What’s happening to the Australian Dairy Industry

I just recorded a radio interview for ABC Toowoomba on the dairy farmers’ campaign against supermarkets selling milk for $1. Here are my notes for the discussion

Consumer prices have increased 20 per cent since 2010, when the milk price was $1.30/litre, so to maintain the real price, the current price would have to be around $1.56.

Dairy producers in Australia have been under continuous pressure to increase herd size and reduce costs, with those unable to do so having to leave the industry or accept declining incomes. I first researched this topic in the early 1980s, when farm numbers had already fallen by about 50 per cent.

Since 1979, the number of dairy farms in Australia has fallen from 22 000 t0  5700. In Queensland the number has gone from 3000 to less than 400.

However, because of increased herd size the number of cows hasn’t changed much . Milk output per cow increased rapidly up to about 2000, so total production grew over that period before stabilising

The “cost-price squeeze” affects most agricultural producers but the problems of dairy farmers are exacerbated by the market power of supermarkets and their use of milk as a “loss leader”.  The decision to raise the price charged to consumers represents at least a symbolic step away from that practice.

Reciprocating Hanson’s boycott (reposted from 2017)

I posted this in 2017. Not many people agreed with me, but I think my positiion has been justified by events. Hanson and One Nation have no legitimate place in public life.

Apparently, Pauline Hanson and One Nation are refusing to vote for any government legislation until the government intervenes on the side of canegrowers in a dispute with millers and marketers*

Coincidentally, I was considering the question of how to deal with Hanson’s presence in the Senate and came up with the opposite way of implementing the current situation. The major parties should refuse Hanson’s support, and should show this by having four Senators abstain on any bill where One Nation supports their side. Obviously, this isn’t going to happen with the LNP. However rude they may be about Hanson and other ONP members when they say something particularly appalling, ONP is effectively part of the coalition and is being treated as such.

But for Labor, I think the case for shunning One Nation is strong. The arguments for a complete rejection of One Nation’s racism are obvious. The costs would be

(i) In votes where Xenophon went with the LNP and Hanson with Labor and the Greens, this would turn a win into a loss (I think – can someone check)

(ii) Open hostility to One Nation would probably shift some ONP voters to change their second preferences

I don’t think either of these points have a lot of weight. But the self-styled Labor “hardheads” whose brilliant moves have included putting Family First into Parliament and abolishing optional preferential voting in Queensland, just when would help Labor most, will doubtless disagree.

* These disputes have been going on for decades, reflecting the fact that, because sugarcane is costly to transport, growers are very limited in their choice of mills, and millers similarly depend on a relatively small number of growers to keep them in business.. I haven’t looked into the merits of this one

The case for higher wages

I’m a signatory of a public letter on the benefits of stronger wage growth this morning, organized by the Centre for Future Work. In support of the letter, I said

For decades, government policy has been designed to weaken unions and push wages down. It’s time to put that process into reverse.

A list of all the signers is at this web site: https://www.futurework.org.au/wages_open_letter. That site also contains a media release that was distributed to reporters this morning, and additional quotations in support

Media coverage of the letter includes:

An article by Stephen Long at ABC: and

An article by Amy Remeikis in the Guardian:

The editors of the AFR mentioned the letter in the course of an editorial reaffirming the virtues of trickledown economics:

And AFR columnist Richard Denniss also mentioned the letter in his column.

You can also look at the Twitter feed for @CntrFutureWork (eg.https://twitter.com/CntrFutureWork/status/1107776026367520769),

Ultra low wage growth isn’t accidental. It is the intended outcome of government policies (updated)

That’s the headline for my latest piece in The Conversation, my contribution to a three-part series mini-symposium on Wages, Unemployment and Underemployment presented by The Conversation and the Academy of the Social Sciences in Australia.

Key quote

For more than forty years, both the architecture of labour market regulation and the discretionary choices of governments have been designed with the precise objective of holding wages down. These policies have been highly successful.

Update: Paul Krugman has a recent piece in the New York Times, also making the point that technological progress isn’t responsible for the falling wage share.

Closed borders

Reversing its position for the second time in about a week, the Morrison government has refused entry to Milo Yiannopoulos, known, among other things, as a promoter of “ironic” Nazi trolling of the kind practised by the Christchurch murderer, whose actions he implicitly endorsed, describing the victims as practising a “barbaric and evil “religion.

This isn’t a free speech issue: Yiannopoulos’ repulsive statements are still freely published here, and there has been no attempt to suppress them. If he were in Britain (his home country), the thorny question of “no-platforming” would arise.

Since he wants to come to Australia, however, the issue is simply one of freedom of movement. Yiannopoulos is a supporter of closing borders to large groups of people of whom he and his political allies disapprove. It seems entirely fair that this policy should be applied to him and others like him, before being considered more generally.

We should extend the ban on Yiannopoulos and apply it to any foreigner belonging to an organization or social media group that wants to close borders on the grounds that particular religious and ethnic groups are undesirable, present risks of terrorism and so forth. It’s grimly obvious that Yiannopoulos and his fellow racists are just such an undesirable and potentially dangerous group.


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