Is Morrison the man who killed the Aussie summer?

This is the summer from hell. I can’t imagine anyone is enjoying their break – not with the quadruple whammy of drought, heatwaves, bushfires and smoke haze we’re experiencing. If it happens again next summer – or the one after – as it very well could, can you imagine the political doghouse Scott Morrison and his Coalition parties will be in?

Morrison is already bearing most of the ire of people displaced by the fires. So much so that he’s learned not to show up to offer his commiserations. But is it really his fault? No. Just one of the six prime ministers we’ve had over the past two decades can hardly take all the blame.

In any case, Morrison is right to protest that nothing Australia could have done by itself could have stopped the deterioration in climate we’re seeing. The only solution is global, so all the big, rich economies – particularly the Americans, less so the Europeans – must share the blame for the continuing rise in average temperatures.

And even the biggest developing economies – China and India, particularly – could have done more to reduce the intensity of their emissions (emissions per dollar of GDP) without abandoning their efforts to raise their living standards to some higher fraction of those we have long enjoyed.

But Morrison doesn’t escape the responsibility of leadership as easily as that. For one thing, it’s his side of politics that’s done most to sabotage the limited and belated efforts Australia has made, since the defeat of the Howard government, to contribute to the global effort to reduce greenhouse gas emissions.

And you have to go back to John Howard’s refusal to ratify the Kyoto agreement of 1997 to find an instance of Australia actively disrupting efforts to reach international agreement on stronger action, to match the shamefully destructive contribution Angus Taylor made at the conference in Madrid last month by insisting that Australia be allowed to use an accounting trick to shirk its responsibilities.

For any Australian leader to claim, hand-on-heart, to have done all they reasonably could to reduce global warming, they have to be able to say they committed us to a disproportionate reduction in our emissions, so as to have the moral authority to press the bigger players to do more. None of our leaders can say that, least of all Howard and Morrison.

And then there’s the law of politics that says if it's fair enough for the government of the day to claim the credit when things go well – even when the seeds of that success were sown by an earlier administration – it’s equally fair for the government of the day to cop the blame when the neglect of earlier administrations finally hits the fan, as it has this summer.

Not Morrison nor any of his predecessors can honestly claim to have been caught unawares by what’s happening before our eyes and noses. The CSIRO has been warning for at least a decade of just this concurrence of adverse and costly events – in lives and health, as well as property – as the planet warms.

At last year’s election, the climate change deniers demanded to be told the economic cost of stepping up our contribution to reducing global warming. The more sensible among us should have been demanding to be told the economic cost of allowing global warming to roll on. We’re finding that out as we speak, but doing so the hard way.

It’s tempting to wonder whether, in his heart of hearts, Morrison is himself a climate-change denier. But that hardly matters. These days, what politicians truly believe doesn’t have much bearing on what they do and say. Conviction politics is dead. These days, politicians seek out the position that, while sitting easily with their heartland supporters, is likely to give them the greatest short-term advantage over their political opponents.

Whatever he believes, Morrison is too cagey to come out as a denier. Like Malcolm Turnbull before him, he’s bound hand-and-foot by the deniers in his own party and the Nationals. So, until now, his safest position has been to say he accepts the science, while falsely claiming to be comfortably on target to reach the (inadequate) emissions reduction we committed to in the Paris agreement.

There are two approaches to the “wicked” problem of global warming: mitigation (reducing emissions) and adaptation (changing in response to whatever warming we get). The greenies have seen these as in conflict and frowned on efforts to adapt. But Morrison and his predecessors have been so bound up by their deniers that they haven’t wanted to talk about even such issues as getting set to cope with much worse bushfire seasons. No excuses for that, Scott.

Read more >>

Insincere, misguided displays of concern make the drought worse

Sometimes I think our politics has got into a vicious circle: the worse our politicians behave, the more of us give up and tune out. But the less we monitor their behaviour, the worse and more lackadaisical the politicians become.

Take the drought. Good politicians would see it as a recurring problem and try to find substantive ways of helping farmers cope with droughts in general; weak politicians settle for giving the impression of being very busy caring and helping – especially when the TV cameras are rolling – while they kick the problem down a country track.

