Everyone feels sorry for the present fix in which dairy farmers find themselves, probably the more so because their industry is not merely an industry but a way of life, a lifestyle, and part of an image of strong, proud and self-reliant people living on the land.

Strictly speaking, the crisis is not of their making, as if this mattered. Or it is, if only in the limited sense that eternally optimistic people come to expect that good prices, when they come, are here to stay and are indeed deserved. They come to forget, too, that high prices bring fresh players into the marketplace, whose production drives prices down. They are foolish for thinking that but, then again, so too were the iron-ore miners, coal miners and even dairy-industry leaders and ministers in charge of agriculture, who only a year ago were pretending a new era of prosperity had arrived for milk and cheese makers.

There was a time when dairying was a highly regulated business, with very local markets, because for the most part milk could not easily be transported long distances. Most dairy farmers had quotas guaranteeing good prices for a base level of production, with (usually) lower prices for any surplus production, whether as extra milk or for conversion into cheese, yoghurts, powdered milk and other products. As in the taxi industry quotas were traded, and the allocation of quotas as well as the artificial scarcity on which it was based was usually accompanied by corruption, including by officials.

Regulation was justified and necessary, it was said, so as to guarantee a minimum supply and distribution network of healthy milk to urban populations. That might have been an incidental effect. But supply was hardly ever the problem and public health consequences were virtually independent of how matters were organised. The industry was regulated mainly in the interests of suppliers. There was no particular interest in promoting economic efficiency or competitive behaviour between dairy farmers, and price was more focused on the need for an adequate return than what the market, or consumers, were willing to bear. Most dairy farms were fairly marginal operations, their denizens much pitied by slightly more gentrified rural producers, if only because dairy farming was a seven-day slog. In many states dairy farmers identified more with political Labor than with Protestant, comfy, rural Tories.

In due course, mechanisation, refrigeration and changing consumer demands changed some of the dynamics of farming operations, but the industry was slow to deregulate. Even before it happened the least-efficient farmers were being forced to the wall. From the 1970s hundreds of millions of taxpayers' dollars were spent, mostly by National Party ministers, in adjustment programs designed to ease people off their properties in the cause of more efficient dairying. There are about 6000 dairy farms today compared with 21,000 in 1980; the number of dairy cows is about the same. But these cows produce nearly twice as much milk; up from 5.4 billion litres a year to 10 billion litres.

More efficient operations, some of a scale hitherto forbidden, easily filled gaps in supply and permitted local co-operatives to compete in the Australian domestic markets against others who had once enjoyed local monopolies. Increasing production did not displace inefficient competitors so much as promote a push into developing countries with historically low milk consumption. Meanwhile, a more national market, including the development of the Coles-Woolworths oligopoly, changed some of the power relationships, leaving dairy farmers as price takers without much bargaining power at the bottom of the economic heap as usual.

Increasing demand in Asian markets bought temporarily higher prices but that also quickly brought in new sources of supply, including the European Community. Neighbouring New Zealand was also in competition, often with intrinsically more efficient operations. NZ, too, now suffers some of the consequences of assuming that booms last forever and that business plans based on high-price assumptions quickly turn to dust.

It's all part of the risks of the modern Australian economy's being less protected and much more a price taker in an open, world market. For all intents and purposes milk is like sugar, or wheat, coal, iron ore or bauxite, able to be bought in any marketplace and by buyers as well, if not better, informed about alternative sources of supply.

In recent years successive governments boasted of trade deals by which Australia opened its markets to competition in exchange for increased access to foreign markets, whether in the United States, China, Korea, South-East-Asia, Japan, India or Europe. The Abbott and Turnbull governments boasted of the economic opportunities created, particularly for agriculture, from such deals. Australia's dairy industry has benefited from such access. But it's a big boys' game and fingers can get burnt as we're now finding.

