Up the creek: the $85 million plan to desalinate water for drought relief


Lin Crase, University of South Australia

The deal to crank up Adelaide’s desalination plant to make more water available to farmers in the drought-stricken Murray-Darling Basin makes no sense.

It involves the federal government paying the South Australian government up to A$100 million to produce more water for Adelaide using the little-used desalination plant.

The plant was commissioned in 2007 at the height of the millennium drought. It can produce up to 100 gigalitres of water a year – enough to fill 40,000 olympic sized swimming pools. But has been used sparingly, operating at its minimum mode of
8 gigalitres a year, because of the expense of turning seawater into freshwater.

The Adelaide Desalination Plant.
Vmenkov/Wikimedia, CC BY-SA

Adelaide has continued to mostly draw water from local reservoirs and the River Murray, which on average has supplied about half the city’s water (sometimes much more).

But with federal funding, the desal plant will be turned on full bore. This will free up 100 gigalitres of water from the Murray River allocated to Adelaide for use by farmers upstream in the Murray Darling’s southern basin.

The southern Murray–Darling Basin.
ABARES, CC BY-NC

The federal government expects the water to be used to grow an extra 120,000 tonnes of fodder for livestock. The water will be sold to farmers at a discount rate of A$100 a megalitre. That’s 10 cents per 1,000 litres.

By comparison, the residential price for that water in Adelaide would be A$2.39 to A$3.70 per 1,000 litres.

The production cost of desalinated water is about 95 cents per 1,000 litres when there’s rainwater already stored, according to a cost-benefit study published by the SA Department of Environment and Water in 2016. That means the total cost for the 100 gigalitres will be about A$95 million.

So the federal government is effectively paying A$95 million to sell water for A$10 million: a loss to taxpayers of A$85 million.


The Conversation, CC BY-ND

What do we get for the money?

The discounted water provided to individual farmers will be capped at no more than 25 megalitres. The farmers must agree to not sell the water to others and to use it to grow fodder for livestock.

There are many different forms of fodder but livestock producers most favour lucerne hay because it is highly nutritious. But it is also more expensive than cereal, pasture or straw hay.

The amount of hay that can be grown with a megalitre of irrigation water depends on many things, but 120,000 tonnes with 100 gigalitres is possible in the right conditions.

In the Murray-Darling southern basin lucerne hay currently sells for A$450 to A$600 a tonne. That would make the market value of 120,000 tonnes of lucerne A$54 million to A$72 million.

It means, on a best-case scenario, the federal government will be spending A$85 million to subsidise the production of hay worth A$72 million to its producers.




Read more:
Australia’s drought relief package hits the political spot but misses the bigger point


The reality of farming

In practice farms and farmers are incredible diverse, so not all irrigators will necessarily grow lucerne. Alternative fodders such as pasture or cereal hay generally have much lower market values. Which meaning the value of the fodder produced may be much less than the best-case scenario.

It’s worrying that this policy shows such little regard for farming realities. It appears to have been crafted on the premise that every farmer has the same land, the same equipment and the same needs.

Dictating the water must be used for a single purpose runs counter to the needs of the agriculture sector. If farmers could put it to a more effective use, why not allow it?

In addition, it’s not clear how all the monitoring will be done to maintain compliance over such a restrictive regime.

What measures will prevent farmers buying the discounted water and then simply selling an equivalent amount of any carry-over allocation at the going rate of up to $1,000 a megalitre?




Read more:
Drought and climate change are driving high water prices in the Murray-Darling Basin


How will the government distinguish between the fodder grown with the 25 megalitres provided at low cost and any other fodder harvested on the same farm? How much will it cost to monitor and enforce such arrangements?

The difficulty of answering these types of questions is precisely the reason why countries in the former eastern bloc failed to adequately provide for their populations. Telling people what crop to grow, when to grow, how to water the crop and how it should be consumed has not worked in the past. Farm businesses that respond to prices and use inputs, including water, in a way that suits their long- term commercial needs are generally better off.

It seems a long way from the type of national drought policy Australia needs. It’s hard to see how a policy of this kind does anything other than waste a large amount of public money and disrupt important market mechanisms in agriculture in the process.The Conversation

Lin Crase, Professor of Economics and Head of School, University of South Australia

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

Drought and climate change were the kindling, and now the east coast is ablaze


Multiple large, intense fires are stretching from Australia’s coast to the tablelands and parts of the interior.
AAP Image/Supplied, JPSS

Ross Bradstock, University of Wollongong and Rachael Helene Nolan, Western Sydney University

Last week saw an unprecedented outbreak of large, intense fires stretching from the mid-north coast of New South Wales into central Queensland.

