By Chris Spindler
"It seems incredible that in supposedly the most efficient farming sector in the world, people are starving on their own property. In a number of centres there are already breakfast programs starting so that children will be fed", says Peter Docking.
Docking is spokesperson of the South East Action Group, an organisation formed in South Australia earlier this year to help farmers stay on the land. The group sees a big part of the rural crisis as the fault of the banks.
Like industry and the labour market, the rural sector is being "restructured". It's claimed that Australian farming will leave behind the "old-
fashioned" role of supplying domestic consumers and become part of an export industry integrated into global markets.
But the question has to be asked: restructuring and transformation for whom? Currently the answer is: for agribusiness. The upgrading of farming techniques and value adding processes has not benefited those on the land but has been used to squeeze out the small and family farmers.
The individual and social costs of this are drastic. Environment and land protection, control of your own land and farming techniques and assistance for those wanting to stay on the land seem to have become redundant.
Living with debt is nothing new for the farming community. But the banks seem to have trapped farmers into a cycle of debt from which escape is impossible. It often ends in eviction and the resale of the farmers' property, leaving them and their families with nothing.
The problem is widespread. Some estimates are that as many as 50% of the country's farmers could face eviction in the next 12 months.
There was fierce competition in the money market throughout the 1980s. Financial institutions were falling over each other to lend. Money, to upgrade machinery or buy land, was abundant — but only on the banks' terms.
The banks insisted on floating interest rates. Farmers, accustomed to building in a fixed interest rate they knew they could repay, were cajoled into accepting floating rates with the claim that these rates would fall in the near future. Of course they didn't.
When farmers came back to the banks to adjust their loans after the interest rate had increased, they were told their loan was now "insecure" and so could not be adjusted. Not only that but a 2-6% charge was added for the loan now being insecure.
So farmers who had reasonably expected to be able to pay the interest charges and some of the principle found themselves owing more than when they took out the loan.
Interest rates for some went up to as high as 34% through the late '80s and early '90s. Even now there are rates as high as 18% on money that the banks borrow at 5.1% on the international money market.
As the debt becomes unmanageable, banks cut off the farmers' cheque book. The farmers stop paying interest charges and get taken to court — or in some cases kill themselves. Some 1500 farmers have taken their own lives in the past year.
However, farmers don't necessarily turn the guns on themselves. In the United States 28 bankers have been shot by angry farmers.
There is a rural counselling service. However, half the counsellors come from the government and half from the banks. In general these counsellors convince farmers to get off the land. The government currently offers $40,000 for a new start for farmers leaving the land.
"The one stated aim of the South East Action Group", says Peter Docking, "is that no-one
should leave the land unless they want to. We aim to help farmers through the legal process and only use blockades as a last resort.
"We ask that farmers who are having difficulties come and talk to us first before signing anything else with the banks. Then they can take our advice or not. But we haven't lost a case yet."
The group also understands the need for allies. "We would like to see the rural action movement expand to include not only those who live in the country. There would be nothing better than to see 20 or 30 farmers turn up to defend someone who is getting evicted from their house in the city and then 20 or 30 people from the city turn up at a farm property."