U.S. Farmers Like Their Cheap Food Policy

LANSING - Mar 24/05 - MFB -- Michigan farmers who recently returned from a 10-day agricultural study tour of eastern Australia say the globetrotting left them with a deeper appreciation of U.S. farm programs that keep food affordable for Americans and a keener awareness of the dangers that occur when agricultural water use is subjected to government restrictions.

Learning how Australian farmers have reportedly transitioned from being government subsidized to relying solely on the marketplace for income was one of the missions of the Michigan Farm Bureau (MFB) trip. But the 20 tour-goers could not substantiate this claim, and they found several incidences where Australian farmers appeared to receive indirect assistance and where the nation's transition away from government supports seemed to come at the expense of consumers.

MFB President Wayne H. Wood said it appeared the Australian government was more concerned about exporting agricultural goods and limiting imports than ensuring an affordable food supply at home.

In fact, two-thirds of Australia's agriculture production is exported, in contrast to 25 percent to 35 percent in the United States. Australia exports to the United States have doubled since 1993 and are up over three-fold since 1996.

As a result, Australian consumers, in essence, have assumed a "farm aid" role by paying significantly higher prices for their food.

Two percent milk, for instance, sold for $7.50 a gallon, while eggs went for $4 a dozen, and New York strip loin cost $10 a pound. (All prices reported in U.S. dollars.) Australian citizens also face steep income taxes, as high as 50 percent on a salary of $56,000, so their lower level of disposable income is largely eaten up by inflated food expenses.

"The government philosophy there is not for Australian farms to produce for the domestic market but for the export market, and for the domestic market to pay the cost," said Wood, a Sanilac County dairy farmer. "So instead of taking tax dollars like the United States does to support agriculture, money is taken from consumers directly via food processors and retailers."

While the Australian philosophy runs counter to the U.S. farm bill purpose of providing "farm security and rural investment," it's not illegal. "Right or wrong, the philosophy is compliant with the World Trade Organization (WTO)," said Wood.

Tour-goers also discovered that Australian farmers indirectly benefit from a national health care system, so they save on insurance expenses for their families and their farm employees. In addition, the group found several incidences where the island country's phytosanitary standards were more stringent than WTO minimums, allowing the country to legally ban imports under the guise of "health concerns." Participants also heard tales of imports never reaching market because they were stuck under quarantines.

The pitfalls of government restrictions that severely limit farmers' access to water for irrigation and livestock production also left a lasting impression on tour-goers.

The nation is suffering from a 10-year drought. Most of the water used for irrigation comes from surface water collected during major rain events, but many areas visited receive only 20 to 30 inches of rainfall annually. On top of this, much of the groundwater has high salt content, so managing soil salinity is often a challenge.

Despite farmers' conscious efforts to conserve every last drop by investing in dykes to catch runoff water and retention basins to collect rainfall, the farms visited were noticeably crippled by water use restrictions. Monte Bordner, a St. Joseph County beef producer, recalled a stop to a 50-acre cotton farm which was very conservative and efficient in its irrigation but had not received any rain since January and would lose the entire crop.

Fellow tour-goer Rob Richardson, a Kalamazoo County specialty crop and swine producer, said such tight restrictions would be a threat to his corner of Michigan where many of the specialty crops grown are dependent on regular and plentiful irrigation.

"There's a definite economic benefit (to agricultural water use), and we don't want to impede that," said Richardson, who irrigates more than half of the 2,100 acres he farms.

Bordner, who earns a significant portion of his farm income by leasing ground for irrigated crops, agreed, noting that the Australia experience has motivated him to become more engaged in the water debate back home.

A good chunk of the trip centered on Australia's national animal identification system. The nation has required premise identification for livestock movement and sales for decades. The country is now expanding to implement an electronic identification system to record and track individual animal vitals.

Bordner said livestock producers on the trip seemed encouraged by the management possibilities that the high-tech ID affords Australian farmers. Wood agreed, adding that Australia is "well ahead" in this international movement.

The study tour also offered participants the unique opportunity to break into smaller groups and stay overnight with a farm family in the southeast countryside of Queensland.

"This was the best part of the trip," said Richardson, who enjoyed intimate conversations comparing an environmental management program called Landcare to U.S. equivalencies for conservation.

Landcare began as a voluntary, incentive-driven program, Richardson was told, and at one point, boasted an 85 percent participation rate among Australian farmers. But the program has become regulatory in nature and participation has dropped.

The Australian experience underscores why domestic programs like the Michigan Agriculture Environmental Assurance Program should remain voluntary and incentive-driven and be given time to show their full potential, said Richardson, who chairs the MFB Natural and Environmental Resources Advisory Committee.

"Landcare had been undermined because it became more regulatory," said Richardson.

Copyright (c) 2005 Michigan Farm Bureau

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