Debt, sustainability and diversification

A recent article in the North Queensland Register (Get big or get out – 6 December, sourced online) said that “Australian cattle producers are on their knees, burdened by unsustainable debt.”  In the Northern Territory “about 15 major stations have been on the market more than a year.”

“Some say business is so bad you can pick up a cattle station for literally nothing more than the cattle grazing on it.”

The high dollar and reduced exports and cash flow combined with increasing costs has hurt the industry. “Cattle prices are still sitting where they were 20 years ago but all the costs have gone up.”

The situation has resulted in property values crashing from their “sky high prices” prior to the GFC. “The real impact is largely limited to the producers who actually expanded during that (pre-GFC) period.” Now it’s a stalemate as buyers wait for values to drop further and/or the market to gain confidence before coming in to pick up a bargain. 

I spoke to a pastoralist last week who said that he would like to improve land condition, but can’t due to debt levels. He said the costs of production were way too high.

So it’s no wonder that pastoralists are interested in engaging in new research into enterprise diversification: “Biodiversity for profit” is funded by the National Environmental Research Program- Northern Australia Hub.  The research explores the financial rewards and contract conditions preferred by pastoralists to diversify income and management to provide better outcomes for biodiversity. Could the willingness to negotiate flexible, adaptive or conditional agreements to invest in the management of key landscapes be a way of retaining both production and biodiversity values?

Ralph Shannon, Chairman of the North Australia Beef Research Council, highlights the strategic importance of the research for the beef industry. This “will support producer’s efforts to represent their practices as appropriate and relevant to those who are concerned about them. Broad community recognition of the role of producers and the value of the job they do to the broader society might well flow from this work.” To contribute to the research, contact Romy Greiner: romy.greiner@cdu.edu.au; mb 0418 242 156.