Scott Morrison and his ministers keep announcing (or re-announcing) new measures to help, but the experts – including the National Farmers' Federation - keep lamenting that we don’t have a National Drought Policy and haven’t had one for years. We just keep knee-jerking and ad hocking every time another drought comes along.

So what would a decent national drought policy look like? It would start by reverting to an understanding the Hawke-Keating government established years ago, but has since been blurred: droughts aren’t a “natural disaster” in the way floods, cyclones and bushfires are. For a start, those others are sudden and short-lived, whereas droughts develop gradually, spread over huge areas and can last for years.

As Dorothea Mackellar realised more than a century ago, if you want to be an Australian, regular droughts are part of the deal. Always have been but, thanks to the two C-words we’re not supposed to say, are now likely to become more severe and more frequent. The day may come when not being in drought is the exception.

According to former top econocrat Dr Mike Keating, “the possibility of recurring droughts must therefore be planned for and not just treated as bad luck, for which farmers themselves bear no responsibility”.

The national drought policy of 1992 required farmers to be more self-reliant and absorb the impact of droughts as something to be expected. Many, many farmers have long been doing just that. Some haven’t bothered and they’re the ones getting most care and concern from fly-by-night journalists and politicians.

Everyone wants to “help those poor farmers”, but how should governments do it? John Freebairn, an economics professor at the University of Melbourne, says you can divide government drought support into three categories: subsidies for farm businesses, income supplements for low-income farm families, and support for better decision-making.

His message is that the main thing we should be doing is supporting programs to help farmers better manage the risk of drought and make their farms sustainable. Such support needs to come mainly between droughts – precisely when media and political interest in the topic evaporates.

Although income supplements for drought-stricken farmers raise questions about why they should get help other small-business people don’t, they’re a much more effective way of alleviating poverty than subsidising farmers’ loans, freight and fodder – which is just what federal and state politicians (and volunteer organisations) have been heaping on this time as the ad hockery has mounted.

As Professor Bruce Chapman, of the Australian National University, said this week, “the politics of drought is not only about helping farmers, [it’s] about showing the world – including city dwellers – that the government cares. It does that by giving money away and having lots of announcements.”

But here’s the less-obvious truth recognised by a considered drought policy: the too-ready availability of drought assistance helps create droughts.

How? By reducing “the risks associated with a bad year, and thus encouraging over-cropping and over-grazing. If farmers know that their mistakes will be bailed out, then they have an additional incentive to maintain their herds even when the risk of not having enough feed is quite high. They anticipate that the taxpayer will bail them out if it doesn’t rain, and that they will be able to buy in the additional (subsidised) fodder when they might need it,” Keating says.

Now get this: according to Lin Crase, an economics professor at the University of South Australia, “there is mounting evidence that farm businesses can actually benefit from drought in the longer term. This seems to occur because businesses that go through a drought develop coping strategies that, when invoked in good years, produce much greater profits.”

This doesn’t mean droughts are a good thing, of course, but it does mean that shielding farm businesses from drought runs the risk that they won’t adapt, Crase says. Changing climate suggests that a lot more adaptation – including bigger, more mechanised farms and many more farmers leaving the land – lies ahead.

Sensible drought policy long ago recognised that more dams don’t help, which is why so few have been built in recent decades. That politicians are popping up with plans for new dams is another sign they’re making it up as they go.

John Kerin, a minister for primary industry in the Hawke government, says that while you can fill new dams when you’ve eventually built them, “you can’t keep them full waiting for a drought, or empty waiting for a flood”. Increased stored water will be used to increase irrigation. And increased irrigation in a time of climate change means greater shortages of water in the next drought.

The expertise to respond to drought more sensibly is there. It’s just that our politicians find it easier pretending to fix the problem.

Read more >>

Sidney Kidman: how to make a buck out of a terrible climate

You may not have heard of Sir Sidney Kidman, once known as Australia’s Cattle King. He died in 1935. But when it comes to using “innovation” to get rich, he was tops – certainly, the most amazing. And he’s about to become our patron saint of climate change adaptation.

He chose to farm in the most arid, unpredictable and unforgiving part of Australia, and he made his pile. His company, S. Kidman & Co, exists to this day, and in 2016 was acquired by Hancock Prospecting, owned by Gina Rinehart, with Shanghai CRED as junior partner.

