Charles Sturt University, Senior Lecturer in Sociology, and Director,
Centre for Rural Welfare Research. Wagga Wagga
There exists a stereotypical image of the Australian country town as an organic community of like-minded, morally conservative church goers who know each other by first name and who live in tree-lined streets of neat but unpretentious houses. It is a community which proudly displays its ‘Welcome to...’ sign which lists the meeting times of organisations such as Apex, Lions and the CWA and which usually exhorts the visitor to drive carefully. It has invariably won a tidy town award in the last five years but does not, as yet, have a McDonalds (the two are not entirely unconnected). Farm dogs roam the streets on Thursday nights looking for their masters who have ventured into pubs with names which either honour royalty or allude to sport. And amongst the drinkers at the pub there is an avowed dislike of ‘the urban’ and what it appears to represent - the yuppy, the bureaucrat, the greeny, the gay rights and black activist, the feminist.
The local paper reports of corruption in high places and denounces the moral decline of society. It implicitly, and occasionally explicitly, considers that Australia would be far better off it if stopped all welfare payments, reintroduced the death penalty, returned to a white Australia policy and adopted compulsory conscription for unemployed youth. It blames Labor governments for economic decline and when Labor is not in power it blames labour unions. It is a community which is proud but moralistic, uncompromisingly patriotic but also overwhelmingly conservative.
If this is not the view we have of ourselves, it is certainly the view that many urban people have of us.
Stereotypical views can, in fact, alert us to the undeniably common characteristics of social structure and culture which have been so well described by Australia’s poets, novelists and film makers. The problem is that such descriptions usually remain superficial. They do little to identify variation in form or to explain processes of economic growth or decline. They help to perpetuate the myth that rural Australia is essentially homogeneous.
The danger in a paper of this sort - which seeks to identify the impact of change upon rural society - is of falling into the trap of viewing rural society as the sort of community I alluded to above. Yet it is the diversity of agricultural production types and the quite obvious differences in the social makeup and economic prosperity of hamlets, villages, towns and regional cities which makes it difficult to generalise about rural Australia’s future.
Just as a rice farm in the MIA is structurally different from a cattle station in the Kimberleys, so small inland towns, which maintain a close link with agriculture, are different from those spread along the coastal fringe and which have their fortunes tied to retirement or recreation. Economic and social processes, geographical location, population size, resource base and a host of other features interrelate to give a distinctive structure, style and political outlook to the settlements and regions of rural Australia. In this sense it becomes somewhat meaningless to lump together Broken Hill and Booligal, Mt Isa and Mangoplah or Tenterfield and Talbingo, yet all form part of rural (or non-metropolitan) Australia.
To assert that it is difficult to make generalisations about rural Australia is not to deny that it is possible to recognise the forces of change impacting upon rural communities. But here, again, there are problems. To understand the processes occurring at the local level, it is necessary to identify trends at the national level, and to identify trends at the national level, it is necessary to think globally. We have come to recognise, for example, that the growth or decline of communities in a wool and wheat growing region like the Riverina may now be determined more by decisions in Washington or Brussels than by those taken in Canberra. In this paper I have concentrated upon the impact of three broad processes occurring at the global and national levels. All relate to the structural imperatives of the trans-national corporation which is the dominant form of economic establishment in today’s capitalist system.
The Direction Of Change
The basis of my thesis is that it is impossible to understand changes in social structures and relations at the farm and the regional level without first identifying the requirements of trans-national corporations (TNCs).
