1. Agriculture in Australia
European settlement 200 years ago
Settlers took up huge tracts of land free of charge.
Wealthy individuals from Europe set up huge enterprises producing wool and meat for export.
Later settlers took up land in more remote areas where rainfall was poor.
Over the years, governments have encouraged individuals to develop agriculture all over the country.

2. Contents Support for development Banking in the rural sector
Environmental issues

3. Encouraging development
Land given free if it is developed
Low interest loans to assist
Soldier and civilian settlement schemes
Taxation advantages

4. Government-sponsored irrigation schemes
Snowy River Scheme, NSW
Ord River Scheme, WA
Various other smaller schemes

5. Other assistance schemes
Government-assisted marketing schemes
Drought assistance
Crisis assistance

6. Problems in Australian agriculture
Harsh, unreliable climates
Fluctuating prices
Dependence on international markets
Declining prices and rising costs
The original settlers in the most remote areas generally failed after one or two generations.
The remote areas became huge cattle stations with minimal potential or capital investment.
Up until the 1960s, agriculture was seen as a stable and growing industry.
Since the 1960s, the relative position of agriculture in the economy has declined.
It has declined mainly because of the dependence on international trade. Australia must compete with the exports of subsidised competitors.
Costs have risen at faster rate than prices. Various strategies have been implemented to maintain the industry’s position.

7. Ongoing assistance Government advisory services
Government-directed bank lending
Management training
Assistance in marketing world-wide

8. Strategies to assist Greater output per worker
Replacing human workers with machinery
bigger tractors
bigger farms
Better use of technology
fertilizers
breeding
mechanical innovation
20,000 sheep per man
300+ dairy cows per farm

9. Wool price support scheme
Attempted to maintain wool price
Eventually became counter productive

10. Tree pull schemes Removing surplus orchards when over-supplied
Often cause shortage and increased plantings later

11. Rationalisation of irrigation water
Transferring water rights from farm to farm
Better drainage of irrigation areas
Laser levelling for more economical use
Raising the price of irrigation water

12. Advice and training Government-sponsored advisers
Government-assisted training schemes

13. Traditional areas of assistance by banks
Property purchase
Property development
Stock and plant
Working capital

14. Potential problems Fluctuating prices Unreliable seasons
Natural disasters
pests
floods
fires
droughts
Given the situation with the above,
it has been necessary for banks to observe conservative lending policies to avoid making the farmer’s problem worse in the long term.

15. Erosion Wind erosion in heavily cropped areas
Water erosion in heavily grazed areas

16. General rules that apply
Debt servicing as a percentage of income: 20%
Debt as a percentage of total assets: 30%
Where the industry is more reliable or the product sold at a contract price, the lending margins can be raised slightly:
Dairying - regular income
Meat, poultry - contract prices
If these rules are applied, the Bank has the capacity to carry the farmer through a few years of poor prices or seasons without risking a loss.

17. Salination Caused by excessive and poorly managed irrigation
Water tables are rising and land is being lost

18. Water pollution Excessive use of fertilizers
Chemicals gaining access to waterways
Effluent from dairy farms, pig farms and feedlots

19. Animal welfare Stock management practices Transport Slaughter
Export of live animals

20. Conservation of native flora
Clearing and replanting of native bush and forests

21. Greenhouse emission targets
Reduction in diesel usage
transport
cultivation
Replanting of forests

22. Current situation Single operator farm Capital value $1,000,000
Annual gross income $100,000
One-worker farm
Capital value $1,000,000
Annual gross income $100,000
Operating costs $50,000 50%
Living costs $20,000 20%
Farm improvement/investing $10,000 10%
Debt servicing *%) $20,000 20%
$100,000