The well managed family farm has several competitive advantages, including a greater depth of local knowledge and flexible labour costs. The ability to quickly adapt to changing circumstances means that the family owned farm will be an integral part of the rural economy for the foreseeable future. Given that the future direction of farming is likely to be in the hands of families rather than corporations, it is essential that farms be run on sound business lines. There is no case whatever for taxpayer support of poorly managed rural businesses, including where wrong investment or production decisions lead to commercial failure. Government should not be in the business of subsidising primary producers every time they meet adverse conditions.
History suggests that government intervention in the rural economy does more harm than good.
Indeed, in this area, the 19th century philosopher Thoreau was correct in his view when he said that government never furthered any enterprise but by the alacrity and speed with which it got out of its way. There is no better example of an industry which the government should move quickly to leave alone than the Australian wool industry. The dismal history of the reserve price scheme, which resulted in unrealistic pricing and devastating levels of debt, is a potent reminder that, no matter how worthy the objective, government intervention in markets does not work. As Ross Garnaut's recent review of the wool industry concludes, the future of wool marketing, promotion and stockpile management must rest with the private sector. However, this practical, not to say hard-nosed, attitude towards the rural sector must be matched by government strategies to raise the profitability of rural industry.