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Australian farmers hit hard after years of drought

Australian farmers are reeling from years of drought. Philippa Hall met some of those worst hit and saw how they are slowly rebuilding their businesses.

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The rain in Australia’s central west region of Queensland has been very fickle recently.


The area has been drought declared for four years but when the rain does come it is pot luck where it lands.


You could get an inch at your homestead, but 2-3km where you want the pasture for your herd you will get nothing.


Take the recent rainfall. One grazier saw more than half his annual rainfall in that time.


Another, 100km away had about 10 per cent of his average.

 

’Wonderful’


“It was wonderful,” said Mac McClymont at Dalkeith Station, north west of Longreach.


“It mostly fell at night. It was great to lie in a warm bed listening to the rain on the tin roof.”


What Mr McClymont heard was the largest one-day rainfall at his farm for over two years – 32mm fell in one night.


His 30,000-hectare (74,000 acres) grazing business is running at a loss with just 10 per cent of his normal stocking rate currently on his land. The family have been in a dry slump since 2002 and this is the worst they have seen it in four generations.


“You do expect some dry times - this has just gone on a little too long. It is more than we are used to coping with.

 

Dry


“It is not unusual to have one or two dry years in five but to have 12 dry years in 14 is a big ask.


“The grasses here have been severely degraded by the length of this drought and will take a couple of good years to bulk up again.


“We probably will not be looking for more stock until early summer and then only if we get the rain. We would need another couple of inches in the next few weeks to keep the herbage going until early spring, then similar falls through spring and summer.”


The family have had no choice but to survive using off-farm income.


Mr McClymont does aircraft maintenance, his son Paul fences and carries out cattle work away from the drought area, and his daughter-in-law Joy runs a successful digital fitness training business.


“You have still got to pay the rates, electricity, insurance, fuel, and there is maintenance and repairs. Even without stock it costs $100,000 (about £50,000) to keep going.”


June’s rain is totally unseasonal. In Longreach, the town hardest hit by the state’s most widespread drought on record, it rains in the summer not the winter. Or at least it is meant to.


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Selling cattle and waiting for rain was the only option for farm business

For James Walker, the mid-year downpour smashed all totals on record. They have had more rainfall this year than in the past three years put together.


“The rain was incredible,” said Mr Walker.


“We can show the children nature flourishing and blooming and not dying and wilting during the drought.”


His two-year-old son has never seen cattle on their farm. The family made the decision to de-stock at the end of 2012 selling 22,000 sheep and 8,000 beef cattle.


“It is like facing three years of no food on the shelves if you have got a corner shop,” he said.


“I suppose it is distressing that this infrastructure is going to waste, that the paddocks aren’t being used and I’m not doing the roll I intended when I took up farming.


“But I am upbeat. You will never find opportunities if you are distressed and you are just looking at debt. I am busier now than I was in the past.”

 

Diversified


Mr Walker has diversified into tourism and is looking at a 30-hectare (74 acres) solar farm. He is also running his initiative Agrihive, which aims to find solutions to global issues in farming.


After a UK summit in November last year on the dairy crisis, a competition was run in relation to a fictional case study. The three winners were given flights to the outback and hosted by Mr Walker for 10 days.


They were also given a fictional £5m to invest in dairy in the UK or beef in Australia.


Stuart Nicholls, an agri-business consultant from Savills, was surprised Australian farmers like James decide to sell all their livestock for a period.


“I had not comprehended a farming system that completely destocked, it is a concept that is completely new to the UK,” he said.


“While we do not have the extremes of weather to the extent of the drought in QLD there are situations in the UK where a similar model could be used.”

 

Business


The idea of a periodic business in agriculture is discussed by Professor John Cole, executive director of Resilient Regions at the University of Southern Queensland.


“There is nothing constant about farming other than the farmer’s aspiration to produce,” he said.


“Markets are not constant, climates are not constant, all the operating conditions of this business are variable but for the farmer.”


His suggestion was to ‘make hay while the sun shines’ and be intensely profitable during that time.


He thinks it is a model which suits intergenerational businesses well.


“Periodic sounds very short-term. If fact it is the opposite. It is actually saying we need a business that is diverse enough, that might have different types of cash flows, part tourism, part investment, part farming, that gives the family a basis.


“The model is simply reflecting the nature of cycles. Business is not the same every day of the year, every year of the decade.”

Change of mindset to optimise productivity

Australia imported the British concept of farming: seven days a week, 365 days a year. However, due to the drought many farmers down under have been forced to acknowledge their industry does not follow that format.


The aim of a periodic business is to optimise productivity in three or four years out of 10 making sure there is a means for rapid retreat in the downtime.


To do this Prof Cole thinks farmers need to change their mind-set, away from what he names ‘cognitive dissidence’.


“It is like a smoker who knows he has got to give up,” he said.


“They know what it is doing but they keep rationalising doing the same thing they have always done. It is a way of dealing with uncomfortable truths. We have got to put that to one side.”


When he talks to graziers in western Queensland about resilient business he points out that building relationships beyond the farm is vital, as is being aware of the changing world around you.


Prof Cole added: “This notion that it is all mine, that I can only do it by myself, this is one of the other notions we need to knock on the head. You’ve got to share in the up side too.”

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