Citizens Electoral Council of Australia

Media Release Tuesday, 11 July 2017

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

Save Australia’s family farms and food security: a comprehensive solution to the rural credit crisis

The Citizens Electoral Council has laid out the solution to the rural credit crisis in its submission to the Senate Select Committee on Lending to Primary Production Customers: “To solve the credit crisis that threatens Australia’s primary producers and national food security, enact a moratorium on farm foreclosures, parity pricing, a national bank and Glass-Steagall.” The submission is published in the 21 June Australian Alert Service.

The plight of primary producers in Australia, especially family farmers, threatens the nation’s food security. In the last four decades the number of farms has fallen from 200,000 to fewer than 40,000, while farm debt has soared from $1 billion in 1969 to more than $65 billion today. Farmers accept they have to strive with the elements, but increasingly they are also at the mercy of: commodity and currency markets that are easily gamed by big international speculators; the Coles-Woolworths duopoly; and bloody-minded banks that are starving regional businesses and industries of credit in order to plough more and more credit into the Sydney-Melbourne property bubble.

In recent years the banks have foreclosed on hundreds of family farms across Australia, often through underhanded and predatory methods. It is a national crisis, as a nation’s food security is underpinned by strong family farms. Unlike corporate agribusinesses, family farmers are committed to producing for the local market, to investment in their regions, and to land management.

The CEC’s submission spells out a four-part solution:

A moratorium on farm foreclosures: the government propped up the banks during the 2008 global financial crisis; it must stop those banks from forcing farmers off their land, to allow time for a reorganisation of farm finances.
A national bank, or other dedicated public credit institution for rural lending: the government should establish a public credit institution to direct long-term credit into agriculture, either a dedicated one, such as the Clean Energy Finance Corporation for financing so-called renewable energy, or a national bank that can direct public credit into all industries, for which the CEC has already drafted legislation—the Commonwealth National Credit Bank bill.
Parity pricing for agriculture: the government should ensure that the price farmers receive for their agricultural commodities covers the cost of production, by implementing a system of parity pricing similar to that employed in the USA during and immediately after WWII, which underpinned the era known as the “golden age” of US agriculture.
A Glass-Steagall separation of normal banking from speculation: separating commercial banks from investment banking and other financial services would stop the banks from gambling with deposits, which would protect the banking system from collapse, but it would also increase the credit available for productive lending to the farms and small businesses in the real economy.

Australia cannot afford to keep losing productive industries. It is time to junk economic ideology, namely the neoliberal deregulation and free-market policies that have sent productive industries to the wall, and implement solutions that are in the national interest. To guarantee food security, the nation must prioritise primary production, by providing the infrastructure and credit that fosters the productivity of family farms.

Click here for a free copy of the CEC’s full submission to the Select Committee on Lending to Primary Production Customers, including appendices.

Click here to join the CEC as a member.

Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.