The most tragic losses are concentrated in northern NSW, where 970,000 hectares have been burned, three people have died, and at least 150 homes have been destroyed.

A catastrophic fire warning for Tuesday has been issued for the Greater Sydney, Greater Hunter, Shoalhaven and Illawarra areas. It is the first time Sydney has received a catastrophic rating since the rating system was developed in 2009.

No relief is in sight from this extremely hot, dry and windy weather, and the extraordinary magnitude of these fires is likely to increase in the coming week. Alarmingly, as Australians increasingly seek a sea-change or tree-change, more people are living in the path of these destructive fires.




Read more:
It’s only October, so what’s with all these bushfires? New research explains it


Unprecedented state of emergency

Large fires have happened before in northern NSW and southern Queensland during spring and early summer (for example in 1994, 1997, 2000, 2002, and 2018 in northern NSW). But this latest extraordinary situation raises many questions.

It is as if many of the major fires in the past are now being rerun concurrently. What is unprecedented is the size and number of fires rather than the seasonal timing.

The potential for large, intense fires is determined by four fundamental ingredients: a continuous expanse of fuel; extensive and continuous dryness of that fuel; weather conditions conducive to the rapid spread of fire; and ignitions, either human or lightning. These act as a set of switches, in series: all must be “on” for major fires to occur.

Live fuel moisture content in late October 2019. The ‘dry’ and ‘transitional’ moisture categories correspond to conditions associated with over 95% of historical area burned by bushfire.
Estimated from MODIS satellite imagery for the Sydney basin Bioregion.

The NSW north coast and tablelands, along with much of the southern coastal regions of Queensland are famous for their diverse range of eucalypt forest, heathlands and rainforests, which flourish in the warm temperate to subtropical climate.




Read more:
Climate change is bringing a new world of bushfires


These forests and shrublands can rapidly accumulate bushfire fuels such as leaf litter, twigs and grasses. The unprecedented drought across much of Australia has created exceptional dryness, including high-altitude areas and places like gullies, water courses, swamps and steep south-facing slopes that are normally too wet to burn.

These typically wet parts of the landscape have literally evaporated, allowing fire to spread unimpeded. The drought has been particularly acute in northern NSW where record low rainfall has led to widespread defoliation and tree death. It is no coincidence current fires correspond directly with hotspots of record low rainfall and above-average temperatures.

Annual trends in live fuel moisture. The horizontal line represents the threshold for the critical ‘dry’ fuel category, which corresponds to the historical occurrence of most major wildfires in the Bioregion.
Estimated from MODIS imagery for the Sydney basin Bioregion

Thus, the North Coast and northern ranges of NSW as well as much of southern and central Queensland have been primed for major fires. A continuous swathe of critically dry fuels across these diverse landscapes existed well before last week, as shown by damaging fires in September and October.

High temperatures and wind speeds, low humidity, and a wave of new ignitions on top of pre-existing fires has created an unprecedented situation of multiple large, intense fires stretching from the coast to the tablelands and parts of the interior.

More people in harm’s way

Many parts of the NSW north coast, southern Queensland and adjacent hinterlands have seen population growth around major towns and cities, as people look for pleasant coastal and rural homes away from the capital cities.

The extraordinary number and ferocity of these fires, plus the increased exposure of people and property, have contributed to the tragic results of the past few days.




Read more:
How a bushfire can destroy a home


Communities flanked by forests along the coast and ranges are highly vulnerable because of the way fires spread under the influence of strong westerly winds. Coastal communities wedged between highly flammable forests and heathlands and the sea, are particularly at risk.

As a full picture of the extent and location of losses and damage becomes available, we will see the extent to which planning, building regulations, and fire preparation has mitigated losses and damage.

These unprecedented fires are an indication that a much-feared future under climate change may have arrived earlier than predicted. The week ahead will present high-stakes new challenges.

The most heavily populated region of the nation is now at critically dry levels of fuel moisture, below those at the time of the disastrous Christmas fires of 2001 and 2013. Climate change has been predicted to strongly increase the chance of large fires across this region. The conditions for Tuesday are a real and more extreme manifestation of these longstanding predictions.




