Helping farmers in distress doesn’t help them be the best: the drought relief dilemma


Neal Hughes, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and Steve Hatfield-Dodds, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Two years ago we were celebrating just about the best year for farmers ever. Now many farmers – particularly in New South Wales and southern Queensland – are in the grip of drought.

It underlines just how variable the Australian climate can be.

While attention is focused on responding to the current situation, it is important to also think long-term. In our rush to help, we need to make sure well-meaning responses don’t do more harm than good.

The drought policy debate

The recent drought has stimulated much empathy for farmers from the media, governments and the public. Federal and state governments have committed hundreds of millions of dollars in farmer support. Private citizens and companies have also given generously to the cause.

While there appears to be overwhelming public support for helping farmers through drought, concerns have been raised by economists as well as farmer representatives – including both the former and current head of the National Farmers’ Federation.

A central concern is that drought support could undermine farmer preparedness for future droughts and longer-term adaptation to climate change.

Another concern is that simplistic “farmer as a victim” narrative presented by parts of the media overstate the number of farmers suffering hardship and understates the truth that most prepare for and manage drought without assistance.

Sensationalist media coverage can also damage Australia’s reputation as a reliable food producer. Images of barren landscapes, stressed livestock and desperate farmers send the wrong signals to customers and trading partners.

An acute policy dilemma

The tension in drought policy is real.

To remain internationally competitive Australian farmers need to increase their productivity.

Agricultural productivity depends on two main factors. First, innovation – adopting new technologies and management practices. Second, structural adjustment – shifting resources towards the most productive sectors and most efficient farmers.

Supporting drought-affected farms has the potential to slow both these processes, weakening productivity growth.

This gives rise to an acute dilemma: should we support farmers in distress, or support the industry to be the best it can be?




Read more:
To help drought-affected farmers, we need to support them in good times as well as bad


Factoring in climate change

While it is difficult to attribute any specific event to climate change, it is clear Australia’s climate is changing, with significant consequences for agriculture.

Australian average temperatures have increased by about 1℃ since 1950. Extreme heat events have become more frequent and intense. Recent decades show a trend towards lower average winter rainfall in the southwest and southeast.

Research by the Australian Bureau of Agricultural and Resource Economics and Sciences shows climate change has negatively affected the productivity of cropping farms, particularly in southern Australia.

This research also shows evidence of farmers adapting to maintain productivity and reduce their sensitivity to climate.


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Key southwestern and southeastern agricultural zones have been especially impacted by climate change.
ABARES

There is still much uncertainty over what climate change will mean for agriculture in the future.

However, the evidence we do have points to more frequent and more severe droughts, if only because of higher temperatures and evaporation rates.

Farming isn’t like other industries

Although businesses in other industries are expected to manage risk without assistance, agriculture has some special aspects that help build a case for a government policy response.

First, risk in agriculture is generally greater than in other industries. Farmers are vulnerable to variation in international commodity prices as well as droughts and other extreme events.


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Second, most farm businesses are also farm households.

While many other risky industries are made up of large corporate businesses (generally with diversified assets and ownership), agriculture is dominated by family farms.

Third, financial markets both in Australia and internationally struggle to provide viable risk management products for farmers – particularly drought insurance.

This means farming is an unusually risky business. Farmers must therefore be more conservative about financing and operating their businesses, which constrains investment, innovation and ultimately productivity.

Helping farms without making things worse

In 2008 a Productivity Commission review recommended a national farm income support scheme.

This led to the Farm Household Allowance program.

It provides a fortnightly payment, usually set at the rate of the Newstart unemployment allowance. There is also a financial assessment of the farm business and funding to help develop skills or get professional advice.

Those welfare programs provide an important safety net for farm households. Because they provide targeted support to households, rather than businesses, they result in fewer economic distortions than alternative approaches.

Past reviews have consistently recommended against subsidising farm business inputs or supporting output prices. This includes providing subsidies for livestock feed.

While these measures might provide short term relief, if they become routine they risk weakening the incentives to manage farms properly, by for instance destocking sheep and cattle ahead of likely droughts.




Read more:
Drought is inevitable, Mr Joyce


Looking to the future, it is possible insurance could have an important role to play.

While drought insurance has failed to thrive in Australia to date, advances in data could allow more viable forms of insurance to emerge.

In particular, index-based insurance products where payouts are based on weather data rather than an assessment of farm damages.

