WAFarmers Pushing for Improvements to the State and National Drought Programs

The state and federal governments have been slowly easing farmers and pastoralists off government drought support for the past thirty years. In 1989 the government removed drought from the list of natural disasters such as cyclone and floods which marked the beginning of the end for on farm financial support for when the rains don’t come.

The first national drought policy was enacted in 1992 which centered around the controversial exceptional circumstances (EC) provisions of the Rural Adjustment Scheme, which were aimed at supporting farm businesses by subsidising up to 100% of the interest paid on commercial loans.

A drought relief farm income payment was added to the policy in 1994 however the EC program was plagued by problems around defining when a drought moved from a normal, to an exceptional circumstance and what became known as the lines on a map problem, who was in and who was out, the scheme was wound up in 2009. In 1999 farm management deposits were introduced set at $400,000 then doubled in 2016 to $800,000 following calls from WAFarmers to reflect the growing size of farm businesses.

Today despite all the noise around drought the one message that is clear from state and federal governments which is that farmers have to self-fund their farm businesses through drought, governments won’t be the lender of last resort.

Of the programs on offer, the Commonwealth funds the farm household allowance scheme offering up to $13,000pa for up to four years, they also offer drought loans of up to $2m at 3.11% interest from the newly established Regional Investment Corporation Bank plus the On Farm Water Infrastructure Rebate of 25% up to $25,000. At a state level there is access to the Rural Financial Counselling Service and the Farm Debt Mediation Scheme.

WAFarmers have been calling for some additions and improvements to government drought policy incl:

  • $100m Strategic Town Water Supply Upgrade the town water supply system to build strategic water reserves targeting town dams, catchments, pipes, pumps and tanks.
  • $15,000 State Farm Water Supply Rebate should be reinstated until the state government can guarantee that town water supplies are available without long waits at standpipes during droughts.
  • Concessional Water Standpipe Pricing should be reinstated for shires in drought.
  • $2m Feral Animal Cull the camels are out of control and a coordinated cull is required to bring their numbers down across the Southern Rangelands.
  • $100,000 Farm Asset Instant Tax Write Offs should be increased from $30,000 to $100,000 for water related on farm investment.
  • Farm Management Deposits Increase the FMDs cap to $2m and reduce the tax rate on withdrawing farm management deposits to 25% in drought impacted regions.
  • $1m pa Rural Financial Counselling Service increase funding for the RFCS and extend it to include country businesses and provide annual drought preparation planning seminars to farmers.
  • Farm Income Protection Insurance – Examine options for a government backed Farm Income Protection Insurance Scheme that will give farmers access to additional credit and lower interest rates to recover from drought. Social security is not the key to surviving drought, rather access to additional credit is the missing ingredient, the option exists for the government to reallocate the $200m Farm Household Scheme into a program that releases bank capital for those who are deemed by banks as high risk so they can keep farming.

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