Little Help for Agribusiness in White PaperPosted by Admin, 10th July 2015
The Agriculture White paper launched by the Government last week had some excellent initiatives for farmers, providing a level of security when times get tough such as changes to FMD rules and drought assistance packages. Unfortunately those that rely on farmers for their business such as local machinery dealers will struggle to find the same levels of security and assistance in the document, and as such have been left out in the cold and forced to fend for themselves. This is not unusual but begs the question of why doesn’t anyone look at the larger picture of agribusiness in Australia. When we put agribusiness into the overall contribution of agriculture into the Australian economy, the numbers increase from 3% to over 12% – a large contributor to the economy and up there with the largest industries in the economy.
Sure there will be some flow on effects for agribusiness with the initiatives in the White Paper – when farmers make money, all the businesses that rely on them such as machinery dealers, chemical suppliers, and the local town businesses like the bakery and the car dealer benefit. However, in a prolonged period of tough times like drought or flooding, these businesses suffer greatly as farmers stop spending and while the farmer may get some assistance or can draw oin their FMD, these businesses must fend for themselves. Business is business and if the numbers don’t stack up to a profit or the market is down, only the skilled and well run business will survive – that is reality. We aren’t looking for handouts or special assistance during tough times, but surely an FMD type program that allows an agribusiness to put a few tax effective dollars away in the good times to use in the bad times would make some sense. Agribusiness is treated the same as all other businesses in the economy, however the Government has recognised that living off the land can sometimes be tougher for farmers than their city counterparts, so why not give the businesses that live off the farmers the same recognition and treatment? 20 years ago there was 2000 farm machinery dealers in Australia – today there is 637, and without some thought to the longevity and treatment of these businesses, this number will continue to decline. This will impact the farmers and users of machinery as they will be forced further afield for their machinery, and towns will lose employment and skilled people as they migrate towards the work – something to think about as you consider your next machinery purchase.
Agriculture is a large part of Australia’s economy and needs to be considered as a whole industry, not just the men and women who work the land but also those who rely on farming production and output for their livelihood. An FMD type program would be an excellent start and one which could be easily implemented through a test of how much of a businesses income is derived directly from farmers – not a difficult test for a machinery dealer selling tractors and implements in Victoria for example. Take a few hats and stickers for utes sold to city kids passing through on their way to the Ute Muster and you will have a 100% reliance on farmers for prosperity at a machinery dealer.