80% of NSW is in drought

and the NSW govt is going to provide yet more funding for farmers in marginal areas that shouldn’t be farmed.

The number of problems here, compounded by govt, is truly mind-boggling.

The NSW govt – already neck high in debt – will be bailing out one group at the expense of others (me!).

Farmers on marginal land should get the Hell off the land and leave it fallow for a few years to recover and regenerate as natural reserve land.  If govt bails them out, guess what – further environmental degradation will occur once the rains (briefly) come down again and they overfarm (yet again).

This is not like an earthquake.  The farmers bought marginal farmland knowing it was marginal.  Rainfall maps are now available to any buyer of farmland.  No one can say they didn’t know drought was a risk.

This bailout creates moral hazard, with farmers buying marginal farmland knowing they will get govt bailouts if they overfarm and fall into drought.

Why are farmers trying to farm in drought-stricken areas?  Because more fertile land in higher rainfall areas (Hornsby, Penrith, Dural) has been taken over (destroyed) by residential construction.  Why?  Because local govts and the NSW govt re-zoned the land from farmland to residential or commercial or industrial years ago.  Why did they do that?  Because they needed the money and residential development provides huge windfall profits.  Why does re-zoning provide huge profits to developers and councils?  Because banks lend huge amounts of money for houses.  Why do they do that?  Because fractional reserve banking creates huge distortions in the market, mispricing housing and underpricing farmland.  Why do we have fractional reserve banking?  Because banks and govts could not be as large and powerful as they are without embezzling FRB.  Why do bankers and govts want to be large and powerful, if they know doing so results in such incredible destruction?  Ask Freud.

Residential land gobbles up fertile arable farmland in the most productive areas of Australia, and farmers are marginalised, far from urban areas, in the most marginal farming lands of this great land.

This is insane.

This is govt and banking at work.

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