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Dry brings rural worries to city

With most of Queensland in drought, farmers are struggling to cope. And as Jane Milburn reports, food prices in the city are expected to rise.

Although northern parts of Queensland and Australia are enjoying an excellent season, the bottom 60 percent of Queensland is drought declared along with vast tracts of southern states.

The winter grain harvest was down by 60 percent, and AgForce is foreshadowing a drought-induced rise in food prices as grain shortages impact on intensive livestock industries and the food processing sector.

But hardship breeds innovation in the bush and Queensland producers remain optimistic about their future.

Queensland Farmers Federation chief executive John Cherry says that despite the drought, the annual gross value of production – calculated by the Department of Primary Industries and Fisheries’ Prospects survey – for 2005-2006 is forecast to be $10.93 billion.

“GVP has grown 9 percent during past five years at an average of 1-2 percent per year, which suggests farmers are managing better and smarter and just getting on with the job despite the growing water shortage.”

The 1994/95 drought was the wake-up call for fifth generation farmer Linton Brimblecombe, who says it was the driver for a new way of thinking about securing the water that underpins farming in the Lockyer Valley.

That drought led Linton to invest $2 million in water infrastructure and dams to secure his water supply, as much as that is possible. The State Government missed that wake-up call, because rain fell in the Wivenhoe catchment that year and there was still plenty of water for Brisbane.

But a decade on, this drought has made its presence felt in the city where residents on are scrambling to set up rainwater harvesting schemes (water tanks) to drought-proof their gardens.

This time the government got the message, some hard decisions about dams and water infrastructure have been made, there’s a plan to drought-proof the cities in the south east with a grid to move water around as required.

“Queensland must not get complacent, we must not miss another opportunity for infrastructure building,” says Linton, a beetroot grower who supplies Golden Circle.

It was the Lockyer farmers who conceived the idea of recycling Brisbane’s wastewater. The western corridor pipeline the State Government is now building to provide water for power stations was originally a farmer-driven initiative.

They’re still keen for a piece of the action and have put forward a business plan that would see part of the recycled water diverted to agriculture in the Lockyer, where urban encroachment and a lack of irrigation water have seen farming shrink in the area by 30 percent in the past two decades.

“We’re not whingeing farmers looking for handouts. Farmers are willing to put up $50 million to make this happen and we’re looking to the National Water Initiative to put up the other $50 million.”

Although farmers are used to dealing with challenges from the elements, with each drought it gets a little harder and requires constant innovation.

It was the desire to sure up his water supply that drove Gatton orchardist Ross Stumke to source recycled water from Gatton township, which is piped 7km from the local treatment plant.

With funding from federal and state government, and support from Gatton Shire Council, Ross and two other farmers secured an annual allocation of 100 megalitres in 2002 which is applied by micro sprinkler or trickle irrigation to his persimmon, fig, peach and nectarine trees.

“Water is always going to be our greatest limiting factor and we have to carefully monitor its use because we have just enough for our current crops and no room to expand.”

On the Darling Downs, Jeff and Marilyn Bidstrup won’t be planting any cotton this season after being industry leaders for years. The Bidstrups have chosen to use what little water they have to grow sorghum, which will tolerate running out of water better than cotton will, and have faith that it will rain before that water runs out.

Despite spending millions on controversial water infrastructure, the drought is impacting on the biggest cotton grower of all, Cubbie Station, which this week declared it has hardly any water left.

Recent Rural Adjustment Authority figures show that total farm debt for 2005 in Queensland was $8.67 billion, an increase of $966 million from 2003.

But QFF drought project officer Peter Perkins says that aggregate level of debt is within acceptable levels, considering the annual value of the sector is $11 billion.

He estimates about 5000 of the 18,000 farmers in the affected areas are receiving assistance, in the form of interest rate subsidies and Centrelink EC relief payments when they can demonstrate they have been severely impacted by drought.

Since 2001, about $300 million has been provided as interest rate subsidies to Queensland farmers.

In response to the drought, livestock producers have been steadily destocking over the past few years with Australia’s biggest cattle selling centre at Roma having record throughput of 408,000 cattle in 2004, and 370,000 in 2005, according to Roma Saleyards market reporter John Gilfoyle.

“There have been a lot more store cattle coming on to the market during the past two years, but there is strong demand, particularly from northern producers, who have had good rains from the cyclones earlier in the year,” says Gilfoyle.

So is it the end of the boom time for cattle? North Queensland cattle producer and chairman of Meat and Livestock Australia Don Heatley says no, not in Queensland.

The seasonal influence has dampened demand, particularly in southern states, where the market has dropped about 25 percent.

“But there has been no fundamental change in the marketplace and export markets remain strong,” Heatley says.

After years of rising cattle property prices, there is still keen demand for good properties, with money readily available and relatively cheap to borrow says founder of Herron Todd White valuers Kerry Herron.

“But drought cannot be ignored and is impacting very severely on much of southern Queensland, and southern states, with far fewer properties are being advertised, and even fewer sales going through,” says Herron.

South west Queensland sheep producers such as Dick and Donna O’Connell, from Thargomindah, faced the reality of the ongoing drought and decided their most viable course of action was to destock and preserve their financial position.

Over the past five years, they progressively sold-off sheep and cattle while they were still in good condition and used the proceeds from those sales to retire farm debt and invested what was left off the property.

“Each year the drought continues makes us glad we decided to sell the stock,” says Dick, who remains optimistic that despite this run of rotten years, things will come good.

In the agribusiness banking sector, Suncorp’s southern Queensland regional manager Geoff Magoffin says droughts are an everyday part of life for their rural clients and most have plans to sell down, or contain expenses, as any business does in tough times.

“It is just business as usual for us. Producers just batten down the hatches and wait for rain, there is not much else they can do.”

AgForce drought coordinator Rod Saal says the country people he deals with are an incredibly resilient group.

“The selection process has already happened and those that are still in the bush have been tested by its cold, harsh realities. They’re wonderful, hardy people whose human spirit armour-plates them for the tough times,” says Rod.

“But rural small business is under pressure and there needs to be recognition of the value of financial counselling because people do have problems with depression, debt, drought and suicide despite their overall resilience.”

“The benefits of supporting people in the regions far outweigh the costs that government invests in providing another tool (farm financial counselling) for people in the bush to access so they continue to be viable.”


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