Rural affairs - Drought measures


Budget Review 2010-11 Index

Budget 2010–11: Rural affairs

Drought measures

Peter Hicks

The 2010–11 Budget provides funding for both a continuation of existing drought assistance arrangements and a trial of new support measures to be conducted in part of Western Australia (WA).

Ongoing arrangements

The main component of the suite of ongoing drought assistance arrangements continues to be Exceptional Circumstances (EC) assistance. EC assistance provides both income support to households and business support in the form of interest rate subsidies. Almost all EC assistance goes to farmers, with farm dependent small businesses the recipients of the remainder.

Table 1 provides estimates of Commonwealth spending on existing drought support measures in 2009–10 and 2010–11.[1] Attention is drawn to the comments at the end of the table. The reduction in estimated spending on existing drought support programs from $752 million to $410 million reflects the substantial improvement in seasonal conditions over much of eastern Australia’s agricultural areas. Between May 2008 and May 2010 the proportion of agricultural land which is EC declared has fallen from 56 per cent to 29 per cent.[2]

The Government advises that no current EC declarations extend beyond 30 June 2011 and that for any areas subsequently declared as EC or any EC declarations which are extended, additional funding will be provided.

WA trial of new measures[3]

The trial of new support measures in WA was announced by the Minister for Agriculture, Fisheries and Forestry on 5 May 2010 and will commence on 1 July 2010.[4] The purpose of the trial is to:

test a range of new measures, including farm planning, on-farm investment, farmer training, family income support and community grants.

and

grants of up to $60,000 will be available to eligible farmers to invest in on-farm projects which help them adapt to future challenges, including fencing, precision farming equipment and natural resource management work.

The trial is part of:

the Rudd Government’s plans to deliver an improved drought support system which better supports farmers, their families and regional communities.[5]

The trial region essentially covers the agricultural production region in WA south from approximately Port Headland with the notable exception of the higher rainfall areas in the south-west corner. It encompasses 67 local government regions. A map of the trial region is available on the DAFF website.[6]

A brief outline of the Government’s drought policy review was provided in the Library’s Budget Review 2009–10.[7]

The Budget provides $18 million for the trial over five years including 2009–10, with $11 million of this to be spent in 2010–11.[8] Significant elements of the trial include:

  • Building Farm Businesses (BFB) – this is the main component of the trial with up to $8.4 million to be allocated in combined grants of up to $60 000 to assist eligible farmers prepare for climate change and reduced water availability. BFB comprises Farm Business Adaptation Grants of up to $40 000 and Landcare Adaptation Grants up to $20 000
  • Farm Family Support – $4.9 million is available for income support for eligible farmers experiencing hardship
  • Farm Planning – $3.6 million will fund farmers to develop strategic business plans identifying priority activities to improve the management and preparedness of the farm business to respond to future challenges. Individual grants will be up to $7500 and
  • Farm Exit Support – $0.3 million is available for farmers in significant financial difficulty who decide to sell their farm. Eligible farmers will receive up to $170 000.

The planning component of the trial will be funded by the WA Government which is contributing $5 million to the trial, bringing total funding to $23 million.

The Government has yet to advise:

  • the definition of hardship that will be adopted for the WA trial
  • whether legislative changes will be required to give effect to the trial, and
  • how the trial will be evaluated.

Table 1: Estimated(a) Commonwealth spending on drought support 2009–10 and 2010–11 ($m)

Drought support measures

2009–10

2010–11

EC assistance for primary producers and small business

613.1

320.1

Interim income support for primary producers and small business

0.5

Professional advice and planning

28.0

17.5

Re-establishment assistance

24.3

24.4

Transitional income support(b)

13.9

Drought assistance for schools(c)

26.0

0.0

Family support drought response teams

7.6

7.7

Rural support services(d)

11.8

4.7

Mental health support for drought-affected communities

5.2

5.5

Assistance for isolated children

26.0

7.7

Total drought support measures

742.5

401.5

DAFF drought support program expenses

9.2

8.0

Total estimated drought spending

751.7

409.5

(a) Estimates compiled by the Parliamentary Library from published Budget documents. A '-' does not necessarily mean a measure is not being funded but rather that relevant information has not been located. Consequently the table probably slightly under-estimates drought spending.