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Where to take refuge in your home during a bushfire


Whatever the successes and failures in this crisis, it is likely that we will have to rethink the way we plan and prepare for wildfires in a hotter, drier and more flammable world.The Conversation

Ross Bradstock, Professor, Centre for Environmental Risk Management of Bushfires, University of Wollongong and Rachael Helene Nolan, Postdoctoral research fellow, Western Sydney University

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

Australia’s drought relief package hits the political spot but misses the bigger point


Lin Crase, University of South Australia

There are two basic components to the Morrison government’s latest A$1 billion package response to the drought affecting large parts eastern Australia. One part involves extra subsidies to farmers and farm-related business. The other involves measures to create or upgrade infrastructure in rural areas.

Unfortunately, most funds will be misdirected and the response is unlikely to secure the long-term prosperity of regional and rural communities. This is a quick fix to a political problem, appealing to an important constituency. But it misses the point, again, about the emerging economics of drought.

Hitting the political target

The bulk of the A$1 billion package is allocated to a loan fund. The terms of the ten-year loans are more generous than what has been offered in the past. They are now interest-free for two years, with no requirement to start paying back the principal till the sixth year.

Farmers will be able to borrow up to A$2 million. In addition, loans of up to A$500,000 will also be available to small businesses in drought-affected towns.




Read more:
Government sets up concessional loan scheme for drought-hit small businesses


Because recipients are not having to pay the full cost, these loans are in practice a form of subsidy.

Subsidies are used by government to make more people undertake an activity than would otherwise be the case. In this case the government is offering a subsidy to keep farmers and small businesses owners doing what they’ve been doing, even though from an economic point of view this might not be very wise at all.

The question that should be asked is: “do we want more or fewer people to be involved in a farming activity that is vulnerable to drought?”

Most farming in Australia is completely reliant on rainfed crops and pastures. Rainfall is already highly variable. All the indicators from climate science is that rain will be even more unreliable in the future.




Read more:
The science of drought is complex but the message on climate change is clear


In addition, the agricultural industries currently drought affected are not just at the whims of rainfall. These industries are constantly changing and being affected by new technologies and market forces.

For most agricultural produce the key market force is price. Sure, some farms and farmers can carve out niche markets, but most farm businesses depend on producing at lowest cost. Increasingly, the farms that survive in a highly competitive global environment do this by exploiting economies of scale. Big farms are thus more profitable than small ones in the good times (such as when it rains); and during the tough times (such as during drought) they have more resources and deeper reserves to ride it out.

Ultimately, this means successful farms are continually getting bigger and small farmers are getting squeezed out.




Read more:
Just because both sides support drought relief, doesn’t mean it’s right


The data also support the view that the farmers who survive and are simultaneously exposed to drought ultimately become even more profitable, because of what they learnt about managing in a difficult environment.

This is not to argue drought is a good thing for any farm, but it does raise a serious question about any government policy that effectively encourages more people to keep doing something when global and technological forces would point to it being unsustainable.

So what’s the point?

The second component of the Morrison government’s relief response involves directing about A$500 million from existing regional infrastructure funds into building roads and other things into affected communities.

While many will welcome this on top of the the extension of loans to small business in country towns, the policy detracts from the serious questions that confront rural and regional communities.

The economics of agriculture has flow-on effects to towns, but it would be wrong to think all are impacted in the same way.




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


As a general rule, when farmers sell up, they tend to leave from the small communities first. The upshot is that small communities get smaller, older and poorer as those least mobile are left behind. These people also generally require more, not less, public support. Mid-size communities tend to level out, while continuing to age. Large regional centres tend to grow and prosper.

The point is that each community requires different things from government. Genuine public goods like roads, health services and education are desperately needed and undersupplied in many cases. Providing cash to a few select businesses and grading a gravel road in this situation belies the complexity of the long-term challenges and fails to address serious issues.

An elderly retiree in a rural town might well ask why their local road or bridge is only upgraded during a drought. Surely, government should focus on providing legitimate public goods for the long term, regardless of the weather.The Conversation

Lin Crase, Professor of Economics and Head of School, University of South Australia

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

Government sets up concessional loan scheme for drought-hit small businesses



The business drought loans will be up to $500,000, and include a two-year interest free period.
AAP/Dan Peled

Michelle Grattan, University of Canberra

The government will provide concessional “drought loans” for small businesses dependent on agriculture, as well as improving the terms of loans under the existing scheme for farmers, in a package approved by cabinet on Wednesday.

Measures to be unveiled on Thursday also include hundred of millions of dollars of direct investment into communities.

The initiatives come after intense pressure on the Coalition to do more for those hit by one of the country’s worst-ever droughts, with Scott Morrison very sensitive to how the issue is playing not just in the regions but among metropolitan voters.

