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A government report has rejected the feasibility of drought assistance for struggling farmers. The report was commissioned by the government to investigate whether the provision of drought assistance would benefit Australia’s significant agricultural sector.
The report found that the move would be uneconomical, as 80% of government aid after droughts is allocated to livestock producers. The report cited the finding that there are currently no insurance policies available for livestock producers as a reason for its decision.
However, insurance companies argued that they could create such policies, which they would be motivated to do by the significant revenue potential. Drought insurance would allow farmers to invest in increasing production and position Australian agriculture centrally in the Asian consumption boom.
The report stated that the current measures, which include loans and rural household support payments, would be sufficient to assist drought-affected farmers. This year and last have seen substantial panic over the predicted dry weather, which has spurred farmers to consider their options.
As one of the world’s biggest exporters of beef, wheat and sugar, it is imperative that Australia be more mindful of agriculture. As we have seen earlier this year with dairy farmers, agricultural concerns are becoming more prominent in the minds of the Australian public, which is promising for the next generation of farmers.
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