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  • Northern cattlemen expect bumper year

    After an initially positive week, which saw shares rise 3.3pc to $1.86, the price fell back 6pc to $1.76 on Thursday.

    AACo said that the rain in many of its key regions was ‘the best in 90 years’ and expected it would boost feed reserves for two years, while lowering the dependence on imported feed grain, which will it claimed would dramatically lower input costs.

    Slightly improved cattle prices were not factored into the AACo report, with the company saying that the mark to market value of the herd went up less than expected for the second half, in spite of a depreciating Australian dollar, taking the total year value to $12 million.

    But the company is confident the falling Australian dollar will make Australian beef exports more competitive, while it also forecasts that the fall in diesel prices will also be a marked benefit.

    Another positive was a 5pc increase in valuation of a sample of AACo properties.

    While there were declines in central and southern Queensland, the value of some of the more remote properties, in particular in the Barkly region in the Northern Territory and in the Queensland Gulf country, rose appreciably.

    Final AACo numbers are expected to be released to the market on February 10.

  • Indian Ocean currents drive drought

    “Our findings will help to improve seasonal rainfall forecasts and therefore directly benefit water and agricultural management,” Caroline Ummenhofer, the research team’s leader, said.

    National Farmers Federation (NFF) president David Crombie said farmers needed reliable weather forecasts to help them decide what to farm and when to farm it.

    “These findings, if verified and supported through scientific review, could be the missing piece in the puzzle for Australia’s farmers and their on-farm decision-making,” he said.

    The phenomenon discovered by the researchers, known as the Indian Ocean Dipole (IOD), has been in a positive or neutral phase since 1992 – the longest such period since records began in the late 19th century.

    According to the study, it indicates that El Nino events do not directly drive drought, as previously thought.

    “We needed to move away from historical comparisons of rainfall, to focus on accurate and reliable information on future weather patterns and events,” Mr Crombie said.

    The NFF called on the government to invest in the Bureau of Meteorology to make it a world leader in climate predictability and expand the computer models it relies on for seasonal and inter-seasonal forecasting.

    “This needs to be plugged into sophisticated and state-of-the-art computer predictive modelling that Australians farmers and everyone else can have confidence in,” Mr Crombie said.

    “Such a system would clearly have benefits for agriculture production and regional communities, which is a key driver to Australia’s economic prosperity.

    “However, it would also render vital assistance to water catchment authorities and suppliers who service the daily needs of metropolitan Australia.”

    The team, co-led by Professor Matthew England from the UNSW Climate Change Research Centre, has detailed its findings in a paper which has been accepted for publication in the journal Geophysical Review Letters.

    The team includes researchers from CSIRO Centre for Australian Weather and Climate Research and the University of Tasmania .

  • Stimulus package ignores climate chaos

    “There are inconsistencies galore in this package, with good ideas in one aspect being ignored in others. The Department of Climate Change was not properly consulted in the design, exposing Rudd’s supposed whole-of-Government approach as non-existent.

    “Building energy guzzling homes and school buildings now would only mean a new cash injection will be necessary a few years down the track to bring them up to scratch.

    “It is vitally important that new housing helps keep energy and transport bills down, instead of locking Australia’s poorest people into years of energy poverty and high transport costs.

    “It is ridiculous that the only cycleways that can be funded from this package are those directly connected to other projects such as more roads!

    “Experience from around the world shows that students in green schools learn better. This is a tremendous opportunity to give our students a better go as well as helping the environment and economy.”

    Yesterday, COAG agreed to mandate six star energy efficiency in all new homes by 2010. While this will leave Australia far behind much of Europe and America, it is a positive step. However, it could also lead to greater inequity if this package is left unamended.

    “How much sense does it make to build the kind of energy guzzling homes for Australia’s needy this year which will be against building regulations next year?

    “The Government should be using this package to put community housing ahead of the game in Australia, building the most energy and water efficient homes possible for those who can least afford to pay the bills,” Senator Milne concluded.

  • Regional stimulus bouys farmer’s hopes

    “If the Australian farm sector is to remain Australia’s economic anchor through the turbulent times ahead, the Government must ensure regional Australia looms large in its stimulus thinking,” NFF President David Crombie said.

    “The Government’s $950 tax-free bonus for all drought-affected farmers – reaching some 21,500 farmers in need – will be a much-needed fillip to families and regional economies.

    “Likewise, the regional infrastructure package – including regional schools’ share in the $14.7 billion maintenance and upgrade works (at $200,000 for each school), $500 million for regional development projects, $150 million to repair regional roads, and $90 million for black spot roads – will see a major revamp of country services and shore-up jobs in local communities.

    “Further, the $2.7 billion tax break for small businesses – amounting to a tax deduction on tangible depreciating assets over $1,000 for all farms with a turnover of less that $2 million per year, will be greatly appreciated by those small family-owned farms.

    “As for those farms with annual turnovers over $2 million, the tax deduction kicks-in at purchases over $10,000. This may be the incentive to tip the balance in favour of farmers continuing to invest in new equipment, which can help to keep the economy ticking over.

    “Obviously, the Government needed to act to spur spending and shore-up various sectors across the economy. But, equally, the Government is rightfully mindful of capital works projects to fill jobs now and, at the same time, generate long-term efficiency and productivity gains.

    “In this crisis, major infrastructure development can be a panacea for our immediate needs but also address the strategic imperative for economic growth.

    “When you throw in the worsening world food crisis – as the global population grows by 100 million people a year and there is less land and water for food production – it’s is a compelling case for the Federal Government to continue to invest in Australia’s agricultural capacity.

    “In other words, if you have the money to inject into the economy, make sure you invest in projects that will make a difference. That means making sure regional Australia is front-and-centre for those projects.

    “Right now, agricultural production is the only thing keeping the Australian economy out of the red. Australia’s most recent national account figures show agriculture (recording 14.9% growth) has been keeping the Australian economy from slipping into negative territory.

    “On top of that, over the last few months our farmers have employed an additional 19,000 people… taking our total direct employee figures to 315,000 Australians – and we have the capacity to employ more.

    “It is not widely known just how important agriculture is to the Australian economy. It’s only in the midst of an economic crisis that people appreciate our farm sector actually underpins 12% of GDP, 1.6 million Australian jobs throughout the economy and 20% of our national exports.

    “Today’s package, and its imperatives, complement the capacity building plan we laid out in our 2009 Federal Budget Submission.

    “Our fervent call has been for the Government to respond positively to the challenges of today with a plan for the future, and that the vital role Australian agriculture plays as the driver of national prosperity is recognised and given the jump-start needed to keep the economy moving.”

  • Wind powering ahead

    As RenewableEnergyWorld.com reported last week, the U.S. wind energy industry shattered all previous records in 2008 by installing 8358 MW of new generating capacity, according to the American Wind Energy Association (AWEA).

    Increasing total installed wind capacity by 50%, AWEA says the combined development channeled investment of some US $17 billion into the economy.

    The share of domestically manufactured wind turbine components has grown from under 30% in 2005 to about 50% in 2008 and manufacturers announced, added or expanded 70 new facilities in the past two years, including more 55 in 2008.

    However, warning of an uncertain outlook for 2009 due to the continuing financial crisis, AWEA noted that, towards the end of the year, financing for new projects and orders for turbine components slowed to a trickle and layoffs began to hit the wind turbine manufacturing sector.

    Nonetheless, with a total installed capacity of 25 GW installed, the U.S. has now officially overtaken Germany, with 24 GW of wind.

    Statistics released this week by the European Wind Energy Association (EWEA) show that 43% of all new electricity generating capacity built in the European Union last year was wind energy, more than all other technologies, including gas, coal and nuclear power.