Costings were still being finalised late Wednesday but sources said the package was worth more than $500 million.

The business drought loans will be up to $500,000. They will include a two year interest free period and interest only payments for years three to five, with interest and principal repayments in years six to ten.

Those set to benefit would include harvesting and shearing contractors, carriers, stock and station agents, and businesses dealing in agricultural equipment and repairs.

Businesses not directly linked to the farming sector – such as the local hairdresser or newsagent – would not be eligible.

The loans will be made through the Regional Investment Corporation – a Commonwealth body – with a small business defined as one with 19 or fewer employees.

The loans will be available immediately and no legislation is needed.

The improved terms for farmers loans will be see up to two years interest free, interest only payments for years three to five, and interest and principal payments for years six to ten. The current arrangements are interest only for the first five years and principal and interest for the rest of the 10 year loan.

The former co-ordinator-general for drought, Stephen Day, told the government that concerns had been constantly raised with him about the survival of small businesses in areas in drought.

Morrison said these businesses had been forced to seek overdrafts or other finance.

“Rural communities can’t function without these small businesses – that’s why we’re stepping in to provide this extra support,” he said.

The government says its planned extra direct investment will flow into projects that boost local businesses and jobs.

Six more local government areas will be added to the Drought Communities Program, at a cost of $6 million, and another $122 million will be available for the 122 local councils which have already received support of $1 million each.

The program funds infrastructure and local activities. An extra $50 million discretionary fund will support additional councils when needed. But this will be after a review of the program early in the new year.

Some $200 million will be redirected from the Building Better Regions Fund to set up a Special Drought Round, providing up to $10 million per project in local government areas.

Supplementary payments will be made under the Roads to Recovery program for 128 local government areas in drought for upgrades and maintenance. This is a re-purposing of $138.9 million.

Drought minister David Littleproud said the federal package was not linked to any requirement for state funding, which would have carried the risk of the states not matching the money. But he called on state governments to provide some relief on rates and payroll tax.

“We’re going to cut the cheque and we’re going to get the money out, because that’s what these local economies need now. They need stimulation …. We’re not going to play politics, we’re going to get on with the job and deliver, and hopefully the states will complement us with things like rate relief and also payroll tax”.

Deputy Prime Minister Michael McCormack said: “This suite of measures go to the heart of what matters to these communities. From small businesses to primary producers, we are working with communities to take the pressure off one of the worst droughts in history.

“Not only is the government continuing to respond as the drought progresses, but we are working on measures to assist in the recovery when the rains come, which includes the government’s billion dollar investment in water infrastructure.”

Agriculture Minister Bridget McKenzie said: “I know our farmers and our communities are doing it really tough right now but despite the current drought Australian agriculture has a bright future”.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

A national drought policy should be an easy, bipartisan fix. So why has it taken so long to enact a new one?



The Coalition has been promoting its $7 billion drought relief package, but critics say what’s needed is a more effective national drought policy.
Dan Peled/AAP

Linda Botterill, University of Canberra

In a country as dry as Australia, surely it is a no-brainer that we have in place a coordinated, national drought response that can be rolled out the same way that the Natural Disaster Relief and Recovery Arrangements are triggered when the country experiences cyclones, floods or bushfires.

Drought used to be part of these arrangements but, for good policy reasons, was removed in 1989.

Our last attempt at national drought policy

Once upon a time, Australia had a national drought policy. It was enacted in 1992 following a comprehensive review and report by an independent panel, the National Drought Policy Review Task Force, and detailed negotiations between Commonwealth and state ministers and their officials.

The policy included commitments by both state and Commonwealth governments to implement a coordinated and comprehensive package of programs covering drought preparation and response.

At the Commonwealth level, these measures were centred around:

  • the controversial “exceptional circumstances” provisions of its revised Rural Adjustment Scheme, which were aimed at supporting farm businesses by subsidising up to 100% of the interest paid on commercial loans.

  • a farm household support scheme that provided short-term income support to farmers and also offered grants for those who decided to leave the land.

  • farm management bonds, later known as farm management deposits, that allowed farmers to set aside pre-tax income they could later draw on in times of need.

  • a drought relief payment (added to the policy in 1994) that provided income support for farmers in areas declared to be experiencing “exceptional circumstances” drought. By May 1995, over 10,000 families were accessing this payment every month.

Grain feed left for sheep grazing on a failed crop in NSW.
NSW drought stock/AAP

Flaws in the policy

As anyone familiar with these programs will know, the exceptional circumstances program was plagued by problems.