Like many other Australian workers forced to swim in the open ocean, dairy farmers now find themselves, after a brief bonanza, swamped by international market forces. The crisis is aggravated by cruel and oligarchic local predators in the form of Coles and Woolworths, surely up there with banks as institutions all right-thinking Australians love to hate. Because we can't do much to increase Asian demand, it is in any event easy to attach most blame to the big supermarkets, even if their contribution to disaster is of the order of 10 per cent.

Taxpayers can be thankful that Joyce, our Primary Industry Minister, hasn't so far simply sent a no-strings-attached cheque for, say, $200,000 to each and every dairy farming family. He would if he thought he could get away with it. If the Nationals were more hard-headed and less sentimental about farming as a way of life they would be doing farming folk a favour.

There are folk in the Liberal Party – including, it sometimes seems, Malcolm Turnbull – who would think that the Nationals' irrational economic behaviour in their own patch is simply part of the price of being in coalition. See, for example, Turnbull's willingness to hand power over environmental water to Joyce. That the Nationals' featherbedding of some forms of agriculture contradicts the government's general approach to a changing economy, or technological change, is neither here nor there.

In any event, an emotional but still firmly pragmatic part of Joyce's approach to such matters is his belief that good agricultural policy involves a maximum number of families on the land. Fewer dairy farmers, even if they are slightly more prosperous because of economies of scale, represent fewer votes and ultimately fewer Nationals electorates. By contrast, grain and meat producers are generally more wealthy, better educated and recognise economic nonsense, even (or especially) when preached by their own. More than half of Australian primary producers vote Liberal, not National, in part because they have come to believe their future lies in open markets rather than the Nationals' brand of crony socialism.

Joyce's solution to the present problem is to give all dairy formers concessional loans, presumably to make up their incomes to levels they have lost as a result of market operations. The analogy being used is of the situation farmers face when there is drought, or, so it is said these days, extraordinary drought, since farmers and graziers are supposed to factor in normal weather fluctuations into their business plans. (Not to put too fine a point on it, a drought is an extraordinary one, allowing the opening of the general Treasury, when a politician says so; which is when those affected make enough noise. It has only the most passing connection with an absence of moisture. The gates open so quickly these days that many primary producers don't have to withdraw money from protected funds they have set aside.)

The practical problem with Joyce's concessional-loans model is that such loans almost necessarily go to people who couldn't, on their present income and expenditure, qualify for a loan from their bank. Indeed, experience shows that those most likely to take up the loans are those whose financial situation is most desperate, which is to say many of the industry's least efficient players. There is no reason to believe that the present crisis of local and international oversupply of milk and milk products, and steadying local and international demand, is a short-term one.

The poor folk who take the loans may buy themselves time, but will probably be driven out in due course anyway. By then they will be deeper in debt, have even less in the way of equity, and will be more at risk of default or insolvency. They will not thank the Nationals for the life support, such as it was.

Stand by, a little further down the track, for more heart-rending images of farmers and their children leaving milk factories that have also been homes, centres of life, essential components of local sporting teams, churches, worthy organisations, schools and shops. Stand by for populist rants and appeals from shock jocks who will blame everyone and everything for the spreading social disaster of further depopulated (and ageing) Australian agriculture, the stripping of small towns and once-vibrant societies and the loss of social capital, except the markets, the politicians and the farmers themselves.

The cynic can remark, rightly, that what will be happening is little more than has happened to car workers, miners who lost their jobs because of declining commodity prices, shops, restaurants or video stores, hardware operations and post offices that fell victim to new market forces. They might even add that there may even be no great difference in principle between the fate of such workers, and their families, and public servants, scientists and others who have lost their jobs as a result of political whim, the mania for public service reorganisation and rationalisation, and the tendency to centralise service delivery.

But none of these other personal tragedies, individually or collectively, seem to impel a political, as opposed to economic, response in quite the same way that rural decline can.

