WITH pockets of the state absolutely parched - and with the 2013 intergovernmental agreement on drought set for renewal - it’s only natural for farmers to question if the current support structures are working.
For Australian Farm Institute general research manager Richard Heath it’s a tough question.
One, because there are always exceptions to the average.
Two, because the relatively rude health of agriculture – and the post-2013 support mechanisms centered on preparedness and resilience – have not been tested by something as severe as the Millennium drought.
But he said building strong farms was surely a better long-term solution than a quick, isolated cash fix.
“There’s always temptation from a political level to say ‘throw money at it’,” he said.
“It’s a stop-gap political measure. Properly supporting farmers through truly exceptional circumstances involve building ongoing systems of support, better farm businesses.”
He said broadly, the reported $5 billion sitting in farm management deposit schemes, was a positive sign.
“That’s a lot that has been put away,” he said.
“The cynic might say it’s a good tax minimisation capability, but it is a good sign that farm businesses are understanding it’s something they need to look at.”
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Since 2010 governments have moved away from ‘crisis grants’ and spruiked a strategy of preparedness and resilience, via a mix of low-interest loans, business training, counselling, and improved weather forecasting.
The 2013 Intergovernmental Agreement on National Drought Program Reform expires on June 30, with state and federal ministers understood to be in negotiations.
Current federal support includes the Farm Household Allowance, Drought Assistance Concessional Loans and Business Improvement Loans, as well as the Rural Financial Counselling Service.
In the NSW drought package, the Farm Innovation Fund provides low-interest loans for capital works up to a value of $250K for infrastructure to prepare for dry conditions. Three quarters of the Fund has been allocated this financial year with $15 million remaining.
Donated fodder and animal welfare transport subsidies are also available in NSW.
Some, however, say the NSW system should mimic Qld, with Shooters, Fishers and Farmers Upper Hunter spokesman John Preston calling for state subsidies for fodder, transport, rates, taxes, water, charges and child care.
NSW Labor ag spokesman Mick Veitch called on government to go a step further and extend the due date for LLS levies, which were due on Monday, until dry conditions lifted.
He also backed a targeted assistance program for different industries and commodities.
Meanwhile, Mr Heath said it would be interesting to watch by how much government policy will be superseded or become irrelevant by commercial products that help manage climate risk.
“What we’re seeing globally already is an abundance of data and weather statistics, and weather risk products, that I think will really provide a marketplace to deal with it rather than expect there needs to be a government solution to it,” he said.
“Whether or not they are economic is an entirely different matter, but it will show the price of risk of farming in those marginal environments.
“It will be quite interesting to see how a more definitive measure of risk and cost of insurance develops.”