The first was the lack of clarity around defining when a drought moved from a “normal” situation that was expected to be managed by farmers, to an “exceptional” situation with which even the best manager could not be expected to cope.

The definition of an “exceptional circumstances” drought became the subject of ongoing debate, along with concerns that drought assistance was based on administrative boundaries, leading to inequities that became known as the “lines on maps” problem.




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Just because both sides support drought relief, doesn’t mean it’s right


The second issue was the amount of information farmers were required to provide in order to demonstrate eligibility for “exceptional circumstances” assistance. The process was considered onerous and time-consuming.

Amid these concerns, a comprehensive review of drought policy was conducted in 2008 by the Productivity Commission. This was accompanied by a report by the Bureau of Meteorology and CSIRO on the likely impact of climate change on the frequency and severity of droughts in Australia, and an independent report on the social impact of drought.

Following the review, the government decided to end the “exceptional circumstances” program in 2009. This effectively gutted the national drought policy.

Since then, there has been no further attempt at developing a comprehensive, predictable drought policy response from the federal or state governments. There have been intergovernmental National Drought Agreements, but these have done little more than restate the principles underpinning the country’s drought policy since 1992.

In recent years, the Coalition government has appointed a drought envoy, Barnaby Joyce, and drought coordinator-general, Stephen Day, to study the impact of drought on farmers and recommend possible solutions, but we have yet to see what either has come up with.

Drought envoy Barnaby Joyce says he has sent drought reports directly to Scott Morrison, but these have not yet been made public.
Lukas Coch/AAP

Providing meaningful, timely and predictable support

Much of the criticism levelled at the government’s response to the current drought relates to its ad hoc and knee-jerk nature. This reactive way of dealing with drought highlights the need to return to a more predictable approach. This would avoid perceptions of pork barrelling and provide certainty to farmers about what support is available and under what circumstances.

A new national drought policy needs to take several forms. First, it needs to support farmers to prepare for drought before it happens. This is one area where the current policy has been moderately successful.

As of August 2019, Australian farmers had set aside a total of $5.809 billion in farm management deposits. These deposits have encouraged farmers to manage financial risk by building up cash reserves in high-income years, which they could then use during times of drought.

Individual farmers can currently hold a total of $800,000 in deposits. One possible improvement is to raise the ceiling on annual deposits in the years following drought recovery to allow a rapid rebuilding of cash reserves.

Second, a strong drought policy needs to provide support to all farmers during drought, not just those who have accumulated sufficient deposits to help them ride out the lean years.

In recent years, many farmers have taken advantage of long-term, low-interest loans to help during drought, and some have called for zero-interest loans to be made available, as well. But loans are not an ideal solution, as repayments are generally required even when farm incomes remain low.

An alternative to low- or no-interest loans are income contingent loans. Similar to the HECS-HELP scheme in higher education, these types of loans only require repayment when the borrower can afford to do so.

This would not only give farmers greater flexibility when it comes to repayment, it would also greatly reduce the extensive red tape that strangled the old “exceptional circumstances” scheme.




Read more:
Farm poverty: an area of policy aid built on sands of ignorance


Third, we need a serious rethink of the way we provide income assistance to farmers in a broader sense. Providing income support to farmers who are asset-rich, for instance, raises questions about fairness when compared with poor people in cities who are struggling to get by on Newstart payments.

This imbalance has come into stark focus in recent weeks, particularly on social media, as government ministers have discussed the introduction of drug testing for Newstart recipients, and in the debate around the Indue card.

There has been no serious attempt in the past 45 years to measure the extent of poverty among farmers. We can develop more appropriate and equitable income-support policies if we can better understand the genuine nature of their need.

The elephant in the room

While the government has assiduously avoided making the link, an effective national drought policy also cannot be divorced from discussions about climate change.

The 2008 Productivity Commission report was pretty clear in its conclusions about the impact of climate change on drought in Australia. A growing number of farmers are now acknowledging this reality. Denying the need for serious consideration of climate change is not doing our agricultural producers any favours.




Read more:
Is Australia’s current drought caused by climate change? It’s complicated


Developing an effective national drought policy is hard work. But in another sense, it should also be easy. This is because, unlike many other areas of government policy, it can be bipartisan.

Although the National Party has historically been aligned with rural voters, all parties are broadly sympathetic to farmers and value their contributions to the economy and, importantly, our national identity. The public also generally regards farmers positively and is responsive to their plight when they are faced with hardship.