(It is quite true, of course, that the political rescue package for South Australia, in the form of major submarine contracts, will dwarf anything going into the rescue of ailing sectors of primary industry over the next two decades. But it should be remembered that critical decisions along the way to that, such as consciously shutting down the car industry, were done with bravado by politicians in the present government, including by Nationals, and with apparent indifference to the fate of workers, who would, it seemed, simply have to get retraining in any industries that could survive the economic forces of today. It took such politicians, including South Australian Liberals, to realise there is a price to pay for inflicting human misery in selected obedience to supposedly immutable economic laws.)

Perhaps the farm lobby has better representation, or a better press. Or, one way or another, a political party whose claim to electoral support has always been based first on the idea that it stands for people in agricultural industry, as well as other folk that agricultural wealth makes into local and regional economies. The Nationals make a separate appeal to local economies based on mining, but are more realistic about the effects of changes in price and demand.

The Nationals have been largely unsuccessful in expanding beyond that 80 per cent of geographical Australia in which only about 15 per cent of Australians live. Miners, perforce, must take the prices they are offered, and must move to find work where it's available. But a farmer's life is, or is imagined to be, far more rooted in place. In the modern age, this is more questionable. There are properties that have been in the same family for generations. But the vast majority of farmers have bought and sold land, and changed the way they manage it, as circumstances have suggested. I have scores of relatives on the land but most are not on properties farmed or grazed by their fathers and mothers.

The idea, or ideal, of clusters of pious, hard-working families engaged in monoculture is much fading, in Australia as in the US. But there's a mythology about it, whether in Canberra or other cities, or in the high councils of political parties. Sentiment provides little knowledge or experience and does few favours.

With or without market misjudgments and family tragedy, open markets suit Australia's situation, and it's almost impossible to imagine how Australians could be better off with close and protected borders keeping out Chinese tools, Korean cars and Japanese refrigerators. It is sometimes very hard to see whether Australia has benefited as much from trade deals as some of the spruikers claim, if only because trade volumes, in either direction, can depend more on the general health of particular economies than tariffs or quotas. The Productivity Commission argues, in any event, that most of the benefits of freer trade come from unlilateral action by us to open our borders.

But the moral and political certainty of the political class, big-business lobbies and even of most (but not all) Australian union leaders must also grapple with the political facts and the consequences of economic displacement. We may all want successful capitalism, but we blanch at seeing fellow citizens thrown in its fire.

Many Australians see freer trade as a part of that bad economic upheaval and disturbance of a settled order that might be generally called "change". Many Australians are sick of constant change. No matter what the Malcolm Turnbulls or spin doctors say, they are not "excited" about the "challenges" and "opportunities". Many are much more nervous and insecure, whether about their own future or the futures of their children and grandchildren. That fear has been exploited by people such as Pauline Hanson but it is also regularly pandered to by politicians of all stripes, with Joyce, the "retail politician", usually to the forefront.

Fear and insecurity are feelings compounded by the belief that politicians and the institutions are doing very little to prepare for or change the future, including about climate change, the environment or the future of agriculture. The approaches of a Barnaby Joyce are a part of the problem, not of any solution.

Meanwhile, in the US, Donald Trump and Hillary Clinton pretend they are against any extension of free trade. Trump has long been a critic, claiming American trade treaties have merely exported jobs. He pretends he can renegotiate them. Clinton, once a "realist", is being pressured by the anti-Trans Pacific Partnership rhetoric of Bernie Sanders and organised labour to pretend she won't endorse the TPP in its present form. In Britain, the forthcoming plebiscite on Brexit, or exit from the EC, is harnessing protectionist sentiment. Just as the post-GFC crises of an array of EC countries, and the refugee entry from Africa and the Middle East, are increasing isolationist sentiment and calling for more active interventions to protect local jobs.

Is the tide going out, for the next few years at least, on further trade liberalisation? That would really spill the milk for Australia.

Jack Waterford is a former editor of The Canberra Times.