Groups split over drought plan

Reports Melissa WilliamsCountryman

WA's farm lobby groups have divided opinions about the thrust of a new national drought package that focuses on preparedness, rather than crisis management.

WAFarmers is concerned the reform package, which will replace the Exceptional Circumstances (EC) system and come into effect in July 2014, will fail to provide support for producers during and after a drought and result in less money flowing into the farming sector during drought events.

But the Pastoralists and Graziers Association (PGA) is supportive of any new drought measures that encourage farm business planning and risk management to build more resilient primary production enterprises.

Commonwealth, State and Territory governments agreed at last week's Standing Council of Primary Industries (SCOPI) meeting in New Zealand on the framework for the new national drought package.

It will incorporate many initiatives tested through WA's Drought Pilot Program 1 and 2 from 2010 to 2012, which were funded by the State and Federal governments to the tune of about $75 million.

Central to the new drought reform measures are:

·A farm household support payment;

·Promotion of Farm Management Deposits and taxation measures;

·National farm business training;

·Social support services; and

·Farm decision-making tools and technologies.

Programs included in the package would be available at all times, without the need for a drought or EC circumstances declaration.

But there will be checks in place for bona fide primary producers and criteria for eligibility.

Until the new programs are implemented in 2014 there will be crisis assistance available for farming families suffering hardship, including income support measures and EC relief payments if an area is EC-declared before that date. Farmers remain eligible for Farm Management Deposits and can access rural financial counselling services.

WA Agriculture Minister Terry Redman said farmer access to rural financial counsellors was an acute issue in this State, which did not fare as well as other States in funding.

To address this, the State Government this week announced it would inject $400,000 to increase services through the Rural Financial Counselling Service until 2014 and provide $70,000 to the WA Council of Social Service to extend the Beyond Farming program for 2012-13.

Also in the interim to July 2014, the State Government will spend $2 million on providing Plan, Prepare and Prosper workshops and refresher courses for farmers.

Mr Redman said last week's national agreement on a framework to progress drought reform measures was a breakthrough and its proactive approach would help farmers to prepare for adverse conditions.

He said details of in-drought and post-drought programs to be included in the reform package might include expanding accelerated depreciation for infrastructure investments, other taxation incentives and new entrant support.

These details will be considered by the State and Territory governments, which will also need to agree to fund drought measures through budget processes.

A national partnership agreement for drought reform will need to be signed and Mr Redman said the cost of implementing the new package would depend on how much money each State and Territory was prepared to commit.

"It is hard to put a dollar figure on this, but we will be looking at it over the next 12 months," he said.

"The important thing is that we now have a framework in place and can progress the details."

Reflecting the learnings of the WA Drought Pilot schemes, Mr Redman said the new national package of drought measures would focus on a structural approach to farm business planning and development and also include farm household support through the Centrelink system to ensure crisis funding.

He said eligibility for farm household support in terms of asset parameters would need to be set and legislative change would be required.

"I welcome a move away from the 'lines on maps' approach of the EC scheme, under which receiving assistance could depend on what side of the road you lived on and where communities had to wait two consecutive years to make a claim for assistance," he said.

Mr Redman said drought measures used in the US, including low interest recovery and emergency loans and government-funded crop insurance schemes, effectively amounted to agricultural subsidies and would not be considered for Australia's new national scheme.

"We are focused on managing risk, rather than crisis management," he said. "I don't support subsidies, but building better farm businesses. If a multi-peril crop insurance scheme is developed, it should be privately funded, not government funded."

WAFarmers president Dale Park said Australia's future drought relief program should focus on measures for pre-event, in-event and post-event.

He said the national framework agreed to last week appeared to have a plan for pre-event measures, but lacked detail for in-drought and post-drought initiatives.

Mr Park said the overall approach to a new national drought plan appeared to be designed to save money for the government.

"What cannot happen as a result of the reform process is that less money flows into the sector," he said.

"We know that when a drought occurs, the Government will bow to pressure (and provide funds) and it is better that we plan for that before it happens."

Mr Park said WAFarmers would push for new drought measures to address the problems of increasing farmer debt to banking institutions, loss of farm equity position and the impact of these factors on the cost of future finance for farmers.

He said one of the best ways farmers could prepare for drought was to be making reasonable profits.

Mr Park said there could be some merit in a partially government funded multi-peril crop insurance scheme that could partly cover the costs of putting in a crop and the SCOPI could consider this in its deliberations.

PGA president Rob Gillam said any future crop insurance scheme should be totally privately funded.

Mr Gillam welcomed the preparedness approach of the new national drought policy framework and said the Drought Pilot in WA had been a successful trial of many good initiatives.

National Farmers' Federation president Jock Laurie said the new drought reform framework was a step in the right direction, but needed more commitment to providing assistance measures during cases of severe or prolonged drought.

"We believe an effective drought policy must focus on preparing farmers for the next drought during the good seasons as well as acknowledge there may be periods of drought in the future that will require more than ad-hoc policy response," he said.

"It has taken five years to get to this point and we cannot wait another five years until there is a policy outcome."

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