Economic Rationalism & Competition Policy vs Reality

I've long argued against some of the idiocy that arose from Howard's "Competition Policy" - a lot of it stank of economic rationalism for the sake of idology - the market knows best.

Classic case in point was the Dairy Industry. Now deregulated, many once prosperous dairy regions (Malanda, Mackay, Sunshine Coast, etc) were left at the mercy of supposedly "efficient" Victorian farmers. So we now are flooded by cheap Victorian milk whilst the local suppliers struggle to survive.

Yet this decision alone smacked of hypocracy. The so called "efficiency" these farmers gain have come from MASSIVE water subsidies whereby incredibly cheap water is supplied into regions where previously dairy was not viable.

However, my biggest concern was one of staking too much in one hand. Whilst it may be great we can get cheap milk from one region to supply Australia, it also means that one major disaster has the power to throw milk supplies into jeopardy. The obvious one would be an outbreak of a disease like Foot & Mouth. With thousands of head of Cattle having to be destroyed, the milk market would go into meltdown. An unlikely scenario, but with similar outbreaks in the UK, it seemed like it could happen.

Well, we've now apparently got armageddon looming. We've been told that, unless there is significant rain in the catchments of the Murray Darling basin within 6-8 weeks, the draw of water for irrigation will stop. That means all that lovely cheap milk production will likely come to an end.

Let's hope that Malanda haven't been savaged too badly by Howard's disasterous policies!!!