Joe is a grazier running merino sheep on land in the Cooma-Monaro region of NSW Australia. He has endured a run of bad years. Poor and erratic rains, an ongoing weed problem from unpalatable grasses that reduce available forage, and livestock constantly vulnerable to flystrike, are an unholy interlinked trinity of challenges.
The sheep graze paddocks that have been in the family for generations. The practical problems have been with the business for a while too, forcing Joe to take steps to resolve them. Pastures have been improved, livestock regularly agisted, and time and money spent on weed control. These actions have helped but they have created another problem of debt. Borrowing from the bank to take actions for improvements to future yield have put great strain on the finances, pushing the debt to equity ratio to its highest level in the history of the property. Weak cash flow from the run of poor years has not helped.
It is also worth mentioning that Joe is 62 years of age, only a little older than the average for farm owners in the district, and whilst still physically fit and strong has glanced more than once at retirement.
What will happen to this man, his business and the land that he manages over the next decade?
No one will know for sure until it happens. But we can think up some scenarios and propositions and even assign some likelihood of their occurrence.
Under business-as-usual the most likely outcome is more of the same — a struggle to realise enough output to service the debt.
It would take a run of several above average rainfall years to help nature push out the weed problem and generate wool and lamb for market. An even longer run of good years would be needed to redress the debt imbalance. There is a chance of course, even under an increasingly fickle, warmer and drier climate that is predicted by most regional climate models. Below average years would likely see the business run into deeper financial trouble.
Knowing that good rains are needed is not much help to Joe. Not even modern forecasting can provide confident predictions of good or bad rainfall years, so he is left with little more than a punt on which side of average the rains will be.
This is not a simple decision. No one wants to play risk games with their livelihood or the family legacy only here, both are inseparable. Joe can provide for his family and retain his heritage if he keeps going and it rains. If the poor years continue then sooner or later the bank will step in and foreclose.
The tension is palpable putting a huge strain on mind and body. Joe is nugget tough and about as durable. He continues, of course, ignoring the realities of likelihoods and financial instruments. Nothing worth fighting for was ever easy.
But here is what Joe is fighting against.
Joe is tough and tenacious. He has and always will accept that farming is hard in a land of drought and flooding rains. There is little point in complaining and even less in giving up.
When Joe’s grandfather was in his prime the good years were very good. Not every year of course and you couldn’t predict in advance what would come tumbling out of the sky, but there was always enough in the system to scurry through the poor years.
Joe was born in 1955 and by the time he was old enough to notice, the bumper years were a thing of legend. There were good seasons of course, only never quite the boon they once were. The poor years were deeper and seemed to last longer. The decade of big hair, shoulder pads, and ABBA was especially difficult.
When Joe’s father died unexpectedly in 1989 Joe inherited the property and the responsibility. At his father’s side, Joe had crisscrossed the paddocks for over 20 years, learned much, and seen what needed to be done.
Clearly, the land was only good for sheep. Nothing else would make sense unless there was a deep pocket handy to invest in serious improvements to the land. There were tweaks of course with fertilizer, sowing pasture species, a little lime and some smart spelling of the most sensitive paddocks. For nearly three decades Joe did them all as time and money allowed.
Occasionally there was a good year, even a run of above average ones. There was a drought around the millennium that eventually broke. And all the time there was no obvious pattern. Nothing Joe did seemed to really turn things around or even hint that good years were coming, but it didn’t really get worse. There was no detectable trend amongst the year to year noise in the time since Joe’s father passed.
Treading water was survival at least and it toughened Joe’s resolve. He dug deep and kept spraying the weeds.
What happens next is a prediction of biomass on Joe’s paddocks under possible future climate and business-as-usual sheep production. It is not looking good. By the 2020’s production will be less than half of the decadal average Joe’s grandfather knew with fewer good years peaking at less than a third of those heady days.
Joe does not believe this projection at all.
His lifetime on these paddocks has been hard but the farm is still in the family. It still produces. It has been tough but production is not getting worse. There is no logical reason to believe that a turnaround in the weather can’t see the good times return. He has taken care to pass the skills, experience and sense of responsibility for the sheep and the land to his eldest daughter who is far more capable than his only son who became a banker. Nature may be fickle but it can be conquered.
Fair enough. Projections are abstractions after all. Knowing how the grass will grow is in really in the lap of the gods. No one has enough evidence to validate a future downturn.
Except there is an unseen trend happening on Joe’s paddocks. It is the real problem that Joe, and especially his daughter, face.
