Economic irrationalists and dodgy bookkeepers

This letter to the editor of Australian FArm Journal in response to comments by the high profile farm economics consultant Phil Holmes of Holmes & Sackett. He described those of us engaged in regenerative farming as 'wild eyed zealots' who are afflicted by some pagan religious frenzy.

Dear Patrick,

Phil Holmes is right to say that a primary producer must know their profit drivers. He is not right to describe 'the basic outcome in your farm business' as short term profit. The single-minded drive for financial results for more than 200 years has driven the progressive degradation of the basic plant and equipment of all agricultural enterprises: the natural resource base. This cost to business has never been included in the P&L. Scientists estimate that conventional land management techniques have cost the nation 50% the topsoil and 70% of the soil carbon. Soil degradation reduces productivity and increases costs as fertilisers, herbicides and pesticides are needed to deal with the consequences of 'profit-only driven' management. As the global community is waking up to a massive bill for cleaning up the mess we made of the atmosphere by using it as a free garbage disposal system, it's clear that the traditional bookkeeping for agriculture has had a column missing: a cost of production that is still unrecorded. It's like having two sets of books. Either you assign all the costs of production to the enterprise in a disciplined, economic rationalist way. Or you wallow in the mediocrity of capitalising the profits and socialising the losses. Commonsense demands a clean set of books. Best practice in business today is the triple bottom line: balancing financial performance against social and environmental outcomes. Why do Microsoft, Toyota, and IBM report on their triple bottom lines? It is because, as Phil Holmes remarked in his article, financial success cannot make up for losing your health and your loved ones. Corporations know they can't make money if the environment and society are crook. Regenerating the natural resource base, which is the source of wealth in agriculture, is the only sustainable way forward. The alternative - 'mining' the soil and our waterways while not paying the full costs of production - can have only one outcome. The Cree Indians"Only after the last tree has been cut down, Only after the last river has been poisoned, Only after the last fish has been caught, Only then will you find that you cannot eat money."

Michael Kiely
"Uamby"
Goolma