    In 2008, a total of 19,651 MW of new generating capacity was installed across the economic bloc. Of this, 8484 MW was wind, 6932 MW of gas with a 35% share, 2495 MW of oil, a 13% share and 4%; 762 MW of coal.

    A total of 64,949 MW of wind capacity was operating in the EU by the end of 2008, 15% higher than in 2007 and a total of some 160,000 workers were employed directly and indirectly in the sector. Investments in the sector came in at about €11 billion in the EU as a whole in 2008.

    Germany has a narrow lead, with 1665 MW installed against Spain’s 1609 MW. In 2008 Italy added 1010 MW to reach a total of 3736 MW; France 950 MW to reach 3404 MW and the UK, 836 MW to reach 3241 MW. EWEA says that, overall, 2008 saw a much more balanced expansion led by France, the UK and Italy, part of a “second wave” of countries that are providing real momentum to the surge in wind energy. Together with the Netherlands, Portugal, Sweden and Ireland, ten EU Member States — over one-third — now have more than 1000 MW each. Austria and Greece follow close behind with 995 MW and 985 MW respectively. (View the charts below, which show the top 10 countries for installed capacity and for new capacity in 2008.)

    Furthermore, a distinct “third wave” became visible for the first time in 2008 as the new Member States had their strongest year ever, EWEA says. Hungary doubled its capacity to 127 MW and Bulgaria tripled its capacity from 57 MW to 158 MW. Poland, one of the fastest growing younger markets, now has 472 MW up from 276 MW. Outside the EU Member States, Turkey tripled its wind energy capacity from 147 MW to 433 MW.

    In terms of offshore wind energy, 357 MW of capacity was added in 2008, to reach a total of 1471 MW. Nearly 2.3% of total installed EU capacity is now offshore.

    Christian Kjaer, EWEA chief executive, observed: “The figures show that wind energy is the undisputed number one choice in Europe’s efforts to move towards clean, indigenous renewable power.”

    He added: “Wind energy is an example of an intelligent investment that puts EU citizens’ money to work in their own economies rather than transferring it to a handful of fuel-exporting nations.”

    With close to a third of all new capacity in 2008 installed in Asia, China also added about 6.3 GW, reaching a total of over 12 GW installed. China’s total capacity doubled for the fourth year in a row and in its response to the financial crisis, the Chinese government has identified the development of wind energy as one of the key economic growth areas.

    “These figures speak for themselves: there is huge and growing global demand for emissions-free wind power, which can be installed quickly, virtually everywhere in the world,” said Steve Sawyer, secretary general of Global Wind Energy Council (GWEC).

    “The 120 GW of global wind capacity in place at the end of 2008 will produce 260 TWh and save 158 million tonnes of CO2 every year,” he continued.

    GWEC’s chairman, Professor Arthouros Zervos said, “Wind power is often the most attractive option for new power generation in both economic terms and in terms of increasing energy security, not to mention the environmental and economic development benefits. The wind industry also creates many new jobs: over 400,000 people are now employed in this industry, and that number will be in the millions in the near future.”

  • Australia votes down global poverty move

    In some cases, the difference is enormous. A recent study of farming in Turkey, for example, found that farms of less than one hectare are twenty times as productive as farms of over ten hectares(3). Sen’s observation has been tested in India, Pakistan, Nepal, Malaysia, Thailand, Java, the Phillippines, Brazil, Colombia and Paraguay. It appears to hold almost everywhere.

    The finding would be surprising in any industry, as we have come to associate efficiency with scale. In farming, it seems particularly odd, because small producers are less likely to own machinery, less likely to have capital or access to credit, and less likely to know about the latest techniques.

    There’s a good deal of controversy about why this relationship exists. Some researchers argued that it was the result of a statistical artefact: fertile soils support higher populations than barren lands, so farm size could be a result of productivity, rather than the other way around. But further studies have shown that the inverse relationship holds across an area of fertile land. Moreover, it works even in countries like Brazil, where the biggest farmers have grabbed the best land(4).

