Do Farmers Deserve Bailouts?

The dry weather around the country has been impacting the races. I read in the latest issue of Truth that fewer runners have been entered into the gallops over the past few weeks because of the hard tracks due to little or no rain around the country.

When there are fewer horses entered in a race, it’s a hell of a lot less interesting to watch. Turnover at the TAB will be lower and the racing industry will suffer because less turnover at the TAB means less money circulating around owners, trainers, bloodstock agents and jockeys. The old days of rugby, racing and beer are definitely in the past.

So it’s a good laugh to read farmers complaining about the drought. Now, drought really sucks for farmers, but that’s the nature of the business they are in. They run the risk of the weather ruining their livelihood and reducing their families to penury.

But does the government really need to do anything more than emergency food assistance? I don’t think so. Farmers have been on a hiding to nothing for a long time. Farming for capital gains has been the most rewarding activity in the agricultural sector. The myth of value-added agriculture hasn’t panned out and agriculture is a small percentage of GDP.

The problem with farming is that we never get a detailed drill down of how farmers manage their finances. How many are carrying insurance? How many have used high commodity prices to pay down debt and move towards a “no cash, no purchases” mentality? How many operate without overdrafts?

If farmers can’t manage when the going gets tough, their “business” needs to go through and be put into liquidation. There is nothing special about family farms, agriculture or droughts. The farming industry already gets a lot of support behind the scenes including special treatment from Inland Revenue – giving them more won’t encourage them to stand on their own two feet while farming for capital gains the taxpayer will not receive anything from.

Farmers don’t deserve bailouts anymore than South Canterbury Finance investors or coal miners on the West Coast. But we are living in Bailout Nation, and if a bailout can be arranged for your special interest group it is hardly surprising that The Most Privileged Special Interest Union In New Zealand is leading the charge.