There are two ways to respond to climate change. Plan A is mitigation: do things to stop it happening. Plan B is adaptation: learn to live with a much hotter world where, apart from the rising sea level, extreme weather events are more frequent and bigger.

Since we’re making such a hash of Plan A – not just us, but the world in general – it may not be long before we have no choice but to get on with Plan B. Innovation – finding new ways to do things – will be king and Kidman will be recognised as the forerunner he was.

As any climate-change denier will tell you, there’s nothing new about drought. These days, all our good farmers have learnt that, though you can never tell when, another drought is always coming, so you have to be ready for it.

But Kidman was on quite another level: he found a way to make money out of drought. Dr Leo Dobes, an economist from the Crawford School of Public Policy at the Australian National University, has written a paper attempting to uncover the secret of what Kidman would never have called his “business model”.

From the turn of the previous century, Kidman, born in modest circumstances, built up a collection of cattle properties in the most marginal country in Australia’s Dead Heart – the area around the Simpson Desert, to the north of Lake Eyre – and in the “corner country” where the borders of the Northern Territory, Queensland, South Australia and NSW meet.

In this arid core of Australia, rain was very irregular and occurred mainly through thunderstorms after very hot weather. Kidman said his South Australian properties generally got less than 100 to 200 millimetres a year.

Kidman was always buying and selling properties, ending up with properties extending across the whole continent.

There was an underlying rationale to his acquisitions, however. He had several breeding properties in the north, including Newcastle Waters in the NT and Augustus Downs and Fiery Downs in Queensland, which had a tropical climate with a short rainy season.

Further north in the Gulf country, the summer rainfall seasons were more prolonged, and Kidman also used his properties there to source cattle for southern markets. Properties in the Channel country of south-western Queensland, where the grasses where softer, were used to fatten cattle for market.

A second characteristic of his holdings was the concentration of adjoining properties, running from west of the Darling River to the SA border, along the Diamantina and Georgina rivers and Cooper’s Creek in the Channel country, and along the stock route to the west of Lake Eyre via Charlotte Waters to Marree and Farina. This amounted to two major chains of properties.

“Because the holdings were on, or in close proximity to, major stock routes (and associated watercourses), they afforded easy access to rail heads connected to southern markets” in Sydney, Melbourne and Adelaide, Dobes says.

So, what was the business model that allowed Kidman to succeed where so many others failed? You can see signs of a supply-chain model – a vertically integrated business, from properties that bred cattle, to fattening properties and final sale in capital city markets.

Also signs of spatial diversification. Lack of rain or feed on one property could be compensated by moving cattle to a property with sufficient feed.

“Kidman’s drovers were shifting, shifting, shifting all the time. There was no such thing as starving or dying stock on Kidman’s stations. They just shifted them.”

But Dobes sees Kidman’s business model as captured by his creation of three “real options”. In financial markets, buying an “option” gives you the right, but not the obligation, to buy (or, in other cases, sell) a parcel of shares at a set price at a specified date in the future. It’s a way of trying to protect yourself from uncertain future developments.

In Kidman’s case, however, the options weren’t financial, they were real – physical. Kidman could easily move his stock to better conditions because his properties were adjacent and because he kept those properties understocked. The opportunity cost of understocking was the price of the option.

Second, because his properties followed stock routes and waterways, Kidman could move his stock towards better conditions – and towards the market – in a way that gave his cattle priority over other people’s herds on the route. Again, understocking was the price of this option.

Third, Kidman’s practice of holding properties near rail heads, plus his maintenance of a network of drovers, camel drivers, Aborigines, dingo trappers and friendly telegraph operators, who provided information about the movement of competing herds being driven to various markets, allowed him to direct his cattle to the city market where prices were likely to be highest.

Kidman’s modern relevance is not just in overcoming a harsh and unpredictable climate, but in coping with unexpected changes – in his case, rabbit infestation, erosion, the rapid spread of cattle ticks in northern Australia and the results of overstocking by earlier pastoralists.

Kidman’s “real options” were innovative ways of coping with, reducing and even profiting from uncertainty – which Dobes concludes is the hallmark of climate change. Australia’s farmers and others can adapt to climate change by finding their own real options.

Read more >>

Drought: a choice between sympathy or lasting help

What a good thing elections are. Were it not for the looming federal election – not forgetting those in Victoria and NSW – we city slickers might by now have forgotten the drought that continues to damage much of eastern Australia. Collections taken, donations given, end of.

