Rich farmers get aid from city poor
Asa Wahlquist
October 18, 2005
MANY of the farmers receiving a share of the millions of dollars in drought support are wealthier than the individual taxpayers who are providing it.
And despite the federal Government pouring funds into the agricultural sector to keep farmers in business during times of drought, no one knows the true level of hardship.
Australia's leading academic on drought policy, the University of NSW's Linda Botterill, said "there is no doubt there are problems with the exceptional circumstances (drought relief) program".
"The taxpayers who are paying for it are not as wealthy in their lifetime as a number of the farmers who are receiving it," she said.
In 2003/04, the federal Government spent $305million on drought support, and $219million last financial year. More than half the money went to NSW, mostly in the form of income support and business interest rate subsidies.
Dr Botterill said the welfare component accounted for most of the money. But she said farm poverty had not been measured since the 1970s.
"We don't know how many genuinely poor farmers are out there, we don't know whether they are chronically poor or whether their poverty is episodic, from drought or other circumstances."
Dr Botterill was responding to a CSIRO report published yesterday that found assisting poor farmers to stay on the land stopped good farmers from expanding and led to land degradation.
The report's concerns were shared by the nation's leading water scientist, Peter Cullen, who argued that drought policy only delayed what should be the inevitable for some farmers.
"The history of our ... support for farmers hasn't necessarily been all that effective at getting people away from these marginal areas," he said.
"I suspect we can get a better bang for the buck for the taxpayer, and we can get a more humane result for the farmers."
Dr Botterill has proposed HECS-style farm loans, that she said would mirror farmers' main drought risk tool, farm management deposits. The deposits currently enable farmers to put aside money, untaxed in a good year, and withdraw it and pay tax in a drought year.
Dr Botterill said the proposed HECs-style loans would enable farmers to borrow in a bad year against future good years.
National Farmers Federation vice-president Charles Burke said the CSIRO report raised "some issues that need to be debated".
He said there was anecdotal evidence that drought aid had propped up some farms that were not viable, "but in the majority of cases, that is not what is happening".
"In the majority of cases people who are looking for assistance are viable in the long term," he said.
