Australian Farming's Minsky Moment

The Australian Financial Review recently reported that farmers nationwide are in serious trouble. At least 80 farming operations worth more than $1m across Australia are in receivership or some form of distress. In response Wayne Swan has announced $420m in subsidised loan packages for indebted farmers, indicating the weight of the high dollar and reduced land values was causing viable farms to struggle. Not mentioned by Swan was that buyers bid farm prices to levels that didn't enable a reasonable return on capital (see our earlier post, The Crap Economics of Farming).  As I explained in that post, it...

The Australian Financial Review recently reported that farmers nationwide are in serious trouble. At least 80 farming operations worth more than $1m across Australia are in receivership or some form of distress.

In response Wayne Swan has announced $420m in subsidised loan packages for indebted farmers, indicating the weight of the high dollar and reduced land values was causing viable farms to struggle.

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