The capitalist world is dependent upon the growth and expansion of TNCs and these seek above all else to maximise profits. Because of their size, the resources at their disposal and their high degree of market control they operate in a different fashion from firms in the competitive capitalist sector. They can set prices, coordinate production and sale on a world basis, work with, or at other times totally disregard unions, and are in a very strong bargaining position with national governments when it comes to investment decisions. To grow, nation-states like Australia need capital investment. In fact, the fate of the economy (and, indeed, of political parties themselves) in a country like Australia is tied intimately to the investment decisions of the corporate sector. The corporations, in other words, must be wooed. The question for governments becomes:
what do the corporations demand and under what conditions will these firms invest their money? In general terms the TNCs demand conditions under which they can:
• trade on a global scale with their own affiliates (they do not respect the ‘artificial’ tariff and other barriers set up to protect local industry);
• have a guaranteed production cycle with no labour disruption (they tend not to invest in areas of trade union militancy and characteristically avoid countries with a history of political instability);
• reduce their costs of production (through investment allowances, concessions and low taxation rates);
• set prices without interference from governments;
• reduce competition via takeovers and managerial reorganisation;
• penetrate those areas of the economy which remain outside corporate control (those which remain in the hands of small competitive capital or those which are controlled by government) (see Edwards et al., 1987).
Actions of the Australian government in attempting to create a climate of investment for trans-national capital are of significance here. It has begun to remove tariffs, has eliminated a number of important regulations and restrictions in the finance sector, has loosened the grip of the Foreign Investment Review Board (FIRB) in non-urban property transactions, has, via the wages accord, reduced the real level of wages (while, some would argue compromising the leadership of the trade union movement), has allowed corporations to make increasing levels of profit at well below standard taxation rates and has initiated a number of investment schemes based on tax write-off s. Importantly, it has begun to prune its own expenditure in line with corporate demands and has countenanced the sale of public assets in line with a free market philosophy espoused by corporate bosses.
The main trends that can be identified are, therefore, corporatisation (the concentration and centralisation of capital inthe corporate sector), rationalisation (the attempted pruning of expenditures both within the corporate sector and within state structures), and deregulation (reduction of restrictions on corporate activity and the opening up of new opportunities for corporate profit-making). Given that the economies of nation-states comprise not only corporations, but small scale capital and often well-organised working class, a counter tendency toward protectionism also exists. (Protectionism is not so much a trend but an old fashioned defence by the nation-state which, for reasons of political legitimacy, must be seen to be assisting local capital and workers. It is being seen, at the global level, to be anarchronistic).
Australia is, to some extent, located uncomfortably within the world economic order. Like many Third World countries it is dependent upon the sale of largely unprocessed agricultural and mineral products yet maintains a politico-cultural structure (including a wages system) and has a social history in keeping with that of the more advanced ‘centre’ nations (such as the US, UK and West Germany).
In seeking to conform to the needs of trans-national capital it has adopted policies of rationalisation and deregulation but, because of entrenched protectionism abroad, is unable to pursue a more thorough-going export-oriented and corporate-directed future. So its industries continue to import the items demanded by people living in an advanced economy (the most expensive imports in 1988 were computers ($1.8b), cars ($1.8b), forest products ($l.6b), oil ($l.6b), aircraft ($1.3b) and industrial equipment ($l.6b) (Australian, 20 May 1989; 6), but it must pay for this from the sale of commodities which are rising slowly (if at all) in price. This, of course, is reflected in deteriorating terms of trade. The trade deficit, in turn, has been reflected in growth in international indebtedness. One economist has estimated that to overcome the present trade deficit, exports will have to grow by as much as 6 per cent per annum (they are presently one quarter of this) for ten years and that some 400,000 people will need to be shifted into export-related activities (Blandy, 1987:1). If the Australian government is to appease its workers (that is, to retain existing living standards) it must look at:
• developing new export industries;
• increasing the output from, and productivity of, existing export industries;
• stimulate production in Australia of goods we currently import (import substitution industrialisation).
It is actually attempting to do all three, but is running into problems. The last option usually requires the imposition of tariff barriers and so represents protectionism. This leaves the first two options. The government is attempting to create conditions for the establishment of the new ‘sunrises industries as well as service industries such as tourism. Some success is likely to come in these areas, but they are non-traditional areas for investment so that corporate investment - especially in the ‘sunrises industries - has been slow. It is therefore the second option - that of increasing the output from, and productivity of, traditional export industries - which is seen to be crucial to Australia’s economic future.
Translating this to agriculture, what we have begun to see is the restructuring of farming industries in line with the interests of trans-national agribusiness.
