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 Drought aid condemned by Productivity Commission 

Drought aid condemned by Productivity Commission

13 May, 2009 10:25 AM
EXCEPTIONAL Circumstances assistance to drought-affected farmers should be abandoned as soon as possible as it is unfair, unnecessary and encourages poor farming practices, the Productivity Commission has said.

The commission's report into government drought aid, released yesterday, condemns the regime as inefficient and an inappropriate use of government funds.

"Drought assistance programs do not help farmers improve their self-reliance, preparedness and climate change management," the report by the Federal Government's commission found.

Only 23 per cent of Australia's 14,300 farms receive assistance.

Even in drought-declared areas, 70 per cent of farms survive unassisted.

The Government promised at the 2007 election to overhaul the $1 billion given annually to farmers in drought assistance, to help farmers prepare for climate change.

It was originally intended that reforms would be implemented by this July.

But there were no changes to drought assistance announced in yesterday's federal budget, with further negotiations with state governments and farmers' groups needed.

Studying the impact of government drought relief programs, the Productivity Commission found EC funding for farmers encouraged inefficiency and made farms less profitable.

It found that even in EC areas, farms that did not get government funding had lower levels of debt and more assets.

The commission said interest rate subsidies for struggling farms rewarded the businesses least prepared for drought.

"Discontinuing the National Drought Program altogether could potentially lead to greater recognition that long-term structural issues - rather than droughts - are often the root cause of financial difficulties faced by farm businesses," it said in its report.

Victorian Farmers Federation president Simon Ramsay said the VFF supported reform of the system, but a support system must replace it to help farmers deal with climate change.

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This is a bit of the pot calling the kettle black - the productivity commissioners are on purely public subsidised salaries. For them to sanctimoniously pointing the finger at rural people, who have been through absolute hell is a wretched thing to do...if they want to save public money they can start by getting rid of their own useless, unproductive incomes.

For the VFF to back them like well trained monkeys is to explain why that organisation has been abandoned by its membership.

Posted by Ken, 13/05/2009 9:04:10 PM
The best 'help' the federal government could give farmers in Tasmania (as well as in the rest of Australia) is to get an application processed in the first place. Our local/state Department of water has too many officials who apply their low grade semi-scientific worry as obstruction...meaning it is almost impossible to get a dam of much value approved.

And there is a 'taboo' against building a dam in-stream...where else would one want to build a dam?

I liken their 'mandate' to having a group of Roman Catholic nuns in charge of an abortion clinic...result, no abortions!...few dams.

There is a confusion with 'dam', and 'damn'! But, I do not mean to insult these nuns.

Maybe Peter Garret should go back to singing, and I will do the job...we need to drought-proof Australia by setting out a series of water storage, and water reticulation programs.


Posted by valerie, 14/05/2009 5:20:45 AM
Where do these number crunchers get of? Forget the drought side of this problem - it has been over-allocation by all State governments that has caused this problem - drought only brought the problem to the surface quicker.

As yet I have not heard of any compensation for the loss farmers are bearing - besides the exit with dignity $150,000 - for some of us that may pay the bills - what about your life's work, isn't that worth anything?

Saying I heard recently: "Work with dirt, you get treated like dirt"

Posted by SteveB, 14/05/2009 5:30:18 AM
The commission's report has quite a bit of false information - they need to do some more research before submitting such reports.

Did they take into account that some farms didn't need the assistance as the properties were handed down through families and therefore had no debt to start with?

Also, the remaing farms needing the assistance has helped out and get drought affected properties back on their feet and in the meantime drought proofing their properties?

I could go on and on...but they should get more reliable sources before submitting their reports.

Posted by Shelly, 14/05/2009 7:12:06 AM
"Long term structural issues..." Do they include being price takers and not price makers; being squeezed by monopolistic supermarkets; being bludgeoned by overseas animal rights terrorists, er, campaigners in our offshore wool markets; putting up with costs rising over and above that demanded in the cities for declining or non-existent services; watching rural health services disappear and our wives having babies in toilets; paying extortionate prices for fuel; having our agricultural research funding cut by 30pc in the latest budget; onerous and baseless regulation drawn up by city centric politicians; Julia Gillard in the industrial relations portfolio; destructive science practices being applied to land sustainability in the Murray Darling Basin promoting draining of water tables to supposedly drain salt (what rubbish!); recalcitrant State Premiers who refuse to agree to an all encompassing MDB agreement in the interests of Australia, not their supposed "Nation States" (read Qld and Vic...and so on?

Are these the 'long-term structural issues' the shiny backsides at the Productivity Commission are referring to?

Please. Come up with some good ideas instead. I'm all for positive reform but just quoting 'long-term structural issues' with no decent remedial proposals is the same as Kevin Rudd saying, "I'm from the government and I'm here to help."

Posted by mbh, 14/05/2009 7:59:13 AM
Until we can start working well together, the above deterioration in the environment and economic outlook for farmers will continue. As farmers, we are belting our head against a brick wall with the agencies delivering NRM...they are so out of tune with the natural ecology system.
Posted by concerned, 14/05/2009 8:26:20 AM
Interesting! Perhaps there are farmers out there who should leave the industry. Yes there are farmers out their who don't need assistance to get through the drought.

But many of those have enormous off-farm income and like the Productivity Commission are experts in telling those of us who haven't yet accrued off-farm assetts or major off-farm income how unviable we are.

We need younger farmers but we need to support them.

A few farmers are fortunate enough to still own the properties that were granted to their families which they have carefully mangaed and built up, they have minimal debt and therefore may not need help to survive drought.

If a person working in the private sector loses their job or has their hours drastically cut, they are entitled to Social Security benefit. Why are we any different? You can plan and save all you like but a drought like the one currently experienced in Tasmania is beyond planning for.

Posted by Helen Clark, 14/05/2009 8:34:55 AM
How about governments look at restructuring their depreciation system so that items that we need to become 'more sustainable' are actually able to be depreciated quicker than the 25 year system that we have now.

If we purchase a silo or infrastructure for better water reticulation or haysheds it takes 25 years for us to see the whole of our expenditure come back to us in our tax.

Bring that time frame back to 10 years and we might be getting somewhere.

There has to be balance in these systems and unfortunately our governments don't seem to think that this is something that they should address.

Posted by jo, 14/05/2009 8:37:03 AM
The Productivity Commission's shiny bums are echoing the call by CSIRO to kick farmers off the so-called marginal land.

While there are plenty of farmers who mistreat their soil, the majority in all types of climate are sustainable. Farmers need sustainable solutions not handouts.

Firstly, government control of water denies farmers access to sustainable supplies, for example deep fractured rock water and establishment of ponds to hydrate their soils.

Secondly, farmers who need government assistance need to accept public help on the condition that they change farming practices, for example convert to biological farming or receive no public monies.

Posted by Mangiri, 14/05/2009 8:39:02 AM
My next door neighbour (EC recipient) told us (EC denied) that we should have stayed home and not sourced off-farm income through outside work to get us through.

Knowing that the Govt will give a handout when it gets tough is not sustainable. Are we turning into a welfare state?

Posted by disillusioned, 14/05/2009 10:01:17 AM

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