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Agriculture

Australia ignoring the solution to government-induced malaise

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7 minute read

Australian PM Chris Bowen

From the Frontier Centre for Public Policy

By Alan Moran

Conscious of the imperative of self-preservation, European governments and the EU Commission itself have already taken baby steps to dilute and delay carbon emission-abating and economy-crushing agricultural and energy policies.. Not so in Australia

Studying last month’s Davos meeting of the world’s (largely self-appointed) elites, Walter Russell Mead sees an inflection point.

He says that when they listened to Argentinian President Milei promoting free market capitalism, the Davosies’ applause was more than polite clapping. There was a sense that all was not well in the supposed government-planned China, and a recognition that the more hands-on EU governmental approach has resulted in Europe slipping behind the US with its lighter government touch over the economy. This was coupled with a concern that the farmer revolts around Europe reflected a sudden rejection of trust in the establishment. Above all, Ukraine has made the Euro grandees ‘uncomfortably aware of how dependent the global system is on the leadership that only a prosperous and self-confident America can provide’.

Conscious of the imperative of self-preservation, European governments and the EU Commission itself have already taken baby steps to dilute and delay carbon emission-abating and economy-crushing agricultural and energy policies.

Not so in Australia, where governments remain totally focused on reducing the economy’s productive potential.

The Albanese government, under the Svengali and serial ministerial failure of Chris Bowen, has turbocharged carbon abatement programs crippling energy. It has:

  • Vastly increased direct and regulatory-enforced expansion of the transmission lines in an attempt to allow wind and solar to work.
  • Introduced a requirement for the top 215 businesses to reduce their emission levels by 30 per cent over and above reductions made necessary by the subsidies generally.
  • Put in place measures to combat objections to intrusive wind farms and transmission lines.
  • Refused to introduce requirements for the rectification of land and safe disposal of the materials used in wind and solar facilities.
  • Vastly expanded the budgetary assistance to wind, solar, and hydrogen.
  • Introduced costly requirements on firms to identify the emissions of their own activities and of those of their suppliers and customers.

The measures have been put in place by politicians, hardly any of whom have any knowledge of the energy sector, how it works, and what its costs are. Politicians have been pressed in this direction by the so-called experts, a professional elite supported by and bankrolled by subsidy-seekers, who see the global warming con as a means by which they can get paid for promoting particular forms of energy.

But the outcome is already apparent in the loss of competitiveness of our industries. The bellwether is smelting and all three of the major aluminium smelters are now in hospital care, relying on government support to offset the imposts they incur from government penalties on cheap electricity. The distress is also seen in agricultural and mining industries, which in addition to being buffeted by ever-increasing environmental costs, with their prices set globally, are seeing their margins come under pressure.

Every week brings another measure – last week we saw requirements on car retailers to ensure more fuel-efficient – higher cost cars are sold with penalties on sellers that fail to meet these requirements, penalties that will certainly increase the price Australians pay for motor vehicles.

This week, Environment Minister Tanya Plibersek boasted of spending $205 million of taxpayers’ money to buy back another 44 gigalitres of water from Murray irrigators. This is part of a process to divert 2,700 gigalitres per annum (out of 7,000 gigalitres ‘high security’ water available) from productive agriculture to uses designated as ‘environmental’. These measures massively reduce the productivity of the Murray-Darling region, responsible for 35 per cent of the nation’s farm income. They were originally justified to respond to environmental agitators’ spurious claims that irrigation was creating salt infusions, claims that were reinforced during the ‘millennial’ drought of 1997-2008 by specious assertions that climate change would drastically reduce the available water. These original rationales having been disproven, politicians’ and activists’ hostility to productive enterprise have lent the programs an ongoing inertia.