In terms of corporatisation Australian agriculture has experienced capital concentration. Not only are farms becoming bigger (and fewer) but they are being fully integrated into the corporate sector via the purchase of manufactured inputs and via the sale of output. The agribusiness firms, themselves, are identifying new areas for profit making and corporate restructuring. Food processing is one such area, while the issuing of contracts to growers (and therefore the greater control of on-farm practices by corporations), the provision of credit, and the development and sale of new, productive technologies are other areas. This constant penetration of family-farm agriculture by agribusiness is resulting in precisely what the government and big business demands. It is helping to improve labour efficiency (via the substitution of capital for labour) and is leading to increasing volumes of food and fibre being made available for world trade.
Rationalisation is occurring as corporate takeovers allow companies to strip assets as well as to reduce overheads. In some cases this has meant the closure of plants and branch stores in rural towns and the reliance of farmers upon one or two large and powerful traders for the supply of inputs and for the sale of output. Governments too, in an effort to solve their own fiscal problems, have been actively engaged in rationalising their services in rural Australia. This has led to the closure of schools, courthouses, agricultural research establishments and other government instrumentalities in smaller towns and, after staffing cuts have been made, the re-establishment of services and facilities in the larger regional centres. User-pays principles - the full costing of services provided by the state - have been another feature. And, finally, the removal or reduction of subsidies and concessions from, and the underwriting of, the agricultural sector is being done with the express purpose of rationalising the system of family-farm agriculture. The rationale is that if farmers are exposed directly to world market forces they will act swiftly to make necessary adjustments in production type, management, inputs and so forth and will either grow and prosper, or will be forced to leave the industry. Both outcomes are seen as desirable especially when current economic theory suggests that the growth and prosperity of some farmers is consequent upon the removal from the industry of others.
Deregulation is something currently endorsed by all political parties and, in particular, by the National Farmers’ Federation (NFF).The removal of protection is considered necessary for the lowering of costs for the rural producer, while the floating of the dollar is endorsed as a means of increasing Australia’s competitiveness. The NFF would also like the labour market deregulated so that the wages share of GDP might fall, supposedly allowing for lower farm costs, increased employment and stimulation of new industry (NFF, 1981:33). Deregulation of wheat marketing is also a small step along the way to the eventual disassembling of statutory marketing authorities (SMAs). The Department of Trade (1987) has argued that the SMAs represent a direct barrier to the further corporatisation of Australian agriculture and should be removed if the family-farm sector is to link with agribusiness in its penetration of foreign (especially Pacific Basin) markets. At the regional level deregulation has already had some effect. Local grain silos are emptying as wheat farmers begin to deal directly with corporations. Rail services have been cut in response and there are more grain trucks on rural roads. With the softening of the FIRB guidelines, Japanese capital has begun to purchase regional properties for beef feedlotting, and, in the MIA, the first steps to alter home maintenance area land tenure and the transferability of water entitlements are being taken by the Greiner government. In the case of Griffith, local officials are concerned that the sale of land and water entitlements will lead to the corporatisation of agriculture in the MIA and that the likely loss of farm population will set downward multipliers in motion which will undermine the economic basis of the city of Griffith. It is to the matters of the impact of the formerly-mentioned trends on the family farm and the regional community which I will now turn.
Social Impact Upon The Family Farm
The typical family farm - one employing primarily family labour in the production of commodities to be sold on national and world markets - is under considerable pressure to adjust production in line with world market forces. In the context of the reduction of direct support by the Australian Government, the family sector is faced with a number of choices. One is to abandon commercial agriculture and over 3,000 farms each year out of a present total of 167,000 farmers are making this choice (ABARE, 1989). A second choice is to work harder with the same resource base - which places an increasing degree of stress upon family labour, particularly where employees are shed as a cost cutting measure. A third choice is to borrow in an effort to purchase more land or bigger and better machinery. With high interest rates and unstable commodity prices many farmers choosing this path are becoming increasingly vulnerable. Financial pressures make it imperative that maximum production be achieved - and this often at personal and family cost. A fourth is to alter production to take advantage of new market opportunities. There are difficulties here associated with abandoning machinery and/or practices with which the farmer is familiar and adopting production plans which may be untested and of a high risk nature. The age, education and work experience of many of the small family farmers may preclude such an option. And, of course, the banks may not be willing to lend the money required to begin a new enterprise. A fifth and final option is to take off-farm work. But while this is a legitimate and sensible option (particularly for well trained farm labour) it does often come with costs. The farm itself may deteriorate which further reduces on-farm profit levels, while family members may be forced to abandon extra-economic pursuits such as involvement in social organisations.
