A $7.8 million assistance package from the West Australian government last year went to the well-off and did nothing to help needy farmers plant crops, according to the WA Farmers Federation (WAFarmers).
Farmers in the state's wheat belt, located from north of Perth to the mid-west region and east to the Goldfields, were struggling early last year following a poor start to the season. Almost no rain fell in June and July.
The Liberal state government provided cash to farmers with between 55 per cent and 65 per cent equity in their businesses, which is in keeping with the government's philosophy to help otherwise viable farms that have fallen on hard times.
But the president of the farmers' federation, Dale Park, whose wheat belt farm is near the coast in Badgingarra, said the money went into bank accounts, not crops.
"It meant that a lot of the ones who were struggling had a lot lower equity rates than that," he said.
"Hence the idea that the people who didn't really need it got the money."
Debate over government support
Droughts in eastern Australia have triggered a debate over whether governments should support the agricultural sector during times of crisis, and how support should be administered.
Separately, the WA government has introduced stricter criteria than other states for farms to qualify for the federal government-funded, reduced-rate loan scheme, to try to improve productivity.
WA and NSW are the biggest wheat-producing states in the country.
Despite dire warnings for wheat belt farmers in early 2013, conditions improved dramatically and many WA wheat farmers enjoyed their best season on record.
WA Minister for Agriculture and Food Ken Baston said the package was a successful emergency measure.
"That was basically to put food on the table and meet the wolves at the door," Mr Baston said. "Farmers were under stress and we helped to relieve that stress. Would government had given them the money if they had known a bumper crop was coming? Banks would have lent them the money and it wouldn't have been a problem."
About $6.8 million has been expended from the package, which includes cash payments of $25,000 to eligible farmers. There was also money for communities and organisations for social support and counselling services. Those exiting the sector can also apply.
Concessional loan scheme
As the state government's temporary assistance package winds down, WA farmers have started analysing the federal government's concessional loan scheme, released in WA last week.
Administered by the states, the WA government requires that farmers only use the concessional loans to improve their farms, and not for restructuring debt as farmers are allowed to do in other states. "They need to utilise that funding to show they are going to make a return," Mr Baston said. "That could be buying livestock, like sheep or cattle, or it could be putting new wings on your dam to collect more water, so you have a better secure supply of water."
Under the scheme, farmers can apply for loans between $50,000 and $200,000 at the concessional rate of 4.5 per cent.
A total of $50 million of federal money will be made available for WA farmers during 2013-14 and 2014-15.
Anne Garnett, a senior economics lecturer at Perth's Murdoch University, said the restrictions appeared harsh.
"The Western Australian government has probably placed a few too many restrictions – saying people can only access a loan for productivity enhancements is very strict when other states can use it to restructure debt," Dr Garnett said.