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Wednesday, 26 May 2010
Page: 4116


Mr BURKE (Minister for Agriculture, Fisheries and Forestry and Minister for Population) (9:35 AM) —I move:

That this bill be now read a second time.

The Farm Household Support Amendment (Ancillary Benefits) Bill 2010 amends the Farm Household Support Act 1992 to facilitate part of the government’s pilot of drought policy reform measures.

The government announced the trial in Perth on 5 May this year, along with the Western Australian Minister for Agriculture and Food, Terry Redman.

The trial turns the old system of drought support on its head.

It represents a new chapter in a long history of Australian governments grappling with the challenge of our harsh climate.

We want to remain world leaders in agricultural production and continue to grow productive farming industries.

But Australia is a dry continent and our farmers regularly face devastating natural disasters.

Exceptional circumstances relief has evolved significantly as successive governments tried to find the best way to help build more resilient farming communities.

In the early 20th century, many people saw irrigation as a silver bullet to inoculate farms against drought.

Commonwealth assistance evolved in a haphazard way, with states taking the lead on drought policy.

In the early 1970s, drought was recognised under joint Commonwealth and state natural disaster relief arrangements.

Within two decades, that approach was abandoned in favour of a stand-alone drought policy, separate to natural disaster relief.

A few years later, in 1992, Labor delivered a formal national drought policy, to encourage self-reliance for primary producers and protect the nation’s farming sector from an unpredictable climate.

In 1994, under then agriculture minister Simon Crean, Labor introduced drought income support payments and interest rate subsidies for farmers within areas defined as facing ‘exceptional circumstances’, or ‘EC’.

Criteria for EC included meteorological conditions, water supplies, farm income and the scale of the event.

Following a change of government, the coalition introduced a new rural policy package which maintained interest rate subsidies and relief payments and established some new measures.

The National Rural Advisory Council was given a role in defining an exceptional circumstances event.

Other recent coalition reforms include prima facie declarations to give farmers income relief while they wait for a formal EC decision and extending EC support to eligible small businesses.

These reforms over many years attracted bipartisan support, regardless of which party was in government.

We have consistently seen a genuine approach by both sides to try to navigate difficult policy issues, without the politics.

Once more the cracks are showing in the system.

Exceptional circumstances support is available for farms affected by drought events that must not have occurred more than once on average in every 20 to 25 years.

But with current climate projections, few people believe the next drought will be a one-in-20-to-25-year event.

Some farmers have reached the interest rate subsidy limit of $500,000.

Farmers in the most debt received the most assistance and we fail to recognise farmers who have made tough business decisions to stay out of debt.

Assistance is based on arbitrary lines on a map, meaning one farmer may be eligible while the neighbour over the fence misses out.

And when times are good the government disappears from view.

These are all significant flaws which show how the system is failing our farmers.

We must rebuild.

On this occasion, we are not sitting in the corner waiting until a crisis takes hold.

We want to move from crisis management and uncertainty to risk management.

We will trial a partnership with farmers to help them better prepare for future challenges and build more resilient farm businesses and rural and regional communities.

The old system contributes to mental health issues in these communities.

We want a new approach to addressing these mental health issues.

It is important to again emphasise that this trial does not affect farmers currently receiving income support payments and interest rate subsidies under the old exceptional circumstances system.

NRAC will continue its current role assessing new proposals for EC declarations from state governments and reassessing areas when current declarations come up for renewal.

The drought reform pilot will run for 12 months from 1 July 2010 to 30 June 2011.

It trials a new approach to drought support and maintains important crisis measures including:

  • Farm Family Support to help farmers meet basic household expenses
  • Support for farmers to develop or update a strategic plan for their farm business
  • Grants of up to $60,000 for on-farm activities and infrastructure and Landcare work
  • Grants to local government to make rural communities stronger areas in times of agricultural downturn
  • Access to a coordinated social support network
  • Farm exit support
  • A new measure that puts current farmers in touch with former farmers to talk about opportunities outside of farming.

A key part of our new approach is to test the idea of supporting farmers to develop a strategic business plan, tailored to meet the needs of their individual businesses.

