Flexibility is what saves family farms: [1 Edition]
Abstract
“The decline in the number of Australian farm enterprises is often cited as evidence that family farms in Australia are disappearing and being consolidated into larger entities,” association policy director Mick Keogh said.
“Larger farms are subdivided and sold as `lifestyle’ blocks, and many of the resulting farmlets are not classified as farms for statistical purposes, because farm output is less than the $22,500 threshold used in compiling the statistics.”
RURAL
REPORTS of the death of the Australian family farm are greatly exaggerated, a new study says.
While the total number of farms in Australia has been declining at a rate of between 0.7 per cent and 1.3 per cent annually for the past 40 years, there is no evidence that average farms are getting bigger, according to a study published this week by the the NSW Farmers Association.
The association began the research to quantify exactly how much larger the average family farm has become. But the statistics did not back up the original thesis.
It became evident that rather than selling up their beloved properties, traditional farming families were relying on either diversification or off-farm income to maintain their farming operations.
“The decline in the number of Australian farm enterprises is often cited as evidence that family farms in Australia are disappearing and being consolidated into larger entities,” association policy director Mick Keogh said.
“It’s likely that some of the reduction in farm numbers arises from rural subdivision that occurs near major cities and regional centres.
“Larger farms are subdivided and sold as `lifestyle’ blocks, and many of the resulting farmlets are not classified as farms for statistical purposes, because farm output is less than the $22,500 threshold used in compiling the statistics.”
In the past two decades these sources of income have increased from around 10 per cent to closer to 20 per cent of total farm income.
The report concludes that rather than signalling the death of the family farm, developments in the past few decades have reinforced that the flexibility of the family farm structure was a key aspect of its ability to accommodate change.
Family farm units are able to economise and continue to operate at levels of profitability that would not be tolerated by larger corporate entities that have shareholders to satisfy.
“The huge productivity gains that have occurred in farm enterprises such as cropping have made it possible for farmers to work smaller farms on a part-time basis, and to also earn income from off-farm employment,” Mr Keogh said. “That is not to say that the family farm won’t be subject to further change, but rather it highlights that the family farming structure appears the best at adapting to change.”
There has been a decrease in the number of farms turning over less than $150,000 and an increase in the higher brackets, with 3 per cent having an annual turnover in excess of $1 million. Also, contrary to common perceptions, there has been an increase in the past five years in the agricultural workforce. This is believed to be largely attributable to the rapid growth in wine-grape production.
Adding to the surprisingly positive picture, only bad weather can hold back strong growth for farmers caused by the low dollar, the nation’s chief agriculture forecaster has said.
Australian Bureau of Agricultural and Resource Economics (ABARE) executive director Brian Fisher told a Senate committee there was tremendous scope for farmers in coming months.
He said the low dollar had proved a boom for lamb, mutton and beef exporters into countries like the United States. This had been reflected in climbing prices and strong growth in total export levels.
“I think the response to the lowering of the Australian dollar has been quite spectacular,” he said.
But, as Dr Fisher said, the only thing that could get in the way was the weather. There are growing concerns in southern and central NSW, parts of Victoria, South Australia and Western Australia over continuing dry conditions.
Just 20 per cent of the nation’s wheat crop has been planted compared with about 80 per cent in better seasons.
The weather, that eternal bane of farmers, may yet deny them the twin benefits of a low dollar and better commodity prices.