Joe is leaning against the side of his utility parked on a small hill in his easternmost paddock. His daughter Juliette is there too, staring across the property into the horizon with a slightly furrowed brow.
Their argument over what to do about the latest demand from the bank is hushed by the view across to the setting sun.
Rearing livestock in these parts challenges the toughest, most tenacious of producers. It takes skill, experience, and attention to detail that soon sorts out those that can from those that, well, might not.
Only there is a problem that no amount of capability can overcome. It contributes to the volatile grass growth, enables weeds, and affects the health and wellbeing of the whole property.
The soil is in decline.
Over the years Joe’s family property has been steadily losing soil organic carbon.
Since Joe took over from his father in 1989 each hectare of land has lost 0.5 tonnes of vital organic material. Now, as father and daughter stare across their paddocks, roughly 4% of the mid-80’s level has gone. The steady outflow of carbon runs counter to the year to year bounce in biomass to show a trend that a school kid could detect.
The current soil carbon levels of 9.6 tC ha-1 are 13% less than those in grandfather’s time of bumper years. It represents a level of loss that is consistent with what the boffins know about the complex interactions between soil, grass, grazing and the weather in production systems. Get the balance wrong for the soil type you’re on and, well, it’s complicated.
Joe has heard all this before. He readily admits that soil needs carbon and no self-respecting farmer would not want to lose any. All country folk know that the dark, organic smell wafting off soil rubbed between the fingers is a good thing. He is baffled by this trend.
Pulling off his hat and swatting the air Joe stands upright letting the ute alone and takes to his haunches. Innate scepticism for anything in a white coat kicks in hard. His soil feels the same, looks the same, and, as it has always done, varies from paddock to paddock and patch to patch. Sheepishly the boffins admit that this trend is indeed hard to measure on the ground. At an educated guess, some 600 carefully placed soil samples taken in the 1940’s and again today would be needed to statistically verify the 1.5tC ha-1 loss through direct measurement. The model is the only way to see the trend.
So what’s with this loss? Joe sees a line on a graph that can’t be verified on his land and calls bull. It’s a trend, maybe. And so what? A ton of carbon in ten cannot mean anything too serious. It is not as if the soil is blowing across the ditch to New Zealand.
Juliette nods in agreement. Then in the smart way that some brains process information asks the key question, “So, can we reverse the trend?”
Fast-forward to the end of 2018 after the second GFC has bitten everyone. This time Australia has felt it too, for even the Chinese have lost their appetite for resources.
But this is not the half of it for Joe, whose farm has volatile production and declining soil quality, breeding justified scepticism over the future.
At his farm gate is a new land cruiser. Three burly blokes in inappropriate city attire hover just outside the property boundary, a consequence of too many missed loan repayments. A smaller man talks hard at Joe across the gate. It is a wholly unpleasant scene.
Bailiffs. It should not have come to this. Joe does not deserve such a fate. An honest, tenacious and tough man, the head of a dedicated family that for generations have only thought of doing the right thing brought down by a debt burden. The bumper years that would have turned it all around simply did not come.
Family tragedy and sadness accompany the sorry deed.
Angry, bitter and overwhelmed by sorrow, Joe hands over the keys to the farm. He watches the soft furnishings and other loose fittings of his life leave in a removal van taking away what does not matter. Even the kelpies seem to struggle up into his ute, as somehow they know too.
The dust settles and the farm is silent.
The bank puts the property up for a fire sale playing out the logic of it’s secured loan system. Only no one wants to buy it. Not even at a discounted price. One of the many consequences of GFC 2.0 is a cash squeeze. There is simply no money available to borrow for such purchases, and cashed up buyers are holding on to what they have now that cash deposits are once again positive. Foreigners are prohibited under rapidly enacted ownership laws to shore up the protectionism that always comes into play in a crisis.
Years pass, the tanks dry out, and the paddocks see only wildlife and a few feral goats.
Here is what happens to the biomass production.
And here is what happens to the soil carbon levels.
Juliette is waiting tables in town and has taken to couch surfing when she reached the limit of her brother’s hospitality and patience. Being one of the few youngsters to keep his job at the bank has made him hard to live with anyway.
“Why not tell them my idea,” she pleads.
“Because it’s dumb, I would look like an idiot. You have no idea how easy it is to get fired”
“But it helps them out of a hole. They won’t sell the place and some income is better than no income, even for a bank.”
“What income? You can’t run that place any better than Dad did.”
“You reckon?” Juliette flared, then sighed. “Look I don’t suppose I could. It’s just I know that rest will bring back the good years. I just know it.”
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