Earlier this year, 9NEWS released an article saying “Farmers claim they’re getting paid less, but food it costing more.” How true is this?
Prices of fresh produce on the shelves have caused a shock amongst shoppers, but have you ever wondered about the struggles faced by our hardworking farmers who are harvesting the produce?
According to the Australian Department of Agriculture, Fisheries and Forestries, inflation has skyrocketed to an alarming 4.9% year-on-year. Farmers are finding it increasingly difficult to cope with rising resource costs while their incomes remain stagnant.
Inflation, the persistent rise in the prices of goods and services, affects all sectors of the economy, but its impact on farmers is particularly pronounced. Farmers, who are the backbone of any nation, are currently grappling with the challenges posed by this economic phenomenon.
Impact on Food Security
When farmers struggle, the entire nation’s food security is at risk. With increasing inflation, many farmers are forced to cut back on production, which can lead to food shortages and price spikes, impacting consumers’ budgets and nutrition. It becomes a vicious cycle that affects both the rural and urban populations.
“”A key challenge for the agriculture sector is to feed an increasing global population, while at the same time reducing the environmental impact and preserving natural resources for future generations.” Says the OECD.
Roy Morgan reports that over a quarter of farmers surveyed feel that inflation is their largest feat and have felt the effects of it immensely – this phenomenon being triggered by issues such as natural disasters and labour shortages which leave farmers struggling to buy resources to manage their assets, grow crops, and raise livestock.
“It must be noted that inflation in goods and services can increase the cost of farm inputs, potentially squeezing margins unless revenue growth fully compensates such extra costs. Upward cost pressures on labour would also be expected in an inflationary cycle.” reports Warrakirri Asset Managment.
Governments often play a pivotal role in assisting farmers during times of economic hardship. However, they, too, are constrained by inflation as it reduces their financial flexibility. Additionally, the Australian Labour Government has admitted to “not having a plan” to resolve the current living crisis at large, let alone focus on how to boost the agricultural sector.
As the cost of subsidies and support programs increases, it can become a challenge for governments to allocate sufficient funds to adequately support their farming communities. The OECD reports that, “Australia has virtually the lowest level of farm subsidies, second only to New Zealand.” Although the population of Australian farmers have received access to a handful of government grants over the past year – is this enough to keep farmers afloat?
Addressing the issue of farmers struggling with inflation requires a multi-faceted approach. This includes implementing policies that help control inflation itself, providing financial and technical support to farmers, and encouraging sustainable agricultural practices. Initiatives that promote price stability, improve infrastructure, and expand access to credit can help alleviate the burden on farmers.
The impact of inflation on farmers is undeniable and far-reaching. It affects every aspect of their lives, from the costs of production, labour, to their overall economic well-being. As we look to the future, it is crucial for governments, policymakers, and society as a whole to recognise the challenges faced by farmers and work towards sustainable solutions that can ensure food security and the prosperity of those who feed our societies.
How can Farmdeck help?
By vigilantly overseeing your farm’s resources and consumption, you have the potential to significantly reduce expenses, conserve precious energy, and free up valuable time. From meticulously tracking your livestock, water, and energy usage to optimise your cropping practices and beyond, Farmdeck provides the comprehensive solution you need to make informed decisions.
Reach out to our team today and discover how Farmdeck is leading the charge in mitigating the effects of inflation in agriculture, ensuring your farm’s sustainability and success in the ever-changing economic landscape.