We also saw a new $100 billion a year in additional carbon tax floated by Ross Garnaut and Rod Sims; their study’s funding source was not revealed but the beneficiaries would likely be, in my opinion, subsidy-seeking economy wreckers. While ostensibly rejecting that proposal, the Prime Minister has foreshadowed extensive new decarbonisation spending programs. Nothing is being learned from the collapse of Australia’s nickel mining industry, which cannot compete with overseas mines favoured by the low-cost coal-generated electricity that Australian governments are closing down.

In addition to the current $10 billion a year in subsidies through regulations forcing the use of wind and solar, and billions of dollars spent on revoking the productive use of irrigation water, governments provide huge sums to groups that promote such waste. Unlike squandering through inefficiency that is endemic in government programs, all this spending is aimed at poisoning once highly competitive low-cost industries. Adding to measures that load the dice against employers in workplace relations, it is akin to government forcing the nation to manufacture bombs to be dropped on the people financing them.

Has anybody put the solution more succinctly than Trump-aligned Presidential hopeful, Vivek Ramaswamy? His answer was, ‘Drill. Frack. Merit over “Diversity, Equity, and Inclusion”. Stop paying people to stay at home instead of work. Fire bureaucrats. Shut down corrupt agencies. End lobbying.’

Alan Moran is a noted economist who has analysed and written extensively from a free market perspective focusing on environmental issues, housing, network industries, and energy markets. First published here.

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Agriculture

It’s time to end supply management

Published on

From the Frontier Centre for Public Policy

By Ian Madsen

Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.

The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.

The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.

Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.

An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.

A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).

One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.

Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.

Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).

Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.

It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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Agriculture

Grain farmers warn Canadians that retaliatory tariffs against Trump, US will cause food prices to soar

Published on

From LifeSiteNews

By Anthony Murdoch

 

One of Canada’s prominent agricultural advocacy groups warned that should the federal Liberal government impose counter-tariffs on the United States, it could make growing food more expensive and would be a nightmare for Canadian farmers and consumers.

According to Grain Growers of Canada (GGC) executive director Kyle Larkin, the cost of phosphate fertilizer, which Canada does not make, would shoot up should the Mark Carney Liberal government enact counter-tariffs to U.S. President Donald Trump’s.

Larkin said recently that there is no “domestic phosphate production here (in Canada), so we rely on imports, and the United States is our major supplier.”

“A 25% tariff on phosphate fertilizer definitely would have an impact on grain farmers,” he added.

According to Statistics Canada, from 2018 to 2023, Canada imported about 4.12 million tonnes of fertilizer from the United States. This amount included 1.46 million tonnes of monoammonium phosphates (MAP) as well as 92,027 tonnes of diammonium phosphate (DAP).

Also imported were 937,000 tonnes of urea, 310,158 tonnes of ammonium nitrate, and 518,232 tonnes of needed fertilizers that have both nitrogen and phosphorus.

According to Larkin, although most farmers have purchased their fertilizer for 2025, they would be in for a rough 2026 should the 25 percent tariffs on Canadian exports by the U.S. still stand.

Larkin noted how Canadian farmers are already facing “sky-high input costs and increased government regulations and taxation.”

He said the potential “tariff on fertilizer is a massive concern.”

Trump has routinely cited Canada’s lack of action on drug trafficking and border security as the main reasons for his punishing tariffs.

About three weeks ago, Trump announced he was giving Mexico and Canada a 30-day reprieve on 25 percent export tariffs for goods covered by the United States-Mexico-Canada Agreement (USMCA) on free trade.

However, Ontario Premier Doug Ford, despite the reprieve from Trump, later threatened to impose a 25 percent electricity surcharge on three American states. Ford, however, quickly stopped his planned electricity surcharge after Trump threatened a sharp increase on Canadian steel and aluminum in response to his threats.

As it stands, Canada has in place a 25 percent counter tariff on some $30 billion of U.S. goods.

It is not yet clear how new Prime Minister Mark Carney will respond to Trump’s tariffs. However, he may announce something after he calls the next election, which he is expected to do March 23.

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