As such, this should be one area where our politicians can come together to develop a coherent national response — one that is known in advance, forward-looking, equitable with other income-assistance programs in the community, and provides meaningful support before, during and after drought.The Conversation

Linda Botterill, Professor in Australian Politics, University of Canberra

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

Just because both sides support drought relief, doesn’t mean it’s right


Lin Crase, University of South Australia

The bipartisan parliamentary vote to transform the A$3.9 billion Building Australia Fund into a pot of cash to drought-proof Australia, the Future Drought Fund, should not be taken as universal endorsement.

Labor opposed the idea before caving in, saying it did not “want to be painted as a party that opposes support for farmers”.

Rather, it simply shows that Australian politicians coalesce on some things: few miss the opportunity to be photographed with an affectionate child, and even fewer are willing to be critical of public funds being handed to drought-stricken farmers.

But support something (or feeling too scared not to oppose something), doesn’t necessarily make it the right policy.




Read more:
Drought is inevitable, Mr Joyce


Australian governments have sought to drought-proof parts of inland Australia through publicly funded irrigation schemes for much of the past century.

Whenever dryland farmers experienced drought, they were viewed as having experienced a natural disaster, even though the variability of dryland rains was well understood.

Then, from the 1960s, things changed.

First there was a growing realisation that public monies spent on irrigation were not the best means of dealing with a variable climate.

We’ve moved away from thinking about drought as disaster

Second, governments started to describe drought differently, culminating in a 1992 National Drought Policy that required farmers to be more self-reliant and absorb the impacts of drought as something to be expected.

The decades that followed continued this trend with all states and the Commonwealth agreeing on national principles in 2013. Concessional loans and a farm management deposit scheme with taxation advantages were available to help farmers, but would only be useful to those that were viable in the long term.

A Farm Household Allowance, set at the level of Newstart and available for up to four years in return for setting out a plan to improve the farmer’s financial circumstances, was also introduced in 2015 and refined in 2018.

Part of the thinking was that climate change is expected to make droughts more common and severe, although there are good reasons for encouraging adaptation to the existing climate in any case.




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


However, getting the balance right between “supporting” farm businesses and encouraging them to adapt and be self-reliant isn’t straightforward, especially when the climate and political cycles coincide.

It’s hard to imagine politicians being fiscally prudent when they know they have access to a drought slush fund and are heading into an election during a drying phase.

So, what’s wrong with the new drought fund?

First, there is mounting evidence that farm businesses can actually benefit from drought in the longer term. This seems to occur because businesses that go through a drought develop coping strategies that when invoked in good years produce much greater profits.

That is not to say that droughts are financially a good thing – but it does mean that shielding farm businesses from drought runs the risk that they will not adapt.

Second, an obsession with drought undoes much of the good work done in reclassifying it as something to be expected rather than a natural disaster. Nearly all of the natural disaster payments made in the decade leading up to 2012-13 – one of the driest on record – were spent on rebuilding after floods and storms rather than droughts.

Third, while repurposing the Building Australia Fund as the Future Drought Fund is designed to appeal to rural and regional voters, it is unlikely to help them. Agriculture simply does not generate the jobs that it once did and public pronouncements about drought-proofing will not change the underlying economics of farm businesses and regional communities.




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Droughts, extreme weather and empowered consumers mean tough choices for farmers


Farming is generally helped by scale, and that means bigger farms with bigger machines displacing smaller farms. The upshot is fewer jobs and the shutdown of small towns, allowing only the larger regional centres to survive. Finding ways to manage this social phenomenon should be the priority rather than shielding farms from drought.

But it’s hard to be optimistic. Politicians love handing cheques to farmers as much as they love photographs with adoring children.The Conversation

Lin Crase, Professor of Economics and Head of School, University of South Australia

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

We must look past short-term drought solutions and improve the land itself


David Lindenmayer, Australian National University and Michelle Young, Australian National University

With drought ravaging Australia’s eastern states, much attention has been given to the need to provide short-term solutions through drought relief. But long-term resilience is a vital issue, particularly as climate change adds further pressure to farmers and farmland.

Our research has found that helping farmers improve the rivers, dams, native vegetation and trees on their land increases productivity, the resilience of the land to drought, and through this the health and well-being of farmers.




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


Now is the time to invest more heavily than ever in vital networks in regional Australia, such as Landcare and natural resource management groups like Local Land Services and Catchment Management Authorities.

Research shows that trees, dams and native vegetation are essential to increase agricultural productivity.
Shutterstock/Olga Kashubin

Growing pressures on agricultural land

Some researchers suggest that up to 370 million hectares of land in Australia and the Pacific is degraded. This diminished productivity across such a large area has significant implications for the long-term sustainability of agricultural production.