Clearly, the social effects of the restructuring of agriculture are hard to quantify. But what has been established by rural counsellors, welfare workers and sociologists is that agricultural restructuring is causing significant social problems throughout rural Australia. Some of the outcomes are considered below.
Farmers are cutting corners in an attempt to save money and to improve efficiency. They are, in other words, taking risks in their on-farm work activities. They are deliberately ignoring warnings in the use of chemicals, they find wearing special apparel and hearing and breathing safety equipment to be costly and tedious, and they are often asking younger family members to undertake tractor and other work which might otherwise have been done by hired farm labour. Consequently, the level of farm accidents is increasing. Farming is one of the most dangerous occupations in Australia in terms of health and safety (National Farmer, 24 July 1987; 6 August 1981; 7 August 1980). In 1983-84 approximately $6m was paid via accident compensation to agricultural workers in NSW. This was a rate of compensation of 1 in 16 workers, thought to be an underestimation of the real problem because many who are injured keep working, rather than take time to rehabilitate, in an effort to sustain production on the family farm (Webster, Bath and Lush, 1985). In 1983 the number of tractor fatalities in NSW was second only to motor vehicles as the cause of death in occupational accidents (Clarke, 1985).
Suicide rates have increased during the 1980s: during the period of the drought/farm crisis, farm suicides increased by some 67 percent (Lawrence, 1987). Surveys have revealed that rural people experience 10 percent more illness and 28 percent more hypertension and psychiatric disorder than do urban Australians. For example, in the Coleambally district during the height of the rural crisis treatment for stress-related illness such as heart attacks, hypertension, asthma and insomnia doubled over a two year period (Lawrence, 1987:43).
Farm poverty levels - a direct outcome of both falling prices for agricultural goods and the increased prices of purchased inputs - grew steadily up to the mid-1980s (when the most recent figures were calculated). At that time about one in five farm families were living below the poverty line. Despite improved prices for some commodities and despite the possession of quite considerable farm assets, smaller family farm operators often experience major cash flow problems and remain in a position of income deprivation (Rural Counselling Resource Centre, 1989).
Farm women have taken a great deal of the burden associated with agricultural restructuring. Researchers from Queensland University have indicated just how crucial women’s paid and unpaid labour has been to the maintenance of the family farms. Many worked the equivalent of a 40 hour week on the farm but managed as well to fit in off-farm work as a means of improving cash flow. In this sense they had become part of a ‘rural reserve army of labour’ (Baxter et al., 1988:114). Others were prevented from taking off-farm work because of the erosion of job opportunities in the towns in farming districts. Rural women, in contrast to their urban counterparts, experience lower rates of workforce participation, higher unemployment rates, are in lower status jobs and receive less money for their labour (Baxter et al., 1988). Under conditions where members of the farm family are frustrated in their attempts to improve their income, domestic violence is a possible outcome. While it is not necessarily the case that male farmers are the main perpetrators of domestic violence in rural regions, there is a disproportionate number of domestic homicides in rural rather than urban regions. Factors such as isolation, lack of counselling services, combined with the well established patriarchal attitudes of rural males all contribute to the problem (Samyia-Coorey, 1987).
The education of farm children is another concern. All farm members -including children - are being expected to work harder and, at times of reduced income, there is a noticeable tendency for farm youth to remain on the farm rather than to attend agricultural or other colleges (Lawrence, 1987). Rather than having a sound technical basis for farming, many farm children will be at a distinct disadvantage in relation to their peers and are likely to produce yet another generation of farmers who are poorly equipped educationally to cope with advanced agriculture.