    The most plausible explanation is that small farmers use more labour per hectare than big farmers(5). Their workforce largely consists of members of their own families, which means that labour costs are lower than on large farms (they don’t have to spend money recruiting or supervising workers), while the quality of the work is higher. With more labour, farmers can cultivate their land more intensively: they spend more time terracing and building irrigation systems; they sow again immediately after the harvest; they might grow several different crops in the same field.

    In the early days of the Green Revolution, this relationship seemed to go into reverse: the bigger farms, with access to credit, were able to invest in new varieties and boost their yields. But as the new varieties have spread to smaller farmers, the inverse relationship has reasserted itself(6). If governments are serious about feeding the world, they should be breaking up large landholdings, redistributing them to the poor and concentrating their research and their funding on supporting small farms.

    There are plenty of other reasons for defending small farmers in poor countries. The economic miracles in South Korea, Taiwan and Japan arose from their land reform programmes. Peasant farmers used the cash they made to build small businesses. The same thing seems to have happened in China, though it was delayed for 40 years by collectivisation and the Great Leap Backwards: the economic benefits of the redistribution that began in 1949 were not felt until the early 80s(7). Growth based on small farms tends to be more equitable than growth built around capital-intensive industries(8). Though their land is used intensively, the total ecological impact of smallholdings is lower. When small farms are bought up by big ones, the displaced workers move into new land to try to scratch out a living. I once followed evicted peasants from the Brazilian state of Maranhao 2000 miles across the Amazon to the land of the Yanomami Indians, then watched them rip it apart.

    But the prejudice against small farmers is unshakeable. It gives rise to the oddest insult in the English language: when you call someone a peasant, you are accusing them of being self-reliant and productive. Peasants are detested by capitalists and communists alike. Both have sought to seize their land, and have a powerful vested interest in demeaning and demonising them. In its profile of Turkey, the country whose small farmers are 20 times more productive than its large ones, the UN’s Food and Agriculture Organisation states that, as a result of small landholdings, “farm output … remains low.”(9) The OECD states that “stopping land fragmentation” in Turkey “and consolidating the highly fragmented land is indispensable for raising agricultural productivity.”(10) Neither body provides any supporting evidence. A rootless, half-starved labouring class suits capital very well.

    Like Mugabe, the donor countries and the big international bodies loudly demand that small farmers be supported, while quietly shafting them. Last week’s food summit agreed “to help farmers, particularly small-scale producers, increase production and integrate with local, regional, and international markets.”(11) But when, earlier this year, the International Assessment of Agricultural Knowledge proposed a means of doing just this, the US, Australia and Canada refused to endorse it as it offended big business(12), while the United Kingdom remains the only country that won’t reveal whether or not it supports the study(13).

    Big business is killing small farming. By extending intellectual property rights over every aspect of production; by developing plants which either won’t breed true or which don’t reproduce at all(14), it ensures that only those with access to capital can cultivate. As it captures both the wholesale and retail markets, it seeks to reduce its transaction costs by engaging only with major sellers. If you think that supermarkets are giving farmers in the UK a hard time, you should see what they are doing to growers in the poor world. As developing countries sweep away street markets and hawkers’ stalls and replace them with superstores and glossy malls, the most productive farmers lose their customers and are forced to sell up. The rich nations support this process by demanding access for their companies. Their agricultural subsidies still help their own, large farmers to compete unfairly with the small producers of the poor world.

    This leads to an interesting conclusion. For many years, well-meaning liberals have supported the fair trade movement because of the benefits it delivers directly to the people it buys from. But the structure of the global food market is changing so rapidly that fair trade is now becoming one of the few means by which small farmers in poor nations might survive. A shift from small to large farms will cause a major decline in global production, just as food supplies become tight. Fair trade might now be necessary not only as a means of redistributing income, but also to feed the world.