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1 March 2019

Drought Taskforce

Department of the Prime Minister and Cabinet


GrainGrowers welcomes the opportunity to provide a submission on the Consultation Paper “Developing a Commonwealth strategy for drought preparedness and resilience”.

GrainGrowers is an independent and technically resourced, grain farmer representative organisation with over 17,000 members across Australia. GrainGrowers’ goal is a more efficient, sustainable and profitable grain production sector that benefits all Australian grain farmers and the wider grains industry.

GrainGrowers is a member of the National Farmers Federation (NFF) and has had significant input into, and supports, NFF’s drought policy. This submission supplements the NFF submission and identifies additional grains-specific issues which we consider essential to ensure strong drought preparedness, resilience and recovery for the grains sector.

GrainGrowers supports the principles identified for developing high level strategy contained in the consultation paper. Detail on specific findings and additional proposals are outlined below. GrainGrowers also recommends:

  1. An additional priority area, “Enhancing Regional Australia”, be included in the Commonwealth’s drought strategy.
  2. Relevant drought-related information should be accessible, tailored and timely.
  3. The use of individual farm weather data by the Bureau of Meteorology to enhance weather reporting and forecasting.
  4. Changes to Farm Management Deposits (FMD) to allow inter-generational transfer and use of FMDs by companies and rural businesses.
  5. A temporary tax incentive for multi-peril crop insurance for a period of five years to allow a commercially viable drought insurance market to establish in Australia.
Inclusion of additional priority, “Enhancing Regional Australia”.

GrainGrowers supports the three priority areas identified and, as raised during the consultation period in December, proposes an additional priority of “Enhancing Regional Australia”. This recognises the potential to reduce the negative impacts of drought if regional infrastructure such as roads, rail, and telecommunications; and public services and facilities associated with health, welfare and education are developed and maintained. Proactive and strategic investment by Government in infrastructure and services is imperative to improving resilience and endurability of regional communities and economies. Furthermore, prioritising and fast-tracking infrastructure investment in times of drought can also provide immediate employment opportunities and regional economic stimulus to offset the contraction in agricultural activity in response to drought.

Informing governments, businesses and communities

GrainGrowers supports the finding that information should be accessible and tailored. We also strongly believe information must be timely. This drought has again proven the difficulty in obtaining comprehensive and timely information regarding drought assistance programs and the extent of uptake by drought-affected communities. This is despite reporting requirements being included in the 2013 inter-governmental agreement. It is imperative that governments and industry are able to see, on a regular basis, activity within each program as this provides early warning signs if things are getting worse on the ground. Information should also be ground-truthed at a local level, and tapping directly into the rural financial counselors would be one way to obtain a clear understanding of emerging drought situations within a region. GrainGrowers also encourages the use of individual farm weather data as part of the early indicators. The Bureau of Meteorology (BOM) has proposed that individual farm data could be collected and used to run alongside official collection sites, helping to inform official weather reporting and forecasts. With relatively little investment by Government, the additional information available to BOM would make enhance its capacity to provide accurate forecasts and identify emerging patterns.

Incentivising good practice

Farm Management Deposits (FMD) are an important tool for grain farmers and uptake has been strong in the sector. GrainGrowers believes changes to FMDs that allow inter-generational transfer and use of FMDs by companies and rural businesses would facilitate greater drought resilience and preparedness.

GrainGrowers also supports a temporary tax incentive on multi-peril crop insurance for a period of five years to allow the market to establish. The 150% tax incentive on premiums (for five years only) will lower costs to famers, incentivise farmer update, result in market penetration / geographic coverage, and therefore allow this solution to become commercially self-supporting. Attached as appendix 1 is more detail on the proposal and associated modelling which shows impacts on revenue as a result of this proposal. Indeed, the Government’s Agricultural White Paper identified the importance of farmers managing risks including drought. Government has reported that “insurance can significantly reduce the financial risks farmers face from production loss caused by factors beyond their control”.

Research, development and extension

GrainGrowers supports the need for strong coordination across agricultural RDCs for drought research, development and extension.

Rural Financial Counselling Service

GrainGrowers supports the finding that RFCS needs to have the ability to manage periods of high demand. GrainGrowers notes that the skills required of an effective counsellor take time to develop and consideration must be given to ensuring a pipeline of counsellors exists to ensure that adequate experienced counsellors are available as demand increases.

We would be happy to discuss these proposals in more detail at your convenience and our key contact is Fiona McCredie, National Policy Manager on 02 9286 2000 or ua.moc.sreworgniarg@eiderccm.anoiF.

Yours sincerely,

Mr Luke Mathews

General Manager Policy and Research, GrainGrowers