National Drought Program Reform

The 2013 Intergovernmental Agreement on National Drought Program Reform was replaced by the National Drought Agreement, signed 12 December 2018.

Intergovernmental Agreement on National Drought Program Reform

The Intergovernmental Agreement on National Drought Program Reform was signed in 2013 by Australian, state and territory governments. Under the agreement, all governments are aiming to encourage farmers to better prepare for droughts and manage their business risks.

Detailed information on the new approach to drought programs can be found on Intergovernmental Agreement on National Drought Program Reform. The agreement outlines the key roles and responsibilities for each government in implementing the new approach. The agreement also includes a framework to guide decisions on the introduction of in-drought support.

A review of the IGA to assess its effectiveness was undertaken in 2017 by a working group comprising officials from all jurisdictions. The Agriculture Ministers’ Forum subsequently agreed the review report.

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Farm Household Allowance

The Australian Government’s main contribution to reform is the Farm Household Allowance which is now available.

The Farm Household Allowance provides assistance to farm families experiencing financial hardship, without the need for a drought or Exceptional Circumstances declaration. The allowance provides eligible farmers and their partners with up to four years of fortnightly income support.

Farm Management Deposits

The Farm Management Deposits (FMD) Scheme assists primary producers to deal more effectively with fluctuations in cash flow. It is designed to increase the self-reliance of Australian primary producers by helping them manage their financial risk, meet their business costs in low-income years and facilitate increased financial self-reliance.

Further information can be found on Farm Management Deposits.

Background

Successive reviews of drought policy and programs found that drought support based on the Exceptional Circumstances arrangements was inequitable and no longer appropriate. The Exceptional Circumstances arrangements ceased on 30 June 2014.

In 2008, a national review o​f drought policy was undertaken to inform decisions on how the government can better support farmers. The review included economic, climatic and social assessments. It 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 better plan and prepare for drought rather than waiting until farmers are in crisis before offering assistance.

In 2010, the Australian Government, in partnership with the Western Australian Government initiated a two-year pilot of drought reform measures in regions of Western Australia. This was in response to the national review of drought policy and tested a range of programs to inform the design of a new national approach. The pilot was reviewed in 2011 by an independent panel, which confirmed that a move to programs with a focus on risk management and preparedness was appropriate.

A summary of previous drought assistance arrangements and reviews can be found at History of Drought Policy and Programs.


Last reviewed: 4 November 2019
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