OPINION PIECE: Drought policy

The Prime Minister begins a drought tour this week but will any policy substance emerge?

On May 3, 2013, the Commonwealth and the States and Territories entered into a new CoAG agreement on drought policy.

The Intergovernmental Agreement on National Drought Reform enjoyed both the unanimous support of the nine Governments and the support of the National Farmers’ Federation and other key farm representative groups.

The Agreement was in part driven by a 2009 Productivity Commission (PC) inquiry into then existing drought policy. The inquiry found that in 2007-08, 23 per cent of Australia’s 143 000 farms received drought assistance totalling more than $1 billion. .

The PC argued that former Exceptional Circumstance (EC) declarations and related drought assistance programs did “not help farmers improve their self-reliance, preparedness and climate change management”.

It further concluded: “the EC declaration process is inequitable and unnecessary.”

State and Territory Governments agreed a new approach was needed. Five key objectives were agreed:

1. Assist farm families and primary producers adapt to and prepare for the impacts of increased climate variability;
2. Encourage farm families and primary producers to adopt self-reliant approaches to manage their business risks;
3. Ensure that farm families in hardship have access to a household support payment that recognises the special circumstances of farmers;
4. Ensure that appropriate social support services are accessible to farm families; and,
5. Provide a framework for jurisdictions’ responses to needs during periods of drought.

Clause 17 of the Agreement states:-

The parties will report against their roles and responsibilities in this agreement and their implementation plans annually during the operation of the agreement. Reports are to be provided for consideration at Primary Industries Standing Committee (PISC) and Standing Council on Primary Industries (SCoPI) meetings.

The Coalition won office four months later. Unfortunately one of its first acts was to abolish SCoPI and the PISC, two key CoAG committees.

The Intergovernmental Agreement will expire on July 1, 2018. In the absence of a CoAG process, next to no work has been done toward a new Agreement. Nor has any work been undertaken to measure the success of the current Agreement.

Farmers on Farm Household Support (unemployment benefit for farmers) are reaching the end of a three-year-long period of assistance. What will drought-affected famers do now? The Turnbull Government says they should apply for a concessional loan. But more debt is simply not an option for most.

To be fair, the Government has improved a tax scheme which encourages farmers to put money away in good times for use in tough times. It has also enhanced accelerated depreciation arrangements for farmers investing in water infrastructure. The problem is: neither of these schemes help drought affected farmers who simply have no money to invest or save.

The CoAG process must be restored. Its abolition was a terrible mistake.

Only then can we put drought policy back on track. The objectives agreed to in 2013 should be reviewed but they appear to be as relevant today as they were then.

Drought can no longer be viewed as an “abnormal event”. The main focus for policy makers and farm leadership groups must be helping farmers build resilience.

Tax concessions for drought proofing will no doubt remain part of the plan. So too will income support in times of need. The decision to limit the period over which farming families could secure income support may have been appropriate but not in the absence of other strategies to reduce on-going dependence.

The foundation for any drought policy must be adaptation and the embrace of better natural resource management practices. More market-based programs are needed to incentivise a focus on soil health, water efficiency and carbon abatement.

Of course you can’t expect a Government to act on a changing climate if it doesn’t believe the climate is changing. That recognition would be an important first step.

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