History of drought policy

Drought policy in the middle of the 20th century focused on attempts to ‘drought proof’ agriculture by expanding irrigation. In 1971, government policy shifted to recognise drought as a natural disaster. This allowed  affected people to be helped through joint Commonwealth-state Natural Disaster Relief and Recovery Arrangements.

In 1989, drought was removed from the Natural Disaster Relief and Recovery Arrangements. A review found that previous drought policy was:

• poorly targeted
• distorted farm input prices
• 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.

The policy set up these assistance programs:

• Rural Adjustment Scheme. It offered grants and interest rate subsidies.
• Drought Relief Payment. It 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 main way farmers were supported. For a drought to be declared an exceptional circumstance, it had to:

• be rare and severe (must not have occurred more than once every 20 to 25 years and must be significant)
• have resulted in a rare and severe downturn in farm income over a prolonged period (over 12 months)
• not be predictable or part of a process of structural adjustment.

Over time, the EC arrangements were shown to be inequitable. Eligibility was determined by ‘lines on a map’. Some farmers who experienced the same drought as their neighbours were located on the other side of a boundary line. This meant they could not access support.

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.

Between 1996 and 2000, these programs were introduced:

• Farm Management Deposits scheme (ongoing)
• Rural Financial Counselling Service (ongoing)
• FarmBis (discontinued in 2008)
• FarmHelp (discontinued in 2008).

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.

The Australian Government commissioned a national review of drought policy to guide decisions on how it could better support farmers. 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 review was informed by climatic, social and economic assessments of drought and drought assistance.

Exceptional Circumstances Report

The Bureau of Meteorology and CSIRO assessed the likely future climate patterns and the EC standard for drought as a 1-in-20-to-25-year-event.

• Read the final report.

Changing perspectives on dryness

An expert panel examined the social impacts of drought on farm families and rural communities. The 7-member panel delivered the final report in September 2008.

The report concluded there needed to be a new national approach to living with dryness, rather than dealing with drought. It suggested focusing support services on early intervention and the ongoing wellbeing of farm families, rural businesses and communities.

Download the report

Inquiry report

The 2 previous reports informed a Productivity Commission review into the economic assessment of drought support measures.

The Commission inquiry report was released in May 2009.

The report:

• found that EC declarations and related drought assistance programs did not help farmers improve their self-reliance, preparedness and climate change management
• recommended that farmers facing hardship should have access to a farming family income support scheme, regardless of drought
• placed primary responsibility for managing risks, including climate variability and change, with farmers.

From 1 July 2010 to 30 June 2012 the Australian Government partnered with the Western Australian Government to trial measures to support farmers and rural communities preparing for future drought rather than rely on assistance during drought.

In 2011, an independent advisory panel conducted a review of the initial pilot. The review confirmed that a move to programs with a focus on risk management and preparedness was appropriate. Another report was published in 2013 after the expanded pilot program ended. The pilot provided evidence to support the design of programs under the Future Drought Fund.

Download the documents

In May 2013, the Australian, state and territory primary industries ministers agreed the Intergovernmental Agreement on National Drought Program Reform (IGA).

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The IGA outlined the roles and responsibilities for implementing the new approach. The IGA recognised that farm businesses needed 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
• Rural Financial Counselling Service
• a nationally consistent approach to debt mediation
• an enhanced Farm Management Deposits scheme.

In 2017, a working group comprising officials from all jurisdictions conducted a review of the IGA to assess its effectiveness. It received 14 submissions.

The review saw the IGA replaced. In 2018, the Council of Australian Governments signed a new National Drought Agreement.

The 2015 White Paper set out the Australian Government’s roadmap of practical actions to grow the agriculture sector. The White Paper aimed to help farmers prepare for drought, not only from a business perspective but through better social and community support. The White Paper included initiatives for:

• improved seasonal forecasting
• tax measures and farm insurance advice
• risk assessment grants.

Funding was also announced for continued access to:

• concessional loans
• Farm Household Allowance
• Rural Financial Counselling Service 
• Farm Management Deposits Scheme.

On 12 December 2018, the Council of Australian Governments agreed and signed the first National Drought Agreement (NDA). This NDA set out a joint approach to drought preparedness, responses and recovery, with a focus on accountability and transparency. The agreement recognised the need to support farming businesses and farming communities to manage and prepare for climate change and variability. It focussed measures across all jurisdictions on bolstering risk management practices and enhancing long-term preparedness and resilience.

Progress in implementing the first NDA was reported annually. The NDA was also reviewed ahead of its expiry on 30 June 2024. The review report recommended changes to ensure farmers and farming communities are well supported before, during and after drought. It shaped the second National Drought Agreement (2024-2029) now in place.

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In 2019, the former Coordinator-General for Drought advised on how to:

• drive a comprehensive drought response
• help inform a long-term drought resilience and preparedness strategy.

The Australian Government took specific actions to address the Coordinator-General’s report and released a Drought Response, Resilience and Preparedness Plan the same year.

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The Australian Government released the Drought Response, Resilience and Preparedness Plan in 2019, during a multi-year drought in southeastern Australia. 

The plan was focused on 3 themes:

1. Immediate action for those in drought
2. Support for the wider communities affected by drought
3. Long term resilience and preparedness.

An implementation review of the Drought Response, Resilience and Preparedness Plan was undertaken for the period from July 2020 to June 2021. A fuller review began in 2022 as part of the process of developing a new plan. The Drought Response, Resilience and Preparedness Plan was superseded by the current Australian Government Drought Plan in 2024.

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