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Crop blight likely to hammer business

SMALL businesses in some WA rural areas face a bleak Christmas following the third poor harvest in three years.

Businesses around the “Lakes District” which includes Lake Grace and Ravensthorpe are expected to be hurting with farmers there hit by a dry winter and overly wet summer this year, after two years of frost-affected crops.

And unlike the South West and other regions, towns there have no alternative tourism or mining industries to carry them through.

WA’s farming communities are going to be more than $1.5 billion poorer due to the poor harvest that is likely to reap only 7.5 million tonnes of grain this year. Last year’s harvest brought in 12.1 million tonnes.

Ravensthorpe shire president and small business owner Rick Besso said the farming community in his town was really hurting and passing the pain on to the town’s businesses.

“The real fallout is going to start hitting around March,” he said.

“At the moment we’re sitting well because there is still some money around but a number of farmers will leave the district.

“From the small business point of view we’re all looking to our budgets and are quite concerned about what will happen.

“Over the past two years there has been a tightening of spending. I’m a builder and I’ve noticed a tightening in my markets.

“The machinery dealerships will start seeing sales slumps and an increase in repair work.

“Some of the farmers around here are putting off their permanent staff and that starts to come back to the community.

“I know a number of parents have pulled their kids out of schools because they can’t afford to keep them in. We’re all going to pay for that long-term because these children may not be able to reach their full potential.

“Once a lot of the service industries leave towns such as Ravensthorpe, they rarely return.”

Farm Machinery Dealers Association representative Sandy Lewis said things were looking very bleak for the industry.

“We’ve been through this three times before. It’s not a good situation but we’ll get through it,” Mr Lewis said.

However, since 1984, the association’s membership has dropped from 2,400 to 600. Mr Lewis believes that membership could drop further following this crisis.

He said the association would be seeking ideas from business people around rural areas to see how dealers could help themselves.

“We may also look for some Government help. One suggestion is deferring Group Tax for six months,” Mr Lewis said.

The WA Government has put $25 million into farming assistance packages through keeping the Grain Rail Freight Levy, setting up Farm Family Business Reviews and increased financial support for Agriculture WA’s locust campaign.

It also reduced the royalty rate for limesands specifically used for agricultural purposes to 30 cents a tonne.

The Government is trying to get some Federal Government assistance for drought affected WA farmers.

Flood-affected New South Wales farmers have been given a $216 million Federal assistance package and Primary Industries Minister Monty House wants similar assistance for WA farmers.

The National Rural Advisory Committee has visited WA but is not likely to make a recommendation for Exceptional Circumstances assistance funding to Federal Agricultural Minister Warren Truss until the end of next month.

Mr House said helping farmers through the tough times, would flow on to help rural small businesses.

However, Small Business Development Corporation managing director George Etrelezis said even though farmers received funding, they would still cut their spending.

Mr Etrelezis said his organisation’s Business Enterprise Centres were being geared up to help small businesses revise their budgets and keep trading through the tough times.

“We may see some small businesses diversifying to survive,” he said.

“In the case of husband and wife teams, we could see the husband going out to work somewhere else for six months to get money to keep the business afloat, while the wife stays on to run the business.”

Mr Besso said Government money rarely filtered through to where it was needed.

“We need to look at measures that will keep people on the land long-term, things like fertiliser subsidies, chemical subsidies,” he said.

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