Carbon tax misfires

I imagined there would be riots when the average Australian family faced a 10% cut in income as a result of the carbon tax. But for some reason, nobody seems to be making a big deal about it.

I suspect it’s pretty quiet because although mine is a very average family (two kids and a dog), we’re not on the political radar.

The carbon tax is expected to slug us around $5000 per year – a whopping 10% of the average dairy farm family’s income. As reported in The Land and the Australian Financial Review:

The three majors that will pay the new tax from July 1 are already investing in low-carbon technologies but Murray Goulburn Co-operative estimates rising electricity prices will cut the annual income of the average farmer by $5000 a year, The Australian Financial Review reports.

“Profit in the average dairy business in recent years has averaged $50,000,” one MGC general manager, Robert Poole, said. “So that represents a 10 per cent cut. For the average dairy farmer, the tax is going to cut hard into their profits.”

How can this be? Well, because even though I plant 1000 trees or more on the farm every year and have built some of the most carbon-rich soils in the country (up to 22% organic matter content), I cannot participate in the poorly framed Carbon Farming Initiative.

The milk processor we supply, Murray Goulburn, will face increased costs of $10 million per annum and will pass those costs onto farmers – guaranteed. It is guaranteed to do so because MG is 100% farmer-owned so the buck quite literally stops with us. Our fertiliser, fuel and electricity prices will also rise.

Ironically, if MG was spewing out far more greenhouse gases, we might not face this crippling tax because “emission intensive” businesses that export just 10% of their products are considered “trade exposed” and given special concessions. MG exports around half of our milk but because it’s not that “emission intensive” (aka dirty), it misses out on concessions.

Please, can somebody explain the logic behind this?

Murray Goulburn Co-op sheds jobs: why it’s happening

The co-op we supply, Murray Goulburn, has made an announcement that immediately made me sad. In an email sent to its farmers yesterday, managing director Gary Helou, wrote:

“The change program embarked on by MG is even more critical given increasing cost pressure and the recent significant decline in world market prices due to higher global milk supply. This initiative will help reduce the impact of falling world prices and a high Australian dollar on our supplier/shareholders. As a result of these changes, MG’s total workforce is set to reduce by 12% or 301 roles.”

While it makes me sad, I’m not surprised. Farmers are struggling to survive (less water, increasing costs, horrible prices and now the carbon tax slug estimated to cost us $7,500 each) and milk flows have dropped as a result. When appointed as the new CEO a few months ago, Mr Helou announced he would cut the co-op’s operating costs by a whopping 25%. That’s a lot of money.

As he went on to write in yesterday’s email:

“We continue to employ more than 2,100 people, mostly in rural and regional Australia, and contribute an estimated $6 billion to the Australian economy. These changes will make a significant contribution to our goal of reducing operating costs by $100 million this year and set us on the path to becoming a world leader in dairy foods”.

To give you some background, MG is Australia’s last big dairy farmer co-operative and processes around 35% of the country’s milk. You can’t own shares in MG unless you supply the co-op milk, so all the profits go straight back to farmers. The other big players are privately owned and profit from buying milk at the lowest possible price and selling it at the highest possible price. In effect, this means that MG tends to set the benchmark for the price dairy farmers like me are paid for their milk.

This is why I feel torn about the “change program”. On one hand, I am worried that somewhere along the way, we will weaken MG’s co-op values but, on the other, we desperately need MG to be strong and efficient. Neither the 2,100 MG workforce or Australia’s dairy farmers can afford to lose this gentle giant. Please be careful, Mr Helou, and good luck.

A typical summer’s day on our dairy farm

Summer is the laziest time of year on our farm and yesterday was a pretty typical day.

5am Wayne rounds up, Marian changes another nappy.

5.30 Milking starts.

8.30 Milking’s finished, clean-up begins.

9am Marian, Alex and Zoe head to see Papa.

