TIME: Almanac 1993/TIME Almanac 1993.iso/time/011491/0114004.000

Text File | 1992-08-28 | 5.5 KB | 120 lines

                                                                                WORLD, Page 27

AUSTRALIA

Slaughter Down Under


A nation that relies on the land for its vital exports staggers
in the face of one of the century's worst agricultural slumps

By JAMES WALSH -- Reported by John Dunn/Melbourne


    Across the rolling countryside, the normal peace of rural
life is shattered by volleys of gunfire. Under the hot summer
sun of the Southern Hemisphere, sheep farmers are carrying out
one of the largest animal slaughters in history. Some families
drive off in tears after delivering their gentle charges to the
killing pens where, next to mass burial pits, firing squads
will dispose of 20 million sheep over the next year.

    The death sentence was decreed as an emergency measure to
rescue a vital export industry by curtailing wool production.
During the past 18 months, Australia's prime overseas customers
have cut back on purchases, leaving a glut of fleeces.
Moreover, wheat farmers expect to see their incomes halved this
year, and home-grown citrus sales have also soured. At a time
when much of Australia is taking to beaches and playgrounds,
the dreaming high summer of the Lucky Country's interior has
turned into a nightmare.

    For an economy that relies on products of the land for
export earnings, the rural crisis is especially painful. Former
Prime Minister Malcolm Fraser, now retired to his sheep and
cattle ranch in the state of Victoria, warns that the slump
could be the worst since the Great Depression 60 years ago.
According to the New South Wales Farmers Association, its
members are selling out and leaving the land at the rate of one
every two hours. Says Daryl Reading of Gowrie: "It makes you
mad. We're good at what we do, but we still can't make a
living."

    Such protests came to a head last week, when 60,000 farmers
wearing broad-brimmed bush hats converged on Melbourne to
dramatize their hardships. Coming from specks on the map like
Yackandandah and Koo-wee-rup, they marched along leading
sheepdogs or, in two cases, mounted on camels. AUSTRALIA FOR
SHEEP, NOT POLITICAL GOATS proclaimed one placard. Rally leader
Danny Johnson from Warracknabeal drew cheers when he shouted,
"The heart has been ripped out of country Australia by high
interest rates and excessive government taxes."

    But more neutral observers wonder whether Prime Minister Bob
Hawke's Labor Party government in Canberra is the villain or
the scapegoat. Agriculture is a notoriously boom-and-bust
business. If any single factor is to blame, it is probably
Australia's dodgy trading position in a rapidly industrializing
part of the world.

    Economically, a nation that once prided itself on a way of
life superior to its neighbors' now stands in relation to Asia,
particularly Japan, as a colony to a mother country. It imports
money and equipment and sends back minerals and farm products.
Welfare-state labor costs also stifle competition with
hard-driving Asian exporters in manufactured goods.

    Australian salesmanship in Asia has brought in healthy
profits, but commodity prices remain subject to mercurial
swings. Two years ago, when wool was fetching a high world
price of $4.81 per lb., sheep men delighted in their earnings
bonanza and stepped up production. They could not have foreseen
that China, a big customer, would drop out of the market in the
wake of Beijing's Tiananmen Square upheaval, when Western
credits were cut off. Nor could they have predicted that the
financially strapped Soviets would cancel orders and stop
paying bills.

    For years the wool growers have been sheltered by a
cartel-like mechanism that only helped skew the market. The
Australian Wool Corporation, a quasi-official body, bought all
unsold stocks at a guaranteed price. When natural fibers became
the fashion rage of the late 1980s, the AWC lifted the price
by 71%, to $3.35 per lb., which encouraged farmers to swell
their flocks. So dominant was Australia in the fine-wool market
that its minimum price kept the stuff expensive amid
overproduction and shrinking demand. One result has been a turn
by Japan to improved synthetic fibers, which are smoother and
more lightweight than their forerunners.

    The slaughter campaign aims to reduce flocks to a more
commercially manageable 150 million, though for Australians it
has the dimensions of tragedy. Historically, the country rode
to prosperity on the back of this biblical creature that
typically can produce enough wool for four men's suits in a
year.

    But the sheep men's miseries are not the countryside's only
plight. Thanks to bumper harvests around the world, wheat
farmers face their lowest returns in more than half a century,
and the international embargo on exports to Iraq has also
eliminated Australia's second-biggest customer. Aggravating the
crisis is cutthroat grain dumping by the U.S. and the European
Community; both unload surplus wheat overseas at subsidized
prices.

    As for citrus, the bruiser has been import liberalization.
In 1988 Canberra relaxed tariffs on a variety of products,
enabling Brazilian oranges to capture 20% of the domestic
market. Australia's 167,000 farmers protested that such imports
were heavily subsidized by foreign governments. But Canberra
remains committed to free trade in an effort to make the
country more competitive. Whether market-oriented policies will
rescue the countryside is the big gamble: a question, as the
doomed sheep might attest, of killing some agriculture in order
to save it.