Cobey Bartels. Edited for online by Joshua Bristow
Farmers are worried that the upcoming budget may include cutbacks in drought assistance along with reduced funding for agricultural research and development after the Commission of Audit suggested such changes.
Between 2013 and 2015 the Australian Government offered $280 million for concessional loans to drought-affected farmers.
These loans were offered to assist farming businesses in debt restructuring and preparation for further hardship along with assistance for Rural Research and Development Corporations.
National Farmers Federation president Brent Finlay says the Federation is apprehensive about these budget uncertainties and the possible implications for farmers.
“We are really concerned about the budget, I’ve spent the last two weeks in Canberra and I’ll be here next week to hear what is in the budget at this stage we are not hearing anything concrete about agricultural programs that will be cut.”
Mr Finlay says the money made by the Government in interest should justify keeping the low interest loans for farming businesses.
“They are loans, they have to be paid back. But they also put pressure on commercial operators to actually sharpen their pencils and write loans at a lower rate which helps the agricultural community,” Mr Finlay said.
He says cuts to agriculture could negatively affect the Australian economy, affecting trade and exports.
“Any cuts to Agricultiurce that would affect competitiveness of the sector both domestically and internationally actually affect the country. Because we are the solutions to this economy by bringing income into Australia for the products we sell overseas.”
Mr Finlay says the area most critical to agricultural development is research and development, with potential cuts causing concern.
“We are very concerned about the amount of money that’s being allocated to Research and Development now and into the future,” he said.
“Productivity has actually started to decline in agriculture and the way to drive productivity outcomes is R and D.”
Queensland cattle farmer Pat Forbes says some farmers have no other choice than to use the loan assistance to survive a bad season.
“Some farmers may choose to take these loans on to get them out of a hole and it’s just punching up an increasing debt that they already have due to bad season upon bad season,” Ms Forbes said.
She says the loans are often used to ensure development to much needed infrastructure.
“Honestly in farming it is just about hand to mouth, you do what you can afford and what you cannot afford will not get done. And therefore you are done on production because you can’t afford those improvements in your infrastructure to improve production.”
Chief Executive Officer of Cotton Australia Adam Kay says the Commission of Audit recommendations are not well thought out.
“We find the recommendations of the Commission of Audit counter intuitive, it is only a few weeks ago that we were providing submissions to the Federal Government of the competiveness of agriculture for the agriculture white paper,” Mr Kay said.
He also says research and development cuts will affect more than just agricultural trade, with CSIRO losing significant royalties.
“The R and D part too is that our industry generates about 20 million in royalties to the CSIRO annually and the Commission of Audit doesn’t factor in that, that’s a result of the R and D investment.”