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Farmers feel financial pressure

Posted on September 17, 2008, 3:03pm

About 250 South East family farmers are clients of the SA Rural Financial Counselling Service, 7pc more than last year.

On the back of drought farmers are struggling against the doubling of fertiliser and fuel costs, high interest rates and an ever increasing raft of government levies, fees, licences, charges and council rates.

Increased costs are on the back of low stock prices and a drought created grain shortage.

While recent rain has brought some relief, throughout the region the soil profile is dry, bores continue to dry up and many internal drains and swamps remain dry.

Rural Financial Counselling Service general manager Kay Matthias said South East farmers were also carrying the highest debt levels in the State.

During 2005 and 2006 graziers borrowed heavily to feed starving stock while grain producers saw their crops perish.

“It will take years to recover from that — they are financially and emotionally stressed,” Ms Matthias said.

“It doesn’t matter what farming sector you were in, everyone was affected by drought – there was no feed it was just horrendous.

“A lot of farmers are saying now: ‘We just can’t do this anymore’

“We (financial counsellors Charlie Goode and Alice Kempe) do a financial analysis of their business – whether its drought related, whether its management practices or whether the farm is no longer viable.

“Then we put together an option plan for clients and work with them for the best option they choose.”

Ms Matthias said throughout the state farmers were opting to leave the industry.

“We have drought centres throughout the State and Struan House is one of those, even though it is not actually called a drought centre – it’s a one stop shop,” she said.

In the past 99.9pc of clients were seen privately by a financial counsellor on their farm.

“But the drought has broken down a lot of those barriers and the next door neighbour is in exactly the same position,” Ms Matthias said.

“I was doing a radio interview the other day and somebody said ‘but it’s so green and lush.

“Well it might be green and lush at the moment, but it’s going to take a lot of green lush years to get people in front again.

“Drought has had a huge impact on the farming industry.”

SA Farmers Federation regional president Bill Hunt said farmers north of Naracoorte were “sitting on a knife edge”.

“For example at Bordertown we’ve only had 200mm or eight inches of rain,” Mr Hunt said.

“The crops look green but the root structure isn’t very well developed.

“If we get a tough spring, I think this year has all the potential to fold up in quite a spectacular fashion.”

Mr Hunt said there was no margin for error for any South East farmers.

“Since last year the cost of fertiliser has doubled, the cost of diesel has doubled and all our input costs have gone through the roof,” he said.

“There had been a few land sales in the autumn.

“Since then there’s been land on the market, but people have found it very difficult to get rid of.

“I think that’s an indicator that people by and large are feeling the pressure.”

CHRIS OLDFIELD

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