Australian farming in a nutshell

The following graph says it all for Australian farming. Terms of Trade (prices received, compared to prices paid) have been steadily declining at least since the early 1950s. Productivity has risen, which has maintained profitability. However in recent decades, productivity seems to have plateaued, as well as being influenced by droughts.

Trends in Australian Broad-acre Terms of Trade (TT) and Productivity (TFP). ata from ABARES, quoted by Mullen and Keogh, 2013, AARES Conference, Sydney

The question now is, can productivity improvement be restored? Unfortunately public R& D funding has been in decline, and farm profits are needed to test and develop new technology.

But most farmers can drive along any country road, and see that things can be done better. Also communication technology may help move things along more quickly. This will still require an energetic mindset, looking for opportunity.

Hakea laurina in bloom - a great time of the year on the south coast

Admittedly we have mostly enjoyed a good rain to start the season, but autumn weather on the south coast is always lovely. This is also when we can enjoy the Hakea laurinas in full bloom.

How should we handle crop stubble?

Everyone "knows" that good farming practice is to retain stubble for all the well-know reasons. Stubble will protect paddocks from wind and water erosion, help conserve valuable moisture, and recycle nutrients.

 
On the other hand, stubble can prevent effective herbicide activity, can harbour disease and perhaps insects, and more recently it has been shown that stubble can increase frost damage. Also of course, not all seeding machines can successfully plant seed into such stubble loads. For whatever of these reasons, the decision by the farmer over the road was to burn the stubble -

We have been debating these pros and cons for decades, and though stubble is being retained in a lot more paddocks, the decision is complex. In fact, you would wonder how a farmer can make a rational choice.
Sometimes a compromise is possible, which is reflected in this near-by paddock where stubble has been burned in strips, presumably where the weed seeds were channelled at harvest time.

  


 

What kind of weirdos are economists?

After a fascinating lecture about canned soup from an economist, one may ask - "what kind of weirdos are economists?"
This guy had studied canned soup sales and pricing in Canada, at the expense of a large German supermarket. You can understand why a supermarket chain might pay for it. There were 200 kinds of canned soup sold in Canada during the study period. With some clever maths, and heaps of numbers, he could calculate not only things such as which flavours were most popular (chicken!), and the popularity of brands, but possible opportunities for increasing prices.
Economists can have a lot of fun using such trivia to show how gullible other people can be. Tim Harford (The Undercover economist) for example with one story "Paying not to go to the gym" -
http://timharford.com/2006/03/paying-not-to-go-to-the-gym/

But people, including economists, who live in glass houses should not throw stones. Tim also felt compelled to defend economists, who themselves can sometimes be too clever by half -

http://timharford.com/2014/04/economists-arent-all-bad/