Not so our tireless Prime Minister. Scott Morrison’s put the drought at the top of his to-do list of problems to be sorted before the election. And having fixed high electricity prices earlier in the week, on Friday he held a national drought summit, announcing a $5 billion Drought Future Fund.

From July 2020, the fund will provide grants worth up to $100 million a year for community services and research, and to assist the adoption of technology to support long-term sustainability in periods of drought.

Details yet to be decided. What it amounts to is anybody’s guess. It could be something that really would improve our farmers’ resilience to future droughts, or it could be just another slush fund for spending in National Party electorates.

The thing about droughts is that when the media eventually find out about them and start making a fuss, there’s an outpouring of concern and everyone wants to help. Individuals reach for their purse; governments want to be seen taking charge and doing the right thing by our poor stricken farmers, the salt of the earth (to quote a red-headed prince).

It’s always assumed that farmers have been hit by some unpredictable natural disaster beyond their control, the worst in years. They’ve all been hit hard, and so are desperately in need of our sympathy and support.

The trouble with this familiar, feel-good ritual is that it isn’t true. There’s nothing more predictable than that this drought will soon enough be followed by another, and one after that.

What’s more, though the Nats deny its existence, climate change means droughts are becoming more frequent and more severe, thanks to higher average temperatures – up about 1 degree since 1950 – and higher rates of evaporation.

It is possible for farmers to prepare for drought. And the truth is, most – yes, most – farmers have prepared, and as a consequence aren’t doing as badly as some. In their efforts to whip up our sympathy, the media give us an exaggerated impression of the drought’s severity, showing us the least-prepared farms rather than the best.

This matters because, as two economists from the Australian Bureau of Agricultural and Resource Economics and Sciences have written recently, “in our rush to help, we need to make sure well-meaning responses don’t do more harm than good”.

“Drought support could undermine farmer preparedness for future droughts and longer-term adaptation to climate change,” they say.

They argue that, to remain internationally competitive, our farmers need to increase their productivity, both by adopting improved technologies and management practices, and by shifting resources towards the most productive activities and the most efficient (that is, bigger) farmers.

“Supporting drought-affected farms has the potential to slow both these processes, weakening productivity growth,” they say.

Professor John Freebairn, of the University of Melbourne, notes that government drought assistance usually falls into three categories: income support for low-income farm families, subsidies for farm businesses and support for better decision-making.

The existing policy of making the equivalent of means-tested dole payments available to farmers is justified on social grounds.

But farm subsidies on loans, freight and fodder – all of which we’ve seen this time – can have unintended side effects. “Knowing that subsidies will be provided during drought . . . reduces the incentives for some farmers to adopt appropriate drought preparation and mitigation strategies,” Freebairn says.

By contrast, providing meteorological information on seasonal conditions, or hands-on education and support to individual farmers in developing more appropriate decision-making strategies, actually makes farming more robust and self-sufficient.

Suspending justified scepticism, at its best Morrison’s proposed drought future fund could go a step further and finance water infrastructure and drought resilience projects.

So, what can farmers do to make their farms more resilient to drought? Professor David Lindenmayer and Michelle Young, of the Fenner school of environment and society at the Australian National University, have plenty of ideas.

They say a key approach is to invest in improving the condition of natural assets on farms, such as shelter belts (tree lanes planted alongside paddocks), patches of remnant vegetation, farm dams and watercourses.

This increases the land’s resilience to drought, with collateral benefit to the health and wellbeing of farmers.

“When done well, active land management can help slow down or even reverse land degradation, improve biodiversity, and increase profitability,” they say.

Restored riverbank vegetation can improve dry matter production in nearby paddocks, leading to greater milk production in dairy herds and boosting farm income by up to 5 per cent.

Shelter belts can lower wind speeds and wind chill, boosting pasture production for livestock by up to 8 per cent, at the same time as providing habitat for animals and birds.

Their work with farmers in NSW who invested in their natural assets before or during the Millennium drought suggests these farmers are faring better in the present drought, they say.

“The need to invest in maintaining and improving our vegetation, water and soil has never been more apparent than it is now. We have a chance to determine the long-term future of much of Australia’s agricultural land.”

