Take the Reins

Sheep at a Dry Creek by Samuel Calvert (1879)

There is increasing consensus that the Government must alleviate the effects of the drought. But its policy must be based on facts, not emotion, says nick cater.

Parched are the plains and bare,
Dusty and eaten out;
Animals everywhere
Perish in dumb despair;
For the land is held in the iron grip
Of the enemy general Drought!

 Banjo Paterson’s General Drought, General Rain was written in 1902 at the peak of the Federation Drought. It retains its notoriety as the worst drought since European settlement. 

Paterson’s words evoke a heightened emotional response as we read it today. The dry period across the Murray–Darling Basin that is particularly severe in the north has been running for almost three years. Longer-term rainfall deficiencies affect Gippsland, in eastern Victoria, and the east coast of Tasmania.

In the second verse Paterson asks rhetorically, “Who shall deliver us? Who shall assuage our pain?”

If you were to ask that question today, in virtually any forum, the answer would be General Government. On that point at least we can be assured of unanimity between Labor spokeswomen and men, Green catastrophists, Guardian columnists, the National Farmers Federation, the finger-wagging ABC and commercial talkback radio.​

It seems we’re not just short of water. Perspective and calm judgement has evaporated in the national discussion about what is to be done. In the past fortnight in particular, the debate has been beset by panic, which is seldom the best atmosphere to make decisions about how a government should respond.

The National Farmers Federation helped calm matters not a bit with its invitation to the government to pay people to walk away from their land.

Demands from at least one vocal rural politician for another $1.3 billion in subsidies are best ignored. We know where cheque-book waving lands us. 

Labor’s proposal for bi-partisan drought emergency government is symptomatic of the party’s detachment from reality.

The Greens are exploiting the drought for their own ends. It’s not fodder for cattle they are seeking, but fodder for their disingenuous climate panic campaign. 

While we don’t know if this dry spell will last as long as the 2001-2011 Millennial Drought, and pray that it won’t, the conditions for a rational policy discussion seem less favourable than last time. Social media, the accelerated news cycle, the modern rush to instant judgement and a deepening mood of catastrophism associated with global warming make it difficult for any government to respond in the national interest, as opposed to trying to placate the anger of an emotional few.

As in so many policy areas, cold hard analysis is being swamped by emotion. Politicians become demons and Canberra the evil world in which they reside. Berating politicians and bureaucrats for their supposed inactivity is easy. Developing a pragmatic response that does not unintentionally make matters worse is hard. Scott Morrison’s government, and that of his predecessor Malcolm Turnbull, cannot reasonably be accused of sitting on their hands. 

A broad package of support for farmers in drought-affected areas has been announced over the past 16 months including additional funding for Rural Financial Counselling Service, extended access to Farm Household Assistance, an increase in concessional loans and the expansion of the drought communities program. Rebates have been introduced for on-farm drought infrastructure such as tanks, troughs and desilting dams. A $500 million Future Drought Fund has been established. Support for affected families is a given, just as we expect the government to help other families that are doing it tough.

The challenge of helping farm businesses survive through climatic cycles while avoiding negative unintended consequences is more complicated, as the Productivity Commission found when it reviewed drought policy in 2009. 

It found that subsidising interest payments on farm loans undermined the incentive for farmers to manage their own risks, for instance by altering farming practices. 

In its annual Trade and Assistance Review released in June, the Commission sounds a note of caution about the proliferation of new finance instruments aimed at helping farmers. It is important to make sure that these measures genuinely make Australians better off, and that they do not merely benefit project proponents, says the Commission. “It is not unusual for government support to expand during periods of drought, though there is value in stepping back and considering the structural support that best serves the farming communities and the country as a whole,” the Commission reports.

It warns that concessional interest rates during the last drought, for example, created a number of perverse incentives and unintended outcomes that made it ineffective in achieving its stated objective of building farmers’ self- reliance to manage climate variability and preparedness for droughts.

“It provided a windfall gain to farms receiving the subsidy and an unjustifiable competitive advantage to recipient farmers compared with non-recipients. It created an incentive to build debt or not reduce debt. The value of the subsidy may have been capitalised into farm prices creating a barrier to entry of new farmers who wish to purchase land. It may have created a disincentive to diversify income sources off-farm.”

Instead the Commission recommends that support should focus on farm households in hardship rather than businesses. Family welfare, in other words, rather than industry welfare.

This, to a large extent, is the approach the Coalition has taken. The asset test for Farm Household Assistance has been effectively removed. There are few if any circumstances in which non-farming families receive such a generous response.

Banjo Paterson’s answer a year after Federation to the question “Who shall deliver us?” seems a little old fashioned in an era when the expectations on government have never been greater. But we know in our hearts he was right.

Men in their bitter grief,
Pray that they get relief,
That help may come from the friendly hand
Of our ally, General Rain.