Social Impact Upon Regional Communities
The most significant impact upon regional communities of concentration, rationalisation and deregulation is the population loss which results from these trends. At the beginning of this decade social scientists in Australia (and in countries throughout the developed world) were detecting what they termed a ‘population turnaround’ . It appeared that the historical tendency toward population concentration (with large metropolitan centres growing at the expense of small towns and rural regions) had been reversed or at least retarded. From the Australian Census of 1981 there was an (albeit slight) increase in the number of rural dwellers and an overall increase in rural dwellers as a proportion of the national population (Hugo, 1983).
Figures revealed that the population of small country towns (200 to 1000 persons) grew by 13.4 percent and in the open countryside (all places less than 200 people) by 11.8 percent compared with 7.6 percent for the nation as a whole (Smailes and Hugo, 1985). This seemed good news for rural Australia and researchers had hypothesised that it was associated with decentralisation initiatives, scale diseconomies in large urban areas, development of new transportation and telecommunications linkages, new value and lifestyle preferences and the surgence of small business (including farming activity) in regional areas (Hugo and Smailes, 1985). However, many of us living in regions like the Riverina remained unimpressed. Places like Grong Grong did not seem to be surging ahead but rather, more and more farmers were selling up and moving on.
So what was going on? The reason for the ‘population turnaround’ was twofold. Governments were creating public sector opportunities in major centres throughout rural Australia (and bureaucrats willingly took up residence in country Australia). The second was that ‘rural’ was basically ‘coastal’. The population turnaround was really the growth of small coastal and near-coastal villages and closer settlement of farms along with the growth of satellite towns outside regional centres and of regional centres themselves. The much heralded turnaround had largely escaped inland regions of Australia. The corporatisation of agriculture and the rationalisation of government services that has occurred during the 1980s has again led to the appearance of the prior tendency toward rural depopulation. Many middle sized country towns which have been linked primarily to agriculture (places like Narrabri, Moree, Forbes, Cowra, Cootamundra, Temora, Narrandera) have registered population loss as services and facilities have become regionalised in headquarters in cities like Tamworth, Dubbo, Wagga Wagga and Albury (Planning Research Unit, 1989).
Figure 1. Growth and decline of NSW country towns. (Source: Planning Research Centre (1989). Rural Settlements: Planning for the Future, University of Sydney, Sydney.
Figure 1 provides an indication of the growth and decline of NSW centres in three intercensal periods. It is clear that the 1981-86 period has been one of rural depopulation in NSW. Five of the six small towns chosen in a major study of rural Victoria also showed population stagnation or decline (Henshall Hansen, 1988). It appears - in NSW at least - that towns up to 15,000 people will lose out to the larger regional centres in years to come (Planning Research Unit, 1989). At the regional level it is possible to see some of these broader tendencies in action (see Tables 1 and 2).While the cities of Wagga Wagga and Griffith grew in population in the 1971-86 period all other local government areas lost population. And, while the urban population of the Riverina region increased by some 30,000 people in the 1954-86 period, it was Wagga Wagga and Griffith (together increasing their population by 27,000) which accounted for 86 percent of that increase. Significantly the regional population actually dropped - from 144,250 to 140,540 in the 1981-86 intercensal period (see Table 2).
The danger is, then, that without changes to the forces which have been identified earlier in the paper, the regional population will continue to decline. Agricultural output will inevitably expand at the same tine as rural communities decline, since both are direct outcomes of the capitalisation of agriculture. With population decline and the ;eduction of both private and public services and facilities, there exists the danger that rural people will be denied access to essential health, welfare and educational provisions.
The orthodox solution is for those who perceive they are disadvantaged by country living to sell up and move elsewhere. Unfortunately this is not often easy. When towns begin to lose people, property values decline which in turn traps many people (Planning Research Unit, 1989). Moreover, the differential between house prices in a town-in-decline and those in areas where there is growth represents a major cost for those who wish to sell up. The people who are trapped in this way are largely powerless to alter their circumstances and, with job opportunities declining as economic activity is reduced, many become candidates for rural poverty.