Read more >>

Our concern about the drought isn’t fair dinkum

It’s taken him too long, but public concern and the looming election have finally obliged Malcolm Turnbull to do the right thing by our farmers struggling with severe drought.

In Forbes on Sunday, Turnbull announced a further $250 million in assistance to farmers and communities, including initial grants of $1 million each to 60 drought-affected councils in NSW, Queensland and Victoria, bringing Canberra’s direct handouts to $826 million.

Add a further $1 billion in concessional loans and the total outlay comes to $1.8 billion.

Well, about time.

Is that what you think? I don’t.

I think most of it will be a waste of taxpayers’ money. You’ve heard of being cruel to be kind, but the way we carry on every time there’s a drought is being kind to be cruel. Our sympathy, donations and taxpayer assistance just prolong the agony of farmers unable or unwilling to face the harsh reality of farming in a country with one of the most variable climates in the world.

We may not be able to predict their timing or their length, but we can be certain that, before too long, this drought will be followed by another. And the scientists tell us climate change is making it worse.

And yet we keep pretending no one could have predicted or prepared for the next drought. Nonsense.

Our attitude to drought is all soft heart and soft head. I have two objections. The first is the way our collective concern about drought and its consequences is always media-driven.

When I visited the country in mid-May, my host complained that no one in the city seemed to know or care about the drought that was ravaging the countryside.

But when, a few months later, the first media outlet got the message, it started the usual flood of heart-rending drought stories.

The media love drought stories because they know how much they stir their customers’ emotions. Most people like having the media give their heart-strings a regular workout. I don’t.

And the trouble is, our concern about the drought – or the tsunami or earthquake or bushfire – lasts only as long as it takes the media’s attention to shift to some newer source of concern.

It’s already happening. Turnbull’s big announcement in Forbes got little media coverage because the threat to his leadership was far more exciting.

My more substantial objection to the recurring carry-on about drought is that it makes the problem worse rather than better. We give the bush a fish to feed it for a day when we should be helping it learn better fishing techniques.

In their efforts to tug our emotions, the media invariably leave us with an exaggerated impression of the severity of the drought and the proportion of farmers who are suffering badly. They show us the very worst farms and the worst-off farmers.

To be blunt, they show us the bad managers, not the good ones. I can’t remember ever seeing a story where someone whose farm was in much better shape than his neighbours’ was asked how he did it.

The exception that proves the rule? Don’t be so sure. On average over the six years to 2007-08 – the Millennium drought – nearly 70 per cent of Australia’s broadacre and dairy farms in drought-declared areas managed without government assistance.

Many, maybe most, farmers prepare for drought. Some don’t. They’re the ones the media want us to feel sorry for. The ones who’ve overstocked their now badly degraded properties hoping it will rain before long or, failing that, the government and guilt-ridden city-slickers will give them a handout.

The trouble with our emergency assistance approach to drought is that it encourages farmers not to bother preparing for the inevitable. It encourages farmers whose farms are too small, or who lack the skills or spare capital to survive, to keep struggling on when they should give up.

And it does all that to the chagrin of the wise and careful farmers who’ve made expensive preparation for the next drought with little help from other taxpayers.

Australians have been leaving the farm and moving to the city for more than a century. They’ve done so because continuous advances in labour-saving technology have made small farms uneconomic and decimated the demand for rural labour. All while the nation’s agricultural production keeps growing.

This is my own family’s story. I was raised mainly in cities, but my father grew up on a dairy farm near Toowoomba and my mother on a cane farm in North Queensland.

Meaning that, were it not for my brush with economics, I too would share the city-slickers’ sense of guilt at having deserted the true Australian’s post on the land for a cushy life in the city. Would $50 be enough, do you think?

We are perpetrators of what Americans have dubbed the “hydro-illogical cycle”. As Dr Jacki Schirmer and others at the University of Canberra describe it, this occurs when “a severe drought triggers short-term concern and assistance, followed by a return to apathy and complacency once the rains return.

“When drought drops off the public and media radar, communities are often left with little or no support to invest in preparing for the next inevitable drought.”

Every government report on drought concludes the best response is for farmers to improve their self-reliance, preparedness and climate-change management. We could help them with their preparations, but we get a bigger emotional kick from giving them handouts when droughts are at their worst.

Read more >>