Jo Hockey’s no-win situation

Treasurer Joe Hockey’s decision to veto the $3.4 billion US takeover of GrainCorp placed him and the new government in a no-win situation, particularly given the Nationals’ opposition to the deal.

However, it was some of the reaction to the decision that took one’s breath away, particularly from someone who should know much better, national secretary of the Australian Workers’ Union (AWU) Paul Howes.

Tasmanian Country readers will know that both the TFGA and the NFF are unopposed to foreign investment per se. Australian agriculture has developed on the back of foreign investors; and without that investment, many of the advances in our industry would not have been achieved.

However, an institution such as GrainCorp and the port infrastructure that it effectively controls, plus the demise of the single desk for wheat exports in 2008 retarding competition, placed it in a special position.

With the Foreign Investment Review Board split on the sale, Mr Hockey deemed it would have been contrary to the national interest. We accepted that.

Mr Howes did not. Instead of keeping his own counsel on an issue he clearly knows little about, he used the occasion to deliver an illogical and ill-considered spray against Australian farming, what he termed “ma and pa farming”, the Beverley Hillbillies of their day.

And he looked abroad for our transformation, to the role model of the US, with bigger, corporatised farms. This would avoid boom and bust cycles for smaller concerns that were concentrated into one sector, he suggested.

Figuratively raising the Star-Spangled Banner, he lauded the “large scale conglomerates that can diversify across different states and different feedstocks and take advantage of those different elements to be able to have sustainable, long-term investment into the sector”.

Now I’ve heard everything. Paul Howes, a union leader, lecturing farmers on how to run their businesses. What next? A dissertation on trade union reform by the NFF President?

And he surely couldn’t have been serious in suggesting Australian farmers should model thir businesses and industry structures on what American farmers do?

If ever there was an unsustainable farming industry, it is that in the US. The 2.1 million farmers are so heavily subsidised by the state that they are essentially protected from any market forces. The cost of the current US Farm Bill is hard to determine, but the fact that there is outrage over talk of cuts of some $40 billion to one part of the program alone makes it clear we’re not talking chicken feed.

The Australian Farm Institute says that 98 per cent of US farms are family-run and more than half are unprofitable, with farmers relying heavily on subsidies and off-farm income. Plus, and this is a huge plus for them, they mainly supply the domestic market, which is protected from international competition by a raft of tariffs and trade barriers.

And there is an even bigger plus: American farmers pay $7 an hour for labour and, when they can, they use immigrant workers who are often illegal and so outside the regulated wage system altogether.

Did you not know that, Mr Howes?

Did you not know that in Australia we have a deregulated, unsubsidised agriculture sector and that the number of farms has halved in the last 20 years as they have consolidated into larger units?

Did you not know that there is virtually no tariff trade protection for Australian agriculture?

Did it slip your mind that the minimum wage rate for Australian farm workers is more than $20 an hour and their conditions are far better than in the US? I am sure your AWU members will be impressed to hear that you think they should now be earning $7 an hour instead of their current award rates.

Next time do your homework, Mr Howes. Or, better still, stick to talking about things you actually know something about.

The good news in Tasmania is that the output of agriculture here, with its predominance of family farms, continues to outstrip other sectors of the economy – despite all the hurdles that are put in our way.