THEY say the worst time to develop new policy is during a drought, and that’s just what the Federal Government is doing with its extension to the Farm Household Allowance (FHA) program from three years to four.
While the social welfare extension doesn’t fundamentally undermine the national preparedness policy which the Coalition Government is developing, don’t expect to see direct subsidies for producers from the Commonwealth.
The key motivator for the FHA extension is the fact that as of May, there were around 2300 people across the country who had exhausted their three years on the program, as the dry persists in areas of Australia.
About 2000 people currently receive an FHA and about 8000 used the program overall.
A Bill has been introduced to parliament to effect the change to FHAs, which is expected to cost about $30 million.
FHAs were established as a three-year welfare payment for drought-hit farmers, subject to an income and assets test, providing a single rate of $529 a fortnight and $477 a person for couples.
FHA’s are part of a policy push towards assistance for drought preparedness and away from the old Exceptional Circumstances program.
Speaking after the FHA announcement, Federal Agriculture Minister David Littleproud reiterated his Government’s position that the States are responsible for funding direct drought payments, but said the tough conditions showed the need for the social programs like the FHA.
He also put financial organisations on notice over their advice to farmers and called for banks to recognise agriculture’s potential.
“The stark reality of the market economy is that some people don’t make it through to the other end,” Mr Littleproud said.
“No one is owed a living, but they need to be treated with dignity and respect when that happens.”
A policy roundtable with farming organisations will be set up to develop future drought policy so “we aren’t left pointing fingers in the middle of a drought”.
“We need to take everyone on a journey, for all of us to take responsibility for their response to drought. That’s what I want my legacy to be on this issue,” Mr Littleproud said.
That legacy will hinge on the success of federal policy to encourage farmers, and to some extent State governments, to prepare for drought.
A key preparedness investment was born in Barnaby Joyce’s ministry.
The Regional Investment Corporation, which opens on July 1, will offer up to $4 billion in concessional loans for farm infrastructure.
Mr Littleproud said it created an opportunity to deliver consistent lending policy between States and the Commonwealth.
Banks, financial institutions and accountancy bodies have an important role with their clients, “to improve financial literacy so we’re making decisions on the first day it doesn’t rain”, he said.
He also singled out banks for their “crazy” attitude to agriculture.
“One of my biggest worries is the amount of money coming into agriculture.” Mr Littleproud said.
“Banks are saying they’d rather lend $52 billion to Australians on credit cards, (than) to our $60b industry. That’s insanity.”
Resilience to climate change was a feature of politicians’ talk on a recent drought tour, which continued a theme that has emerged for the Coalition since Mr Joyce vacated the portfolio.
In March, Assistant Agriculture and Water Minister Anne Ruston said agricultural industries should drive their own response to adapt to the impacts of global warming.
In May Mr Littleproud announced an interstate agreement to develop a national plan to tackle climate change.
“The climate will continue to change, it always has, and I don’t care if it’s man-made or not. We need to be smarter with our investments to make sure we are giving farmers the best opportunity to be prepared,” Mr Littleproud said.