Such insurance, if done well, could provide farmers with better protection from climate risk, while also supporting adaptation and productivity growth – effectively sidestepping our current drought policy dilemma.The Conversation

Neal Hughes, Senior Economist, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and Steve Hatfield-Dodds, Executive Director, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Officials Threaten to Burn Shelters of Expelled Christians


Village heads tell church members they must recant faith or move elsewhere.

DUBLIN, March 16 (CDN) — Officials in southern Laos in the next 48 hours plan to burn temporary shelters built by expelled Christians unless they recant their faith, according to advocacy group Human Rights Watch for Lao Religious Freedom (HRWLRF).

Authorities including a religious affairs official, the district head, district police and the chief of Katin village in Ta-Oyl district, Saravan province, expelled the 48 Christians at gunpoint on Jan. 18.

Prior to the expulsion, officials raided a worship service, destroyed homes and belongings and demanded that the Christians renounce their faith. (See www.compassdirect.org, “Lao Officials Force Christians from Worship at Gunpoint,” Feb. 8.)

Left to survive in the open, the Christians began to build temporary shelters, and then more permanent homes, on the edge of the jungle, according to HRWLRF. They continued to do so even after deputy district head Khammun, identified only by his surname, arrived at the site on Feb. 9 and ordered them to cease construction.

More officials arrived on Feb. 18 and ordered the Christians to cease building and either renounce their faith or relocate to another area. When the group insisted on retaining their Christian identity, the officials left in frustration.

On Monday (March 15), district head Bounma, identified only by his surname, summoned seven of the believers to his office, HRWLRF reported.

Bounma declared that although the republic’s law and constitution allowed for freedom of religious belief, he would not allow Christian beliefs and practices in areas under his control. If the Katin believers would not give up their faith, he said, they must relocate to a district where Christianity was tolerated.

When the seven Christians asked Bounma to supply them with a written eviction order, he refused.

The Christians later heard through local sources that the chiefs of Katin and neighboring Ta Loong village planned to burn down their temporary shelters and 11 partially-constructed homes erected on land owned by Ta Loong, according to HRWLRF.

These threats have left the Christians in a dilemma, as permission is required to move into another district.

Both adults and children in the group are also suffering from a lack of adequate food and shelter, according to HRWLRF.

“They are without light, food and clean water, except for a small stream nearby,” a spokesman said. Officials also forced them to leave the village with minimal clothing and other items necessary for basic survival.

Village officials have said they will only allow spirit worship in the area. A communist country, Laos is 1.5 percent Christian and 67 percent Buddhist, with the remainder unspecified. Article 6 and Article 30 of the Lao Constitution guarantee the right of Christians and other religious minorities to practice the religion of their choice without discrimination or penalty.

Decree 92, promulgated in July 2002 by the prime minister to “manage and protect” religious activities in Laos, also declares the central government’s intent to “ensure the exercise of the right of Lao people to believe or not to believe.”

Report from Compass Direct News 

BISHOP EXPLAINS CHALLENGES FACING CHRISTIANS AFTER WAR IN SUDAN


Bishop Antonio Menegazzo of El Obeid, Sudan spoke out this week about the damage being done to the country by its civil war and about the challenges facing the Christian minority that lives amidst growing violence. He called on international organizations to help find solutions to the 20 year-old conflict, reports Catholic News Agency.

In an interview with the L’Osservatore Romano, the bishop said that the Church in Sudan is “very concerned about Darfur. The war continues to affect innocent victims, and international organizations are not able to stop this endless wave of violence.”

“In the rest of Sudan as well, after 21 years of civil war between the north and the south, the injustices and suffering are not diminishing. Things have not improved even with the peace accords and the situation here is neither clear nor encouraging. The UN and the European Union should pay greater attention to the problems of Sudan,” the bishop said.

Speaking about the situations Christians face in the country, Bishop Menegazzo noted that while there is a great hunger for God in many people in Sudan, this “has not penetrated deeply into the hearts and minds of many of our Christians: they have not been able to completely change their mentality, their culture is still not purified by the Word of God.”

“Often we are unable to find a solution to their problems and they still easily fall back into their old ways,” he said.

“In Sudan,” he continued, “most of the catechumens do not know how to read or write, and therefore in order to prepare them for Baptism, catechists need to be able to explain the Word with posters, drawings or their own words. And here lies the great dilemma: poorly trained catechists, because few are instructed in how to help catechumens who want to be disciples of Christ. Many teach the catechism and the truths of the holy faith from memory, with a poor knowledge of the Holy Scriptures.”

Report from the Christian Telegraph