Australia also has one of the worst records for wildlife diversity loss, including extensive loss of biodiversity across much of our agricultural land. The problems of degradation and biodiversity loss are often magnified under the pressure of drought.




Read more:
Is Australia’s current drought caused by climate change? It’s complicated


The good news is that there are ways to strengthen the resilience of the farmland. One key approach is to invest in improving the condition of key natural assets on farms, like shelter belts, patches of remnant vegetation, farm dams, and watercourses.

When done well, active land management can help slow down or even reverse land degradation, improve biodiversity, and increase profitability.

Better lands make more money

Many studies have shown improving the natural assets on an farm can boost production, as well as avoid the costs of erosion and flood control. For example, restored riverbank vegetation can improve dry matter production in nearby paddocks, leading to greater milk production in diary herds and up to a 5% boost in farm income.

Lines of trees, called windbreaks or shelterbelts, can protect and improve the fields next to them.
Peter Fenda/Flickr, CC BY-NC-SA

Similarly, shelter belts (tree lanes planted alongside paddocks) can lower wind speeds and wind chill, and boost pasture production for livestock by up to 8%, at the same time as providing habitat for biodiversity.




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Recent Australian droughts may be the worst in 800 years


Our own long-term work with farmers who invested in their natural assets prior to, or during, the Millennium Drought in New South Wales suggests these farmers are currently faring better in the current drought.

Investing in resilience for the long-haul

Groups like Landcare bring their expertise to land management.
Shutterstock/Darryl Smith

Well-supported and resourced organisations like Landcare groups are pivotal to supporting effective land management, which improves degraded land and helps farmland (and farmer) through tough times.

However, Landcare and other natural resource management agencies have been subject to major budget cuts over the past decade.

They are also a key part of the social fabric of rural communities, bringing together landowners to exchange ideas and support each other. Indeed, the Australian Landcare model is so well regarded globally it has been adopted in 22 other countries.




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This drought is a critical decision point. The need to invest in maintaining and improving our vegetation, water and soil has never been more apparent than it is now. We have a chance to determine the long-term future of much of Australia’s agricultural land.The Conversation

David Lindenmayer, Professor, The Fenner School of Environment and Society, Australian National University and Michelle Young, Director, Sustainable Farms, Australian National University

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

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?




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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.




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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.

Australia moves to El Niño alert and the drought is likely to continue


Skie Tobin, Australian Bureau of Meteorology; Catherine Ganter, Australian Bureau of Meteorology, and Robyn Duell, Australian Bureau of Meteorology

The chances of an El Niño developing late in 2018 have increased and this week the Bureau moved to El Niño ALERT. This means that model outlooks and observations indicate there is approximately a 70% chance that El Niño will develop in the coming months. Current patterns in the Pacific are similar to the early stages of past El Niño, with warm water shifting east towards South America.

We’re also seeing indications a positive Indian Ocean Dipole (IOD) has likely started, in which warmer waters near Africa drag moisture away from Australia. El Niño and positive IOD events typically mean below-average spring rainfall in central and southern Australia, and a drier start to the wet season in Queensland and the Northern Territory.




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The development of either would favour continued dry weather, and increase the likelihood that widespread drought relief will be delayed until 2019. Higher than average temperatures, heatwaves, and more severe bushfire weather are also more likely during El Niño and positive IOD events.

A dry year so far

September 2018 was a very dry month, adding to low rainfall seen across many parts of Australia so far this year. September 2018 was not only the driest September in 119 years of record for Australia, but it was also the second-driest for any month of the year (behind only April 1902).

Rainfall for the year to date has been exceptionally low over the mainland southeast, with much of the region experiencing totals in the lowest 10% of records for January–September. Many locations in eastern New South Wales, eastern Victoria, and southeast Queensland have received about 400 mm less rainfall than they usually would have by this time of the year.

Rainfall deciles for January to September 2018.
Bureau of Meterology

Much of southern Australia has experienced a persistent rainfall decline spanning several decades, which is adding to drought stress by drying the landscape.

Southwest Western Australia has experienced significantly lower cool season (April to October) rainfall since the mid-1970s, compared to observations since 1900, while for the southeast the drop has been more recent, emerging in the mid-1990s. These rainfall declines have been linked to circulation changes in the southern hemisphere influenced by the increase in greenhouse gases.

These rainfall changes have also been accompanied by much larger reductions in streamflow, particularly in the southwest of Australia where high flows have become much less frequent.