(b) Transitional Income Support being funded from within existing DAFF resources in 2010–11.

(c) As the list of drought support programs identified by the Government for a 12 month extension to 30 June 2011 does not include assistance to schools it is assumed to have ceased.[9]

(d) Rural Support Services being funded from within existing Centrelink resources in 2010–11.

Sources: DAFF and Treasury components of the figures are from their respective 2010–11 Portfolio Budget Statement (PBS). Figures for other agencies involved in drought programs (DEEWR, FaHCSIA, Centerlink, DHA) figures are drawn from Budget Paper No. 2 and respective PBSs. The full list of sources is provided in Endnote 1. As no updated spending figures for 2009–10 have been found for some of the smaller drought programs from those announced in the 2009–10 Budget, these figures have been included in the table


[1].    The figures used in this brief, including for the compilation of estimates in Table 1 have been taken from the following documents unless otherwise sourced:

Australian Government, Budget measures: budget paper no. 2, 2010–11, Commonwealth of Australia, Canberra, 2010, pp. 85–89, 135, 174, 212, and 257, viewed 17 May 2010, http://www.budget.gov.au/2010-11/content/bp2/download/bp2.pdf

Australian Government, Portfolio budget statements 2010–11: budget related paper 1.1: Agriculture, Fisheries and Forestry portfolio, Commonwealth of Australia, Canberra, 2010, pp. 27 and 59, viewed 17 May 2010, http://www.daff.gov.au/__data/assets/pdf_file/0009/1629423/budget-daff-2010-11.pdf

Australian Government, Portfolio budget statements 2010–11: budget related paper 1.18: Treasury portfolio, Commonwealth of Australia, Canberra, 2010, pp. 21 and 43, viewed 17 May 2010, http://www.treasury.gov.au/documents/1791/PDF/00_Treasury_PBS_combined.pdf

 Australian Government, Portfolio budget statements 2010–11: budget related paper 1.12: Human Services portfolio, Commonwealth of Australia, Canberra, 2010, p. 52, viewed 17 May 2010, http://www.humanservices.gov.au/resources/budget/2010-11-pbs-complete.pdf

Australian Government, Portfolio budget statements 2010–11: budget related paper 1.6: Education, Employment and Workplace relations portfolio, Commonwealth of Australia, Canberra, 2010, p. 135, viewed 17 May 2010, http://www.deewr.gov.au/Department/Budget/Pages/1011PBS.aspx

[2].    A Burke (Minister for Agriculture, Fisheries and Forestry), Drought reform trial; current support continues across Australia, media release, 11 May 2010, viewed 14 May 2010, http://www.maff.gov.au/media/media_releases/2010/may/drought_reform_trial_current_support_continues_across_australia

[3].    In addition to the sources cited in Endnote 1 this section includes information drawn from: Department of Agriculture, Fisheries and Forestry (DAFF), ‘Pilot of drought reform measures in Western Australia’, DAFF website, viewed 17 May 2010, http://www.daff.gov.au/agriculture-food/drought-pilot

[4].    A Burke (Minister for Agriculture, Fisheries and Forestry), Start of a new era in drought support with Western Australian trial, media release, 5 May 2010, viewed 14 May 2010, http://www.maff.gov.au/media/media_releases/2010/may/start_of_a_new_era_in_drought_support_with_western_australian_trial

[5].    Drought reform trial; current support continues across Australia, op. cit.

[6].    Department of Agriculture, Fisheries and Forestry (DAFF), ‘Pilot of drought reform measures in Western Australia’, DAFF website, viewed 19 May 2010 http://www.daff.gov.au/agriculture-food/drought-pilot

[7].    Australia, Parliamentary Library, Budget review 2009–10, Research paper, no. 33, 2009–10, Parliamentary Library, Canberra, 2009, viewed 17 May 2010, http://www.aph.gov.au/library/pubs/RP/BudgetReview2009-10/Rural_Drought.htm

[8].    See: Budget paper no. 2: 2010–11, op. cit., pp. 88–89.

[9].     Drought reform trial; current support continues across Australia, op. cit.

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