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National Drought Roundtable: opening address, Parliament House, Canberra.

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National Drought Roundtable - opening address

Parliament House, Canberra, Wednesday 14 April 2004

Welcome everyone and thank you for coming to Canberra for this perhaps once-in-a-generation opportunity to reform the way we prepare for and manage drought in this country. Drought Policy Reform is one of the major opportunities that we as Governments and industry organisations have to assist rural and regional Australia meet the challenges of farming in our dry country.

Over the past two years, many Australians have had to wrestle with the implications of a major drought that stripped $6.6 billion in earnings or one per cent of the GDP of our nation - the biggest dent any drought has put in our post-war economy. And the drought is not yet over.

Presently over 62% of Australian productive agriculture land is either Exceptional Circumstances (EC) declared by the Australian Government or under assessment for EC.

The Australian Government expects to provide around $1 billion dollars in direct financial assistance to farmers, with over $415 million already in farmers hands. That figure is increasing at the rate of $7 million a week.

Behind the very large losses associated with this drought are the human stories of those who have faced the worst nature could throw at them.

By any account the economic and social impact of the drought has been significant and the cost will be felt for many years to come, both directly and indirectly.

Ultimately it is farmers themselves and their communities who bear the brunt of drought but Australian and State governments responded in a variety of ways to assist primary producers and rural and regional communities manage through the drought.

The responses included providing freight subsidies and cash grants to farmers and communities and providing an undertaking that the Government would not remove resources from country towns in drought affected areas.

Now the majority of financial assistance provided to farmers is through the EC framework, funded mainly by the Commonwealth.

EC is, however, a joint Commonwealth-State policy response developed in the early 90s. I know that there are weaknesses in the EC framework and since 2000 I have been committed to securing reform but without success.

Once this drought became widespread, it was not the time to reform EC and we resolved to make the best of the current system. The Australian Government responded to some of the deficiencies by introducing extra measures to ensure assistance gets to farmers faster and more broadly.

I was accused of "bending the rules on EC" - but I do not apologise for widening the goalposts and provide easier access to assistance for farmers whenever we could do so within the agreed policy framework, or when this was not possible through additional measures at Commonwealth cost.

While there has been criticism about the effectiveness of the EC policy, more than 30,000 people have accessed EC income support and more than 10,000 have received EC interest rate subsidies to date and we would expect those numbers to

continue to climb.

In fact, just this morning I announced a further interim EC declaration in Queensland's North West Ashy Downs region, which encompasses another 560 farmers.

So, while we are seeing some easing of drought conditions in some parts of Australia - and 2003 was a better year for many producers than 2002 - there is no question that there are still many farmers feeling the impacts of this very dry period in our nation's history.

Nevertheless, it is now appropriate to start to look at the lessons of this drought and to see what changes need to be made to the way we prepare for and manage drought and the way governments provide assistance during drought and in the recovery phase.

Drought policy is, and should remain, a responsibility shared by industry, communities and Governments - Federal/ State/Territories and Local.

The way forward will need to be the responsibility for all - not just one government in isolation.

We all have a role to play now and in the future to ensure that Australian Agriculture is better placed to manage the next drought whenever it occurs, and let's hope that it is many years away.

To ensure that the views of farmers who have had to manage the drought on a day to day basis are considered when we formulate future drought policy, I established with the support of State agriculture Ministers, the Drought Review Panel and asked them to consult broadly across all States and Territories - asking people on the land what they see as the key issues and what Governments need to consider in developing a new drought policy.

Professor Woods and the rest of the Panel must be congratulated on the excellent work that they have done.

They worked tirelessly to complete the task - holding more than 60 public forums and studying over 300 submissions.

They have produced a report which will form the basis of the discussion here today. While there are many messages captured in the report we have before us, one message is abundantly clear - reform is needed.

Professor Woods will outline the key issues arising from the report after which we will discuss the key issues that my State and Territory Ministerial Colleagues and myself must consider when discussing future drought policy at the next Primary Industries Ministerial Council on the 19 May 2004.

The key objective of today will be to further develop those key issues. The issue of how any new drought policy will be funded and by whom will be matters for discussions between Governments once we know the shape of the new drought policy, but I must say I found it interesting that one of the issues raised within the Panel's report was the need for a well defined funding formula, perhaps like what is in place for Natural Disaster Relief Arrangements.

I can assure you that, in developing any new drought policy, the issues raised and agreed upon today will be fully and carefully considered. I do not expect that we can come up with all the detailed answers today, as many of the matters raised within the Panel's report will need further investigation.

Before Professor Woods commences her presentation on the Panel's findings and before the Australian Bureau of Agriculture and Resource Economics and the Bureau of Rural Sciences put the drought into context in relation to previous drought events, I draw your attention to the folder on the table in front of you, particularly the Agenda and the information slip. Should you require any assistance today please ask one of the Secretariat Staff.

The first presentation will be by Dr John Sims from the Bureau of Rural Sciences who will, by way of background, put this drought and its impacts into context.

In closing, I would like to remind you that today Australian leaders have an important opportunity to start to get drought policy right. We must listen to and learn from what we have all endured during the current harrowing drought.