A GIPPSLAND farmer, Barry, rang me last week after reading my column.

I'd said water, drought, climate change and quarantine were the things on most farmers' minds.

Barry said I was dead wrong.

"I've made a list of what's really concerning us - fertiliser costs, water costs, rates, diesel costs, regulations, no young people going into farming," he said.

"Go to the local markets and these are the things everyone's talking about."

All the talk about climate change was a furphy, he said.

"We've had more frosts in the past two years than I can remember, and water levels in the Gippsland Lakes are falling, not rising."

Barry's comments are worth reflecting on.

Climate change has become the buzzword for the Rudd Government's farm policy, but it may be that farmers are yet to be convinced that we're not just in the middle of a long drought.

There's no doubt input costs, especially fertiliser and fuel, have been rising sharply in recent times.

The global supply and demand conditions responsible are now receding, but it's not all good news - export prices are falling as well, and the lower dollar's limiting the cost benefits.

What can the Federal Government do to help?

For one, it can ensure there's no anti-competitive activity.

The Australian Competition and Consumer Commission was told to look at fertiliser prices and concluded things were OK after a "desk-top" study that convinced few, including a Senate inquiry.

The Government can also help farmers lift their productivity by boosting R&D, but results take time.

Which leaves subsidies. Farmers see competitors abroad - and car-makers at home - get handouts and ask, "why them and not us?"

It's a fair question.

Apart from fuel excise rebates and interest rate relief during drought, there's little else for farmers.

"Countervailing" subsidies are available under world trade rules, but there's been a decided reluctance to use them so far.

We've also started paying farmers for on-farm environmental work, but there's scope for a lot more.

Regulation, water costs and rates are mainly state and local government issues, but there's a general point - incentives, not taxes or red tape, are the key to good farm outcomes.

Getting these things right might be a good start in making farming more attractive to the young.

Barry said it was no surprise farm leaders said good things about the Government and Agriculture Minister Tony Burke.

"They can't be too critical or they won't get much," he said.

"I've met Mr Burke, he's an agreeable bloke, but he hasn't got a clue what's going on."

If Barry's views are widely held, there are messages here for those further up the line, including yours truly.