The aged are one particular group who are significantly influenced by the process of government rationalisation. Researchers have shown that isolation and lack of services combine to limit aged care provisions in rural areas (see Dunn, 1988). Many of the rural aged lack facilities such as running water, sewage and electricity (Calder and Wilson, 1989). There is also a quite profound lack of knowledge about the services which may be available (Dempsey, 1981).
Rural youth does not fare well. When schools close, parents are usually eager to move. If this is impossible, children must travel longer distances - which places yet another barrier in the way of improved educational attainment. It has been found that in rural areas approximately 10 percent of girls and 7 percent of boys go on to tertiary education. This compares unfavourably with 27 percent of girls and 27 percent of boys who take up tertiary studies in metropolitan areas (Commonwealth Tertiary Education Commission, 1987). Recent initiatives of the Federal Government have sought to increase non-metropolitan retention rates, to increase the transfer rates of students from high school to tertiary education and to increase the overall participation of rural children in education and training so that rural youth might have the same level of tertiary qualifications as their counterparts in the cities (Australian Government, 1989). This, of course, is laudable. But unless suitable jobs become available in non-metropolitan areas many young people will move or simply remain in the towns as highly qualified dole recipients. Studies have confirmed that a substantial proportion of rural youths who finish schooling or further training would like to remain in a rural region. The major barrier is the lack of work options (see Walton, 1987).
In Australia, at the end of the 1980s, it remains that no political party has an integrated social development plan which aims to address the many problems faced by rural Australians.
I began the paper by asserting that the urban image of rural Australia -while faulty - nevertheless existed as an image of conservatism and economic backwardness. This, in itself, probably prevents many city people from considering rural living as an option. But it is the structural barriers -lack of jobs, limited educational facilities, reduction in services, isolation and the like which must be overcome or at least addressed if the tendency toward population loss in rural towns and villages is to be reversed. My conclusion regarding the social development of inland rural Australia is relatively bleak. This is not to say that under changed circumstances a different picture might emerge. For example, if government were to decentralise their activities from the cities via regionalisation of services, this would, via the multiplier effect, increase job opportunities and overall economic activity(although much of the benefit would, of course, be gained by centres like Wagga Wagga, Dubbo and Tamworth). If new manufacturing industries were to bypass the cities and locate in rural regions this would provide a much-needed boost to local economies.
Indeed, some observers paint rather glowing picture of a future rural Australia. Serviced by a Very Fast Train and linked with the most sophisticated satellite communication technology, rural Australia - and particularly its regional centres - will become the lifestyle choice of an increasing number of city professionals. Agribusiness, rather than being a form of organisation which extracts increasing levels of surplus from the farmer, will begin to ‘value add’ in rural regions, will provide a wide range of jobs and will reinvest profits in local areas. Here is the view of researchers at Sydney University:
“The decline in rural population may slow and even reverse as the integration of farming into the agribusiness system provides greater economic stability. The lifting of marketing restrictions may provide additional opportunities for marketing and other off-farm activities to occur in rural areas. This will create a more diverse range of products, increased job opportunities and therefore a more stable local economy...
... New small firms serving local and regional markets may be attracted to provincial centres (Planning Research Centre, 1989:4).”
I remain unconvinced. So long as the global tendencies towards corporatisation, rationalisation and deregulation continue it would seem that any increase in the output of agriculture will go hand in hand with a decline in the agricultural population. And, as has been shown, the regional impact of the decline within the agricultural population has traditionally only been offset by government infrastructural expenditure and employment creation in country towns. Yet the process of rationalisation would seem to preclude such an option. The challenge for the 1990s will be to improve the efficiency of agriculture and the productivity of labour while avoiding the social inequities which appear to result from the economic restructuring process which accompanies this efficiency drive. The challenge, of necessity, must be one met and resolved at the political level.
* We should not confuse world market forces with ‘free’ market forces because under conditions where corporations can use their powers in the market place and where protectionism and subsidisation abroad help to lower costs of production to competitors, there is really no such thing as a ‘free’ world market.
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