is on the wall in the long winter of 2022.
After such a staggering period of growth in everything from commodities to real estate & shares, the handbrake has definitely been jerked on with the RBA now expecting 7% inflation in the near future and adjusting interest rates accordingly. “Bubble” is a word that comes to mind.
We think we have no control over spiraling costs and crashing markets; but by sticking to the fundamentals, I reckon we can do more than we think.
When it comes down to it, Food and Energy are the only things essential for life. Everything else is fluff you can do without. Warm fluff, but fluff all the same.
Agriculture is at the forefront and Figure 1 above shows the effect of the last financial crisis on the international Agri-food trade (not much); highlighting the resilience of the food sector in times of adversity.
So as farmers, we of course want customers to buy our Australian grown produce over imported product. Most of us see the damage supermarkets and multinational food processors do in depleting the value and quality of our produce and blocking transparency from paddock to plate.
Ironically however, we often don’t see the same issues in our farm INPUT supply chains.
In the same way that consumers buying smallgoods from Europe, canned vegetables from China or seafood from S.E. Asia destroys local producers’ businesses; buying farm gates & steel from China, wire from Indonesia and fertiliser from Canada does the same thing to our local supply businesses. Our actions makes other Australian owned businesses less resilient.
We expect farm produce customers to ask the hard questions of their food suppliers- “where is this from”, “how was it produced”, but then take the “she’ll be right” attitude in purchasing farm inputs.
It’s no secret that agriculture has been on the receiving end of declining terms of trade for many decades. An anomaly like 2021 where commodity price increases exceeded input cost rises has quickly been bought back to the status quo in 2022. But what isn’t said is that the exporting of money for increasing farm input costs largely goes to a small number of (overseas) mega corporations.
It’s time to fix this mess and holistic thinking is the first step. Does your farm business have a purchase policy for Australian inputs? Do you know if the shop, the distributor and the manufacturer that’s supported by your purchases is Australian owned? If not, do they pay tax in Australia or do they export profits?
Keeping money circulating in OUR system may be considered Nationalistic, but it isn’t against the law and is the only way to stem the tide of wealth exportation. |
Cover Crop VS Synthetic Fertiliser
