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Rain may have drowned out Prime Minister Tony Abbott’s weekend visit to the driest regions of Australia but it hasn’t dampened his ambitions to bail out the country’s drought stricken farmers.
The government’s new agricultural equivalent of the dole -- the farmer household assistance payment -- is set to come into effect by the June 2014, with the government flagging a possible earlier start date for the scheme.
This payment was first recommended by the Productivity Commission as a result of an inquiry into drought relief in 2009. Its introduction has been on the cards for a couple of years.
But the government has now also flagged further support for the sector, eyeing its own loan scheme for farmers suffering drought. Is this one step to far?
It’s fair to say the government's likely to have a fair bit of trouble selling the idea of further support to the public, given that just a fortnight ago it turned away another food producer, SPC Armona, without a second thought.
On one hand the government is declaring the end of the "age of entitlement" and with the other it’s planning to palm out funds elsewhere.
So what do you think? It's a complex debate, and we've put together a few simple facts on both sides of the argument to help you navigate it.
For more government support
Australia is in drought
(Click to enlarge)
Farmers depend on Australia’s rainfall patterns and, as the graph above shows, they can change quite wildly over time.
This current drought doesn’t compare to conditions in 2003, but particular regions of the country are still drier than usual. It’s also worth noting that when looking at the Bureau of Meteorology's alerts over time, it seems that Australia is continuously at least partly in drought.
Our OECD counterparts are much more heavily subsidised
As Malcolm Turnbull pointed out on Q&A last week, Australia subsidies its farmers a lot less than the rest of the OECD.
In in terms of the average amount of subsidy per business, we sit somewhere in the middle and are nowhere as extravagant as the EU.
Against further support for farmers
The sector is less dependent on assistance than ever before
The agricultural sector may need support during a drought, but according to an earlier study by the Productivity Commission, its reliance on these handouts has diminished over time.
In the 1970s over 25 per cent of the sector's total contribution to GDP came as a direct result of government aid. This has since trended downwards, rising slightly during times of drought.
Farmers really don’t need any more debt
The government’s solution to dole out loans with favourable terms may not actually ease the problem. As this graph from the Global Farmer shows, Australian farmers are already bogged down in debt.
So, back to the question: