Many Australian farmers and rural communities have been experiencing hardship from the latest severe and prolonged drought. While this is not new to dryland farming, 'irrigation drought' is uncharted territory.
Australia has always had a variable climate, with drought being a recurring feature. Looking to the future, experts predict higher temperatures and, for some regions, more frequent periods of exceptionally low rainfall.
Most farmers are sufficiently self-reliant to manage climate variability.
In 2007-08, 23 per cent of Australia's 143 000 farms received drought assistance, totalling over $1 billion, with some on income support continuously since 2002.
In drought declared areas, most farmers manage without assistance. From 2002-03 to 2007-08, on average, about 70 per cent of dairy and broadacre farms in drought areas received no drought assistance.
The National Drought Policy's (NDP) Exceptional Circumstance (EC) declarations and related drought assistance programs do not help farmers improve their self-reliance, preparedness and climate change management.
EC interest rate subsidies and state-based transactions subsidies are ineffective, can perversely encourage poor management practices and should be terminated.
EC household relief payments are limited to those in drought-declared areas, ignoring hardship elsewhere or for other reasons. They should be replaced.
The EC declaration process is inequitable and unnecessary. It should not be extended to new areas. Current declarations should lapse as soon as practicable.
Governments need to commit to a long term reform path that recognises that the primary responsibility for managing risks, including from climate variability and change, rests with farmers. To this end:
research, development, extension, professional advice and training to improve farmers' business management skills and build self-reliance warrant significant government funding where they deliver a demonstrable community benefit.
Farm Management Deposits, notwithstanding their use for tax management, have encouraged farmers to save and to be more self-reliant, and should be retained.
policies relating to water, natural resource management and climate change, which all impact on farm businesses and local communities, are often at cross-purposes and need to be better coordinated and integrated.
all farm households in hardship - regardless of cause or location - should have access to an income support scheme that is designed for farming circumstances.
Similar recommendations from the previous reviews of the NDP have not been adopted. To ensure that this new policy direction is credible and enduring:
the NDP should be replaced with extended objectives for Australia's Farming Future.
an intergovernmental agreement with independent monitoring and financial incentives for complying with agreed commitments should be established.
Contents
Preliminaries
Cover, Copyright, Terms of reference, Contents, Abbreviations and explanations
Overview - including key points
Recommendations
Chapter 1 Introduction
1.1 Drought policy – a continuing evolution
1.2 The national review of drought policy
1.3 Contextual matters
1.4 The draft report process
1.5 Outline of the report
Chapter 2 Agriculture and adjustment
2.1 Introduction
2.2 Profile of agriculture in the Australian economy
2.3 Adjustment in agriculture
2.4 Building a secure capital base
2.5 Rural-urban drift, sponge cities and small towns
Chapter 3 Climate variability and drought
3.1 Drought and climate variability in Australia
3.2 Effects on agricultural systems
3.3 Market impacts
3.4 Social impacts
3.5 Environmental impacts
3.6 Recent experience and future outlook
Annex: Rainfall by district
Chapter 4 Drought policy in Australia
4.1 The evolution of drought policy
4.2 Current programs
Chapter 5 Exceptional Circumstances declarations
5.1 Introduction
5.2 Assessing the EC declaration system
Chapter 6 Program evaluation
6.1 Introduction
6.2 Assessing the appropriateness, effectiveness and efficiency of drought support programs
6.3 Issues across programs
6.4 Evaluation of programs that support rural families
6.5 Evaluation of drought triggered business programs
6.6 Evaluation of preparedness and advice programs
Chapter 7 A new policy framework
7.1 A revised national drought policy?
7.2 Objectives for agriculture policy
Chapter 8 Promoting self-reliance and preparedness
8.1 Introduction
8.2 Research and development
8.3 Information and advice
8.4 Education and training
8.5 Farm management deposits
8.6 Accelerated depreciation and grants for investing in preparedness
8.7 Income contingent loans
8.8 Assistance to develop insurance markets
Chapter 9 Farming family income support and adjustment
9.1 Introduction
9.2 Financial hardship and farming families
9.3 An income support scheme for farming families
9.4 The Commission's proposal for an income support scheme for farming families
9.5 Agricultural adjustment
Annex: Indicative eligibility levels for the proposed Farming Family Income Support Scheme
Government drought support (PDF - 2562 Kb)
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