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Nation's farmers hit by drought.



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HON WARREN TRUSS MP MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY

AFFA02/256WT 23 September 2002

Nation’s farmers hit by drought

The severity of the drought gripping much of Australia was reinforced today with ABARE forecasting a $4.9 billion fall in net farm cash incomes this financial year, Federal Agriculture Minister Warren Truss said today.

“Gross value of farm production will be down some $6 billion, from $38.2 billion to $32.2 billion, and that will have an impact on many rural communities around Australia,” Mr Truss said.

“The flow-through effect of drought and a high Australian dollar on returns to farmers will also be felt in the cities as the downturn takes an estimated 0.5 per cent from Australia’s GDP growth.

“When a drought affects the country it has national implications. When farmers have no money to spend other businesses also suffer.”

Mr Truss said the past couple of years had been good in agriculture, and this has allowed many farmers to squirrel away a nest egg that will be invaluable in helping them through this downturn.

The Minister today released figures showing Australian farmers continued to demonstrate strong support for the Coalition’s Farm Management Deposits (FMD) as a drought-management tool.

“The latest figures show that, as at 31 March 2002, more than 24,000 farmers have invested around $1.08 billion in the scheme and that should provide a buffer that is complementary to other Federal Government drought relief initiatives,” Mr Truss said.

“The FMD scheme is a major component of Coalition drought policy and allows producers to set aside pre-tax income in good years for use in later years when it is needed — during a lower income, lower tax year.

“While last financial year was a record for farm earnings, with $12.5 billion in net farm income, not all farmers shared in the windfalls or were able to put income aside and therefore city people and city-based politicians should understand that there remains a need for governments to provide drought relief.

“By taking steps to even out the highs and lows of farm incomes, farmers help boost the viability and profitability of their businesses, which in turn help builds stronger rural and regional communities,” Mr Truss said.

Mr Truss said the FMD scheme’s broad acceptance was good news for Australian agriculture, as it shows that farmers are serious about planning ahead and becoming more self-reliant.

Farm Management Deposits are a tax-linked, financial risk management tool available to individual primary producers through eligible financial institutions. They allow farmers to receive tax benefits from funds deposited for at least 12 months.

Further information on the Farm Management Deposits scheme is available on the AFFA web site at www.affa.gov.au/fmds

Further media inquiries: Mr Truss's office, Tim Langmead (02) 6277 7520 or 0418 221 433

The Hon Warren Truss MP Media Office | Media Releases | Speeches

Last updated 24 September 2002

URL: http://www.affa.gov.au/ministers/truss/releases/02/02256wt.html Commonwealth of Australia 2002