Grim harvest for Drought laden Australian farmers*

by Staff Writers
Grenfell, Australia (AFP) Dec 13, 2007

Ask Stephen Lander what is helping Australian farmers survive the worst
drought in living memory and he smiles before revealing the secret: "An
understanding bank manager."

"You will find that 80 to 90 percent of farmers are all living on
borrowed money," he explains at the hot and dusty property he has worked
for decades in the baking dry central west of New South Wales.

As the worst drought in a century grips much of the country, the
nation's 130,000 farmers are bearing the brunt of the impact as their
hopes for an income again die as their crops fail.

"There's a lot of emotion," says the National Farmers Association's
Geoff Knight. "These people haven't had an income for two years."

Lander said it has been seven years since farmers in the region -- who
have battled frost, locusts and plant disease as well as the drought --
have made a good living from wheat.

"It's been very difficult the last few years, there's no two ways about
it," he said. "I've never seen two years like this in a row."

Lander has given up hope of selling any grain this year other than what
has been baled for fodder but he wants to harvest enough seed for
replanting.

"We will be down 90 percent on our wheat income," he said.

"A little bit of our stuff we've got for hay but at this stage won't
cover the costs of production so we're still gambling whether we will
get any income out of it."

It's a cruel outcome for farmers who just months ago were hopeful of a
bumper crop on the back of good autumn rains during a time of high
commodity prices.

In June, rain fell on much of the thirsty country, turning some farms
along the east coast from drought to flood zones within hours.

"We were optimistic in July as was most of eastern Australia," says
Lander's son, Duncan.

"We had a good start to the cropping season, grain prices were
progressing, everything was looking in the right direction. And then it
all stopped.

"We were probably losing about 50,000 dollars a week by mid-August.

"By mid-September we knew the game was up because we had been six weeks
without rain."

Wheat is a hardy plant. But without essential follow-up rains the crops
were devastated. The country's official forecaster has now slashed the
year's wheat production from the 22.5 million tonnes projected in June
to 12.7 million tonnes.

In a further blow to farmers, the optimistic start to the season meant
many sold their projected wheat crops on the futures market for the
security of a fixed price.

When the crops failed, they were left without the means to pay back the
advance. To make matters worse, they have to repay it based on the
current wheat price, which has skyrocketed given global shortages.

"There are blokes that owe a million bucks and they've got no crops,"
Duncan Lander said.

Grain and merino farmer Paul Rout will not say how much he has to repay
for forward marketing his wheat crop, but said he had been encouraged by
the low commodity prices of 2005 to accept the deal.

"To know that you've got these good prices and just to miss out like
that -- it's a bitter blow," he said from his 3,000 acre (1,214 hectare)
farm near Grenfell.

"It's certainly one of those things that you can think about it and it
could start to eat away at you.

"I was talking to a guy not long ago, he had had sleepless nights for
weeks thinking about these contracts he had to wash out of. I can
imagine some people, it would really occupy their thinking all the time."

Local shire councillor Graham Falconer, who lobbies government on behalf
of farmers, said depression was an issue in rural communities which are
struggling under the weight of enduring drought.

"There's a lot of emotional problems," he said.

"Farmers are a pretty tough lot but it's basic depression and it's not
just depression in farmers, it's depression in the community."

He says the drought has forced people out of country towns and into
cities, discouraged young people from becoming farmers and begun to
erode the social fabric of small, rural communities.

"It's a very difficult time," he said. "It's very, very disappointing to
see that most of the crops here have failed.

"No one alive today would know of anything worse than the past five or
six years.