Subsidy transition to be a long term process

This drought has made it clear more than preparedness needed


Opinion
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With the Intergovernmental Agreement on National Drought Program Reform having expired on July 1, the recent announcements of subsidies and drought support are a reminder that preparedness alone is not enough.

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It is good to see the state and federal governments have realised they can’t ignore the drought any longer and that more than preparedness measures are needed.

Some farmers have been feeding stock for two years now and others are staring down the barrel of a second consecutive year without a harvest.

There is a limit to how far preparedness can last.

The former federal government and the NSW government in 2013 signed the Intergovernmental Agreement on National Drought Program Reform, and in doing so moved away from subsidies. 

While many recognised the need for this transition, the Coalition inherited the changing situation knowing it would need progressing, but let it fall by the wayside.

The NSW government led the way on ditching transport subsidies for fodder, water and livestock, and this wasn’t being balanced by federal measures that farmers needed to help make the transition.

Nor has it been acknowledged how long it might take to transition the industry.

By not progressing the drought plan, the federal Coalition has now been caught short. 

Meanwhile, even with a few good years, a lot of producers who may have wanted to put in place more preparedness measures had debts from the previous drought to pay down, which limited cash in hand despite good commodity prices.

That was before they got to a point of having surplus cash flow to deposit into a farm management deposit.

For those who were able to put money into a FMD, how much of it got to be used on farm innovation or drought preparedness before it was needed to keep afloat in this drought?

The strategies are good, but it’s a slow road to a point where farming won’t occasionally need support.

For many areas of NSW, farmers are experiencing record dry periods.

Now we’re in this drought, and with the immediate outlook not so great, the support, including the federal government’s promise of more measures to come, is now necessary for a lot of people to simply make it week to week.

As for the drought agreement, our governments might need to take a longer term approach and will hopefully now realise a transition away from some sort of subsidies will take longer than a couple election cycles.

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