History of Drought Policy and Programs
Drought policy in the middle of the 20th century focused on attempts to ‘drought proof’ agriculture through the expansion of irrigation. In 1971, government policy shifted to recognise drought as a natural disaster, enabling support for those affected to be provided under the joint Commonwealth-state Natural Disaster Relief and Recovery Arrangements.
In 1989, drought was removed from these arrangements and a review undertaken, which determined that previous drought policy was poorly targeted, distorted farm input prices and worked as a disincentive for farmers to prepare for drought. The response to this review was the National Drought Policy, announced in 1992. The objectives of the National Drought Policy were to:
- encourage primary producers and other sections of rural Australia to adopt self-reliant approaches to managing for climate variability
- facilitate the maintenance and protection of Australia’s agricultural and environmental resources base during periods of climatic stress
- facilitate the early recovery of agricultural and rural industries, consistent with long-term sustainable levels.
Under the National Drought Policy, a number of assistance programs were introduced. The Rural Adjustment Scheme offered grants and interest rate subsidies and the Drought Relief Payment provided income support for farmers within declared Exceptional Circumstances (EC) areas. In 1997 these programs became the EC Interest Rate Subsidy and the EC Relief Payment.
Between 1997 and 2012, EC arrangements were the primary mechanism for supporting farmers under the National Drought Policy. For an event, such as drought, to be declared an exceptional circumstance, it had to:
- be rare and severe, that is it must not have occurred more than once on average in every 20 to 25 years and must have been of a significant scale
- have resulted in a rare and severe downturn in farm income over a prolonged period of time (that is, greater than 12 months)
- not be predictable or part of a process of structural adjustment.
Over time, the EC arrangements were shown to be inequitable, particularly because eligibility was determined by ‘lines on a map’. The decision to close the EC programs was based on successive reviews of drought policy which found that EC assistance was ineffective and could result in farm businesses being less responsive to drought conditions. On 30 April 2012, the last EC declarations lapsed. There have been no EC declarations since.
Other programs were also established under the National Drought Policy between 1996 and 2000, including the Farm Management Deposits scheme, the Rural Financial Counselling Service, FarmBis and FarmHelp. FarmBis and FarmHelp were discontinued in 2008.
The National Review of Drought Policy
In 2008, Australian, state and territory primary industries ministers agreed that drought support based on EC was no longer appropriate in the face of a variable climate. In the same year, the Australian Government commissioned a national review of drought policy to help inform decisions on how it could better support farmers.
- An economic assessment of drought support measures was undertaken by the Productivity Commission. The report was publicly released on 12 May 2009; for further information please refer to the Productivity Commission.
- An Expert Social Panel was appointed to examine the social impacts of drought on farm families and rural communities. The seven member panel prepared A Report to Government, It’s About People: Changing Perspectives on Dryness in September 2008.
- A climatic assessment was undertaken by the Bureau of Meteorology and the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The assessment looked at the likely future climate patterns and the EC standard of a one-in-20-to-25-year-event. The report, An assessment of the impact of climate change on the nature and frequency of exceptional climatic events PDF [2.5 MB, 37 pages] was released in July 2008. For further information please refer to the terms of reference or the Bureau of Meteorology or CSIRO websites.
The review found that drought conditions in Australia were likely to occur more often and be more severe. It also recommended that drought assistance programs be restructured to help farmers prepare for drought rather than waiting until they are in crisis to offer assistance.
The WA Drought Pilot
From 1 July 2010 to 30 June 2012 the Australian Government, in partnership with the Western Australian Government, conducted a pilot of drought reform measures in parts of Western Australia. The pilot tested a package of new measures developed in response to the national review of drought policy.
At the conclusion of the pilot, the Australian Government Department of Agriculture along with other members of the Pilot of Drought Reform Measures Working Group compiled the ‘Pilot of Drought Reform Measures in Western Australia’ PDF [1.6 MB, 59 pages] DOCX [682 KB, 59 pages].
The Intergovernmental Agreement on National Drought Program Reform (IGA)
In May 2013 the Australian, state and territory primary industries ministers agreed the Intergovernmental Agreement on National Drought Program Reform (IGA). The IGA outlines the roles and responsibilities for implementing the new approach. The IGA recognises that farm businesses need to prepare for drought, rather than rely on governments’ response as an exceptional circumstance.
In 2013, the Australian Government also announced the delivery of the farm assistance package which included access to concessional loans, the Rural Financial Counselling Service, a nationally consistent approach to debt mediation and an enhanced Farm Management Deposits scheme.
The Agricultural Competitiveness White Paper
The White Paper, released on 4 July 2015, sets out the Australian Government’s roadmap of practical actions to grow the agriculture sector. The white paper aims to help farmers prepare for drought, not only from a business perspective but through better social and community support. A number of initiatives were announced in the White Paper including improved seasonal forecasting, tax measures and farm insurance advice and risk assessment grants. Funding was also announced for continued access to concessional loans, Farm Household Allowance, the Rural Financial Counselling Service and Farm Management Deposits Scheme. More information on the White Paper can be found on the Agriculture Competitiveness White Paper website.
The National Drought Agreement
On 12 December 2018, the Council of Australian Governments agreed and signed a new National Drought Agreement (NDA). The NDA sets out a joint approach to drought preparedness, responses and recovery, with a focus on accountability and transparency. The agreement recognises the need to support farming businesses and farming communities to manage and prepare for climate change and variability. It focusses measures across all jurisdictions on bolstering risk management practices and enhancing long-term preparedness and resilience.
For information on the types of assistance currently available, please visit Assistance Measures. A range of other support programs, not directly associated with the National Drought Policy, are also available to farmers through the Australian and state and territory government.
For information on drought and farmer assistance call the Drought and Farmer Assistance hotline on 13 23 16.
For more information contact the Australian Government Department of Agriculture by phone on 1800 900 090 or email.