Jacqueline Rowarth: Drought help and welfare

Farm welfare assistance has become a hot topic in Australia once again, with the release of a report assessing drought support programmes.

Mike Young, a senior researcher in the land and water division of the Commonwealth Scientific and Industrial Research Organisation, and Jim McColl, a former state Director-General of Agriculture, have concluded that helping struggling, drought-stricken farmers to stay on the land merely prolongs the agony for them, and results in more land degradation.

Under a normal autonomous adjustment process, say the authors, these people receiving assistance would leave.

Federal Agriculture Minister Peter McGauran disagrees, describing the report as a "callous and highly inaccurate judgment".

In contrast, the National Farmers Federation has welcomed the contribution the report has made to the debate. Federation president Peter Corish has suggested that the federation agrees with the main statement of the report that Government policy should not impede natural adjustment within agricultural industries, and in doing so prevent viable farmers from expanding their enterprises and improving their economies of scale.

The debate is now likely to focus on the aim of the "welfare". Is it to assist people to stay on the farm at all costs (the CSIRO implication) or to provide viable farmers who face exceptional climatic stress with the short-term resources needed to maintain and protect Australia's agricultural and environmental resource base?

The Australian Bureau of Agricultural and Resource Economics surveyed farms receiving assistance in 2004 and found that most of farms self-identifying as "unviable" did not receive farm business support but did receive welfare help.

Jared Diamond, author of Collapse: How Societies Choose to Fail or Survive, has suggested that the unpredictability of Australia's rainfall is perhaps even more of a problem than its low average.

When Australia was first settled, potential farmers had no way of knowing that the rainfall was driven by the El Nino Southern Oscillation; it is difficult to detect in Europe and has been recognised by climatologists only in recent decades.

The first farmers, says Diamond, had the misfortune to arrive in a string of wet years. They started farming in the expectation that what they were experiencing was normal.

Diamond estimates that the rainfall in most of Australia's farmlands is sufficient to raise crops to maturity in only one in two years. In some areas crop maturity can be obtained in only one in five years.

This contributes to making Australian agriculture expensive and uneconomic: the farmer goes to the expense of preparing the land and sowing the crop, and in half or more years there is no resulting crop. Furthermore, the prepared and exposed soil is then subject to erosion, which has long-term impacts.

Australian policy states that farmers must manage for drought. It provides rescue packages for exceptional (once in 20-year) events.

The Howard Government established a farm management deposit scheme which allowed money to be deposited, untaxed, in a good year, and withdrawn, with tax, in a bad year.

While the debate will continue, there are clearly some pointers for New Zealand as climatic variability increases.

Not subsidies, but intelligent incentives to plan ahead, should be on the agenda for the new Government.

* Jacqueline Rowarth is director of the Office for Environmental Programmes at the University of Melbourne.