9.10 Zoe, Alex and Marian plant trees in the margins of the wetlands while Papa hoses the yard

Seedling leaves

Indigenous eucalypts

10.30 Papa’s finished hosing the yard and goes to feed the calves.

10.45 Emergency! Papa phones to say there’s a break in the fence and M, Z and A go to the rescue.

Fencing repair

"What a lovely morning for repairing fences, don't you think, Mama?" - Zoe

11.15 We all get back to the shed for a cool drink and catch-up. Tanker’s come and gone – same litres as the last pick-up, which is good news in summer!

11.20 Papa makes repairs to the dairy. Mama, Zoe and Alex head off to check the paddocks.

11.55 Alex is huuunnnggrrrry and wants to get out of the carrier NOW. Head to the house for lunch.

12.30 New neighbour, Garth, drops by to introduce himself and a young fellow looking for weekend work.

1.15 Back out to look at the paddocks and work out the week’s pasture rotation. Papa starts shifting silage.

Bringing in the silage

Papa busy bringing in the silage

2.30 While setting up paddocks, stop to fix an overflowing trough

Trough algae

Oooooh, slimy algae!

2.45 Splat in the mud – must change pants and boots!

3pm Time to round up!

Rounding up

Ho up there!

3.35 Milking again.

3.40 Plant a couple more trees and then time out for Zoe and Alex.

Ashamed to be a dairy farmer today

Yesterday, two industry representatives and a dairy farmer spoke about the treatment of bull calves on Australia’s Radio National program, Bush Telegraph.

It made Victoria’s dairy farmers appear as callous as Big Tobacco and today, I am ashamed to call myself a farmer of any description, let alone one that bludgeons premature calves to death with an axe.

The media feeds voraciously on such hideous depictions and it will be all over the internet and in the mainstream media unless something with even more news appeal happens this weekend.

This is something we can’t deal with by talking about industry standards and so on. Nobody believes that stuff. None of it resonates in the soul. We need to tell people the whole truth and how we feel about it.

And the truth is this:

I will never induce the birth of a calf unless its mother’s life depends on it. In the four years since I took over custodianship of the family farm, this hasn’t happened.

I can barely manage to hear the shot ring out as a suffering animal is euthanased humanely, even though I know it is the right thing to do.

I will always put the quality of our animals’ lives before profit.

We sell every bull calf we can to neighbours who rear them until they are big and powerful steers, even though we sacrifice income to do it this way.

The bottom line is that I will not do anything on the farm that I could not show five-year-old Zoe without any qualms. Our farm is also our home and we could not live with cruelty.

Farmer’s forums are jammed with distressed dairy farmers this morning and I spoke long into the night about it with another yesterday. I am ashamed yet I am proud to know I am not alone in this. If you are a farmer reading this, please add your voice to the news forums and don’t be afraid to tell them how your heart guides you.

This farmer is a jack of all trades and a dud at fencing

Repair to fence

Fence repairs are clearly not my forte

The skills a dairy farmer – or family – needs are astounding when you start listing them:

  • vet nurse/paramedic
  • animal behaviouralist
  • nutritionist
  • mechanic
  • chemist
  • agronomist
  • biologist
  • environmentalist
  • fencer
  • machinery driver
  • plumber
  • electrical TA
  • project manager
  • accountant/book keeper
  • trainer
  • OHS officer
  • human resources manager

Understandably, nobody’s good at all of these roles and some of us describe ourselves as a “tractor man” or a “cow lady” or “pasture supremo” or whatever takes their fancy. But, unfortunately, we all have to have a go at all of them. One thing I am not is a “fencing fellow” as the pic at the start of the post demonstrates. Our neighbour Rob can tie immaculate reef barbed wire…but then he’s both a sailor and engineer!

Sometimes, doing a good job means bringing in specialist expertise and equipment, so I am not shy of engaging good contractors and consultants. Might seem expensive in the short term but there are good savings to be made with the right advice.

By the way, here’s a strange-looking “paddock Yeti” left behind by the flood.

Yeti in the gully

Yeti in the gully