Is the Future Drought Fund is the right solution?
Written by engage on August 5, 2019
Australia is currently in the midst of one of the worst droughts on record, leaving many farmers in crisis. To combat this, the Australian Government has recently passed a bill introducing a $3.9 billion Future Drought Fund, which is expected to pass through the Senate unopposed.
However, water economics expert from UniSA Business School, Professor Lin Crase, believes the Future Drought Fund is the wrong solution for Australia’s drought crisis and won’t benefit farmers in the long term.
Professor Crase writes exclusively for 1079 Life on this issue
The Future Drought Fund: Just because politicians agree, doesn’t make it right
Bipartisan support for changing the national future fund into a pot of cash to (so-call) drought-proof Australia shouldn’t be taken as universal endorsement.
Balancing ‘supporting’ farm businesses and encouraging them to adapt and be self-reliant isn’t simple, especially when climate and political cycles coincide. It’s hard to imagine politicians being fiscally prudent with a drought slush fund when heading to election in a drying phase. So why’s this important?
First, there’s mounting evidence farm businesses can benefit from drought in the longer term, because affected businesses develop coping strategies, which realise much greater profits in good years.
Second, ‘drought obsession’ disguises the real climatic challenge: variability. In the decade preceding 2012-13 – one of the driest on record – around $6.5 billion was spent on Natural Disaster Relief and Recovery Arrangements, to rebuild after floods and storms. It’s hard to rationalise rebadging the ‘Building Australia Fund’ as one only for ‘rebuilding for drought’.
Third, this latest move is unlikely to help the transition pressures facing those communities. Agriculture simply doesn’t generate the jobs it once did and drought-proofing pronouncements cannot change the underlying economics.
Farming is generally favoured by scale—bigger farms with bigger machines displace smaller players and small towns get smaller and older while larger regional centres survive. Finding ways to manage this social phenomenon is the priority, and rhetoric about drought simply misses the point.