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Drought turns lean year into national disaster



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MEDIA RELEASE 25 January 1985

Shadow Minister for Primary Industry John Kerin (062)727356 (02)6020330

DROUGHT TURNS LEAN YEAR INTO NATIONAL DISASTER

It is all too easy for the Government to blame the drought for the disastrous state of the rural sector, says John Kerin, Australian Labor Party Spokesman on Primary Industry, at the opening of the National Agricultural Outlook Conference.

But, Mr Kerin emphasises, even without the drought, farmers would this year be facing incomes lower than those experienced during the worst years of the 1970's rural depression. This fact is well established by the latest figures released by the

Bureau of Agricultural Economics.

"The drought has turned an extremely lean year into a national disaster.

"Farmers' input prices will go up by 11 per cent but-, even with some pretty optimistic assumptions, returns will rise by only 5 per cent."

Mr Kerin points out that taking a general overview of farm costs, as the BAE has done, can hide the much higher costs incurred by some drought affected farmers, particularly those buying stockfeed.

These figures also fail to take account of the enormous cost imposed on farmers forced to sell stock at rock bottom prices.

"Government policy has done little to help farmers combat deteriorating economic conditions. Over the past 6 months farmers have increasingly faced a situation of declining competitiveness.

"Inflation in Australia's major trading partners and competitors has fallen to rates far lower than that Mr Fraser has managed to achieve with his single minded policy of 'fight inflation

first'.

"Australian farmers no longer even have the advantage of a depreciating Australian dollar. As the dollar rises, farmers' returns are squeezed harder."

Mr Kerin acknowledges world markets for many commodities are depressed and world trade in agricultural commodities increasingly restricted. '

"International grain prices in real terms are at their lowest level for 120 years. World sugar and cotton prices are depressed and meat markets uncertain."

Mr Kerin said that with the deepening recession in Australia, domestic demand will be subdued, providing little opportunity for producers to divert supplies from depressed export markets.