WAFARMERS president Dale Park believes agriculture in general is in a healthy state but it is WA’s rural towns that are suffering.
He believes with fewer people in regional areas, small towns are in danger of dying out and if rural WA is to remain looking vaguely like it is at the moment, other industries are going to be needed to be encouraged to set up businesses in the bush.
He said decentralisation needs to happen, but there needs to be infrastructure put in place to help these businesses make the transition from city to rural.
“The real factor in agriculture is that it is becoming more and more efficient,” Mr Park said.
“With that efficiency comes the need for less people, which means less population in rural towns and less infrastructure being built.”
Mr Park said diminishing margins were having the biggest impact on rural WA.
He believes fixing the rate of return will go a long way to addressing many of the issues identified by WA farming families.
“Reduced margins are really chopping into farming businesses now,” he said.
“You look back 30 or 40 years and it was really a golden era for farming compared to now.
“The problem is that when farmers talk about profitability they talk about difference between costs and income.
“When businesses talk about profitability they talk about difference between a return on capital and the costs versus the income.
“Farmers never talk about that because even the really good farmers are only making one to two per cent on their money.
“Wesfarmers wouldn’t get out of bed for less than 15pc.”
Mr Park said greater transparency was needed in WA’s agricultural supply chains to help lift margins.
“In our talks with Coles over the milk price war, we have been pushing this line,” he said.
“Coles’ management attitude has changed because I think they thought they could import produce from over east if there was a WA boycott, or whatever.
“But the message we received is that Coles recognised its customers wanted local produce and so the company wanted to talk directly to farmers.
“They are also saying that when they offer a price rise for milk there is an issue with that being transferred back to the farmgate.
“If you have transparency people can make a judgement but if you don’t have it then you can’t make a valued judgement about anything.”
Mr Park said he believed Coles was genuine in its concerns for WA farmers and that it would like to deal direct with farmers.
“The most important people in a pipeline are the people who produce it and the people who buy it,” he said.
“Everybody else is ancillary to that and what happens is that the buying and selling of the product gets in the way of actually doing the job.
“What we are saying to Coles is to buy from growers and the processor can then just concentrate on processing the produce at the cheapest price.
“Bringing transparency into the market is going to do more for farmers than anything.
“The margins are still going to be tight but if you can identify where the inefficiencies lie, then you have to be able to bring about some gains.
“If we had more transparency then we could identify these issues much easier.”
Source: farmonline.com.au
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