Developing Equtiable and Affordable Government Responses to Drought in Australia

Once again in 2002 Australian taxpayers are being called on to provide relief to drought-affected farmers. Under the National Drought Policy which has been in place since 1992, support is provided by the Commonwealth Government predominantly in two forms: interest rate subsidies to assist farm businesses and a special welfare payment, the Exceptional Circumstances Relief Payment. Support is available under these programs only to farmers in geographically defined areas which have been declared to be experiencing 'exceptional circumstances'. This paper describes a number of problems with this approach and suggests an alternative form of drought relief based on the Higher Education Contribution Scheme, which is more equitable between farmers, less regressive in its impact on tax payers, and less open to politicisation.

Balancing values in the agricultural policy process

[Introduction]: Since the introduction of agriculture into the international trade debate in the Uruguay Round of Multilateral Trade Negotiations, there has been increased focus on the nature of agricultural support policies in the developed countries. Concepts such as “multi-functionality” have drawn attention to the multiple goals that governments attempt to pursue through agricultural policy and the negotiating construct of the “Green Box” has been introduced to accommodate “legitimate” non-trade concerns such as environmental protection, regional development programs and direct income supports for farmers that are not related to production levels or prices. The Green Box is one of three “boxes” of domestic support, the other two being the Amber Box which contains support measures subject to limits under the Agriculture Agreement and the Blue Box which covers subsides that are tied to programs that limit production. The Green Box provides recognition within the international negotiations that governments use agricultural policies to achieve a variety of objectives from income support to environmental protection. This paper proposes a means for identifying the nature of the balance that is struck by governments between different values competing for support through agricultural policy settings

Income Contingent Loans for Drought Relief: Delivering better outcomes for farmers and taxpayers

Australia’s National Drought Policy is considered to be one of the most advanced in the world, recognising as it does the reality of climate and focusing on adapting farm management to climatic uncertainty rather than simply subsidising agriculture in low rainfall areas. But while the underlying principles of the Policy seem to be sound, after nearly two decades of implementation and incremental changes to the instruments applied under the policy have resulted in the loss of the risk management message, ongoing use of the exceptional circumstances provisions and growing inequities between farmers, and between farmers and non-farmers. In this paper we argue that the objectives of the Policy need to be reaffirmed and key policy changes made to ensure the outcomes of the policy more closely align with its intentions. We analyse financing policy issues and propose the introduction of an income contingent loan (ICL) for drought relief as an equitable and efficient policy instrument for delivering relief to farm businesses experiencing drought, and perhaps for other adverse circumstances. It is argued that such a policy reform would allow farm businesses to take advantage of ICL insurance benefits associated with default protection and income smoothing, while at the same time minimising taxpayer contributions to drought relief.drought relief; income contingent loans; rural policy

Income Related Loans for Drought Relief

There is arguably a consensus that the current approach to drought relief is in need of reform and possibly replacement with an improved government financial assistance mechanism. Grants to farmers, in the form of interest rate subsidies, have several difficulties, which in summary are as follows: i. There are typically too few financial resources to be drawn from government to address adequately and equitably the needs of farms in a dire drought situation. ii. The rationing arising from (i) means that access to assistance requires complex eligibility criteria, resulting in application and administrative processes that are complex and thus expensive for both farmers and government. iii. Grants for drought relief are financed by contributions from all taxpayers, and it is very likely to be the case that this is regressive. Average taxpayers will be less wealthy and have fewer other economic advantages than the majority of farmers assisted through drought relief. This paper outlines the potential advantages and challenges associated with the implementation of income related loan arrangements for drought relief as a possible alternative to the existing interest rate subsidy scheme. The conceptual basis of income related loans is explained, and reference is made to the application of policies of this type in other areas of government financial intervention. The paper addresses the administrative challenges associated with such a policy reform, with reference to the idiosyncrasies of agricultural financing. An illustrative example is offered of what an income related loan applied to drought assistance might mean for the time stream of both revenue for the Commonwealth budget and repayment obligations for farms differing by economic size.income related loans, drought policy, agricultural subsidies

From Black Jack McEwen to the Cairns Group Reform in Australian agricultural policy

[Introduction]: ...This paper describes how Australia moved from an interventionist agricultural policy to the leadership of the Cairns Group during the Uruguay Round. It discusses the dismantling of price supports, stabilisation schemes and the myriad of other government interventions in agriculture and suggests that this process was facilitated by timely political developments which allowed agricultural economists to gain the reform for which they had been calling for years. Following Kingdon (Kingdon 1995), the paper suggests that agricultural economists responded to the policy opportunities offered by political change and were able to pursue their approach to agricultural reform effectively. This change, initially in the form of the 1972 Labor government, produced institutional developments that contributed to a significant shift in the structure of the policy community—the emergence of a market-oriented National Farmers’ Federation—and allowed the new approach to become entrenched

The role of ‘non-knowledge’ in crisis policymaking: a proposal and agenda for future research

Background:Recent complex and cross-boundary policy problems, such as climate change, pandemics, and financial crises, have recentred debates about state capacity, democratic discontent and the ‘crisis of expertise’. These problems are contested and open to redefinition, misunderstanding, spin, and deception, challenging the ability of policymakers to locate, discriminate, comprehend, and respond to competing sources of knowledge and expertise. We argue that ‘non-knowledge’ is an under-explored aspect of responses to major policy crises.Key points:While discussed in recent work in sociology and other social sciences, non-knowledge has been given less explicit attention in policy studies, and is not fully captured by orthodox understandings of knowledge and evidence use. We outline three main forms of non-knowledge that challenge public agencies: amnesia, ignorance and misinformation. In each case, ‘non-knowledge’ is not simply the absence of policy-relevant knowledge. Amnesia refers to what is forgotten, reinvented or ‘unlearned’, while claims of ignorance involve obscuring or casting aside of relevant knowledge that could (or even should) be available. To be misinformed is to actively believe false or misleading information. In each instance, non-knowledge may have strategic value for policy actors or aid the pursuit of self-interest.Conclusions and implications:We demonstrate the relevance of non-knowledge through a brief case study, emerging from the inquiry into the COVID-19 hotel quarantine programme in the Australian state of Victoria. We argue that both amnesia and ‘practical’ forms of ignorance contributed to failures during the early part of the programme

Identifying and measuring agrarian sentiment in regional Australia

In common with much of the Western world, agrarianism—valuing farmers and agricultural activity as intrinsically worthwhile, noble, and contributing to the strength of the national character—runs through Australian culture and politics. Agrarian sentiments and attitudes have been identified through empirical research and by inference from analysis of political debate, policy content, and studies of media and popular culture. Empirical studies have, however, been largely confined to the US, with little in the way of recent re-evaluations of, or developments from, early work. This paper reports on research that seeks quantitative empirical evidence for the existence of agrarianism in the Australian community and seeks to identify its core characteristics. Using a purpose-designed sub-set of items within a large, omnibus-style survey of regional and rural Australia, we demonstrate that agrarianism exists as a scientifically quantifiable concept identifiable through responses to four key propositions: that Australians should support policies aimed at improving the position of the agricultural industries; that working in agriculture and associated industries brings out the best in people; that agricultural producers make a major contribution to environmental protection and biodiversity conservation; and that the development of agriculture in Australia contributed to the development of the national character. We found very little variation in the degree to which different demographic groupings agree with agrarianism. Older people, farmers, and non-Indigenous Australian-born respondents were among those who were statistically significantly more likely to agree with the defining propositions of agrarianism, but their scores were only very slightly higher than those of other sub-populations in the sample