Following that, they have a choice.

They can choose to stay on the land with dignity, or leave with dignity.

Either way, we will provide further support to eligible farmers—through the on-farm investment grants, or exit grants.

This is a dramatic shift in thinking.

Of course, any policy overhaul of this scale presents some risks.

In particular, we need to carefully test the new system of providing support to farmers to develop farm business plans.

The goal is to land on a system that helps farm businesses to deliver tailored plans, built around their individual farms.

The risk is that we create a whole new problem—a flood of rent-seeking consultants who complete fill-in-the-blank templates and pocket taxpayers’ dollars.

Courses and facilitators will be pre-approved by the Western Australian government, with the courses to run for up to five days.

We must move ahead steadily and methodically to get it right.

We expect to see a few hundred farmers producing strategic plans during the 12-month trial and having these independently assessed.

We would then expect around 150 of those to apply for the business grants.

These estimates have taken into account previous demand for other farmer training programs in Western Australia.

The business grants include Farm Business Adaptation Grants of up to $40,000 for eligible activities that support farm businesses to manage and prepare for the impacts of drought, reduced water availability and a changing climate.

These may include fencing, silos, on-farm processing systems, waste management systems or precision farming equipment.

The on-farm investment grants also include up to $20,000 for eligible Landcare activities.

This may include managing soil salinity, revegetation, re-fencing or improving wetland management.

Other parts of the trial involve more traditional methods of support.

For example, any of the 6,000 farmers in the trial region could seek counselling and a broad range of social support.

And we will trial an on-line counselling service for young people.

Farmers who meet a hardship test will be eligible for household support.

With this Farm Family Support measure, we want to make sure eligible farmers have access to the full range of so-called ‘ancillary’ benefits already available to other farmers receiving exceptional circumstances relief payments.

These include a healthcare card for recipients and their families and, if their dependent children claim youth allowance, exempting them from various assets and income tests, which increases their chances of being eligible.

To ensure these benefits are available under the trial, this bill amends the Farm Household Support Act 1992 to treat farmers receiving Farm Family Support as if they were receiving Exceptional Circumstances Relief payments.

The Rudd government believes in the strength, innovation and resilience of our rural Australia.

But these communities and farm businesses face unique challenges.

They need support to meet those challenges and to take advantage of new economic and social opportunities into the future.

I particularly commend Western Australian minister Terry Redman for his foresight and help in developing this trial.

As Minister Redman pointed out at the trial launch in Perth, no parts of Western Australia are currently in Exceptional Circumstances, and ‘The right time to have discussions about this is when people are not under’—drought-related—‘stress.’

I would also like to encourage the ongoing role key farming groups will play in highlighting the strengths of the trial and any areas which need further work.

As the National Farmers’ Federation President David Crombie said at the launch:

The National Farmers’ Federation has been working for some time with the Federal Government and a range of other bodies in looking at drought reform. We believe the idea of a trial is a very sound one.

The Western Australian Farmers’ Federation President, Mike Norton, also attended the launch, and said:

This plan starts to address some of those basic essentials that have been missing in a long-term strategic plan for agriculture.

Finally, a thought from Tony Seabrook, Vice-President of the Pastoralists and Graziers Association, who said:

I think the most critical thing that has happened is the recognition that it’s not just drought that brings pressure to farming families; there are a whole lot of other issues that can be just as damaging--such as frost, terms of trade and a high dollar value.

I hope the bipartisan approach to drought reform continues.

There is too much at stake for politics to get in the way.

This is a trial.

We do not pretend to have all the details right from the start.

That’s why we will test this major new approach in Western Australia before we consider what system may work nationally.

And we will monitor and review the uptake of each of the measures.

The pilot region covers a broad range of farming systems and climatic conditions.

It includes irrigated and dryland operations and covers parts of the wheat belt, rangelands and some horticulture industries.

This will give us a good cross-section of results and feedback.

Today is another milestone in the drought reform process.

We will continue working to deliver a system that boosts farm productivity and protects farmers’ dignity—whether it is working the land with dignity or leaving the land with dignity.

Debate (on motion by Mr Andrews) adjourned.