April to October rainfall anomalies (mm) for southwestern (left) and southeastern (right) Australia, showing the decline in totals with respect to the 1961 to 1990 average. The main feature of the decline is significantly fewer wet years, meaning recovery from the dry years is patchy.
Bureau of Meteorology

And it’s also been unusually warm

Low rainfall has also been accompanied by very high daytime temperatures so far this year. Of course, Australian temperatures are warming in line with global trends, but in individual years variations which are likely to be largely natural (such as droughts) may add to or subtract from the broader trends.




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Historically, droughts have often brought hot conditions, and this has been borne out in 2018. Maximum temperatures for January to September were the warmest on record for the Murray–Darling Basin and New South Wales, with neighbouring regions also much warmer than average.

These extremely warm days, combined with extremely low rainfall, have caused an intense drying of the Australian landscape in 2018, resulting in an early start to the bushfire season in New South Wales and Victoria, where damaging fire were observed as early as late winter.

So how might the year end?

Like all Australians, the Bureau hopes farmers and those suffering through drought get the rainfall they need, but unfortunately, the outlook indicates dry conditions are likely to continue for some time.

Large parts of southern and eastern Australia are likely to see a drier than average end to the year, though odds favouring drier than average conditions tend to moderate as we head towards summer. Most of the country is likely to see a dry October, though local heavy falls can occur against a backdrop of broadly suppressed rainfall.

Chance of exceeding median rainfall between October to December 2018.
Bureau of Meteorology

While some parts of New South Wales and southeastern Queensland have received very welcome rainfall in the first days of October, rainfall has been below average over much of over eastern Australia for so long (since early 2017) that this rainfall event hasn’t been enough to break the drought.




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Looking at temperature, outlooks show a very high chance of warmer than average days and nights through to the end of 2018. Considering the year so far has already been very warm, this means 2018 has the potential to rank as another significant warm year. Seven of Australia’s ten warmest years have occurred since 2005, with just one cooler than average year in the last decade (2011), highlighting how warmer than average temperatures now dominate Australia’s climate.The Conversation

Change of exceeding median maximum temperature between October to December 2018.
Bureau of Meteorology

Skie Tobin, Climatologist, Australian Bureau of Meteorology; Catherine Ganter, Senior Climatologist, Australian Bureau of Meteorology, and Robyn Duell, Senior Climatologist, Australian Bureau of Meteorology

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

Government to set up new multi-billion Future Drought Fund


Michelle Grattan, University of Canberra

Prime Minister Scott Morrison will announce a Future Drought Fund, that will grow to $5 billion over a decade, at Friday’s national drought summit.

The fund is to provide support against future droughts, helping primary producers, non-government organisations and communities prepare for and respond to their impact.

It will be given an initial $3.9 billion injection, and will expand to $5 billion by 2028. The funding will be managed by the Future Fund Board of Guardians.

From 2020, about $100 million annually will be available, with payments starting on July 1, 2020.

Morrison has made dealing with the impact of drought one of his priorities since becoming prime minister, with various immediate measures for the current dry.

The summit will be attended by all levels of government, and representatives of farming and agribusiness, banking and finance services, and community and charitable organisations, as well as experts.

The special envoy for drought, Barnaby Joyce, and the coordinator-general for drought, Major General Stephen Day, will speak, while the Bureau of Meteorology will brief on present conditions and the projected outlook.




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The planned fund will provide community services and research, and assist the adoption of technology to support long-term sustainability in periods of drought, through capital or ongoing initiatives. It could include investments in local projects, infrastructure, and research.

The criteria for the type of projects to be supported have yet to be determined and the government says these would continue to change, depending on the drought and community response needed.

Initiatives to be supported by the fund would be decided as part of the budget process.




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Morrison said that in his visit to Quilpie in western Queensland, which he undertook immediately after becoming prime minister, he had been struck by “the strength, resilience and hope” displayed by the families.

“Our response to the drought has to be the same. Deal with the here and now, but also make sure we plan for the future.

“That’s what the Future Drought Fund is all about. Putting money aside for non-rainy days in the future,” he said.

“The fund will build over time, starting with an initial $3.9 billion up front. Part of the earning in the fund will be used to fund important water infrastructure and drought resilience projects, while the balance is ploughed back into the fund, so it grows to $5 billion over the next decade.

“This funding will support farmers and their local communities when it’s not raining.

“The challenges of drought vary from farm to farm, district to district, town to town and we continually need to adapt and build capacity – the Future Drought Fund gives us this opportunity,” Morrison said.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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