November 13, 2019
 

Australian government announces drought stimulus package for livestock farmers

 

The stimulus includes a deal with South Australia (SA) for Adelaide water to be rechannelled to farmers, education support and cheap loans for affected farmers, reported ABC Australia.

 

The $100 million AUD (~US$68.4 million, 1 AUD = US$0.68) deal by the Australian government with the SA government will mean the latter will switch on its Adelaide desalination plant to provide 100 gigalitres of river water to drought-affected farmers in eastern states.

 

David Littleproud, Drought Minister said the deal worth almost $100 million AUD (~US$68.4 million, 1 AUD = US$0.68) will provide 25 megalitres of water each to 6,000 farmers. The water can only be used to grow livestock feed.

 

Irrigators will be offered the water by end April at $100 AUD (~US$68.4) per megalitre.

 

Littleproud said the deal is expected to produce 120,000 tonnes of animal feed.

 

$15 million AUD (~US$10.2 million) will also be channelled towards education support for communities affected by the drought, according to the Australian government.

 

Previously, the drought packaged announced by the government covered two years of interest-free cheap loans for farmers and agriculture-dependant businesses, funding for local councils and road construction projects.

 

These announcements increase the drought spend by the Australian government to more than $700 million AUD (~US$479.5 million), which includes funding of $200 million AUD (~US$137 million) transferred from the Building Better Regions Fund.

 

Farmers offered the loan will need to pass a viability test – based on their business model, approved farmers must be able to repay the loan under normal situations without a drought.

 

The National Farmers' Federation (NFF) has welcomed the government's response to the drought, though it has reiterated for a comprehensive national drought policy to better prepare the country for future drought situations.

 

Fiona Simson, president of NFF said the federation would like to comprehend how the 100 gigalitres will exactly be channelled and managed for producers located in the southern basin fodder.

 

Linda Botterill, University of Canberra politics professor said the announced loans may not help farmers as it is difficult to predict if a drought will occur again, and farmers will find it difficult to repay the debt.

 

Professor Botterill suggests HECS-style loans instead. These loans are repaid to banking institutions or the government once farmers hit a certain income threshold.

 

She also added that the government should look into implementing a national drought policy.

 

- ABC Australia