Introduction
3.1
This chapter outlines the broad support for the Australian Government's focus on drought preparedness offered by witnesses and submitters and the evidence which suggests that there are some areas for improvement at both the strategy level and individual program level—chiefly in relation to the $5 billion Future Drought Fund (FDF).
Preparedness
3.2
As noted in Chapter 2, the Drought Plan states the Australian Government's vision for drought management: '[t]o have farm businesses and rural communities that are prepared for, and capable of managing, drought in pursuit of a prosperous and sustainable future'. Consistent with this, the Australian Government has increasingly prioritised interventions which support long-term drought preparedness and risk management, rather than crisis responses.
3.3
The vast majority of submitters welcomed this concept of preparedness. For many industry participants, this meant encouraging self-reliant, sustainable approaches to manage business risks through improved decision-making. Others, such as the Australian Local Government Association (ALGA) and the National Mental Health Commission, stressed a need to build community resilience by investing in local leadership, employment, infrastructure and mental health. A further concern related to water management. These areas are considered in more detail elsewhere in this report, but are highlighted here in order to foreshadow the essence of submitter views.
3.4
The committee received overwhelming evidence that drought support should aim to build preparedness. For example, the Red Meat Advisory Council (RMAC) argued that it is 'vital that we continue to prepare for future droughts', while the Tasmanian Farmers and Graziers Association (TFGA) noted that 'it is [] imperative to prepare for future droughts'.
3.5
The RMAC also noted that '[t]he advice and recommendations from previous drought inquiries overwhelmingly points to better preparedness and support while conditions are good, in order to create greater resilience when drought returns'.
3.6
Similarly, the Coordinator-General for Drought reported in 2019 that preparing for drought, rather than responding to it, is the best approach.
3.7
Several submitters emphasised the need for ongoing preparation despite recent rain. GrainGrowers held the view that preparedness 'is essential in the context of a changing and variable climate which is impacting how and where we produce Australia's food and fibre'.
3.8
Mr David McKeon, Chief Executive Officer, GrainGrowers, explained that now is the 'best time to be talking about drought support and whether it's effective—when we're having a great season and we're not in crisis'.
3.9
Ms Hannah Wandel OAM, Executive Director, Drought, National Recovery and Resilience Agency, told the committee that '[e]ven when it is raining, we need to be planning for the next drought'.
3.10
Likewise, Mr Tony Mahar, Chief Executive Officer, National Farmers' Federation (NFF), stated that '[n]ow is the time to talk more about drought, prepare for drought, review those policies and programs that are in place and try to get some more certainty for when the next big drought comes'.
Reactive in-drought support
3.11
Despite widespread support for the Australian Government's focus on preparedness, some submitters raised concern that drought assistance remains crisis-driven rather than proactive. This evidence is explored below and in subsequent chapters.
3.12
The ALGA reported that councils 'felt that the Government was reactionary and not preparing for future drought'. It raised concern that drought assistance was merely addressing the symptoms of drought, rather than the cause or limited resilience.
3.13
The ALGA also expressed concern regarding 'the loss of corporate memory both between drought and within drought'. It noted that government action 'tends to slow or stop once the drought ends and only recommence when a new drought occurs'.
3.14
Likewise, the RMAC lamented that 'once it rains and conditions are favourable, drought appears to become a forgotten issue despite knowing that it will return.' The RMAC argued that the:
… inherent politicisation of drought, and the fluctuating effectiveness of regional policies has meant that governments have not focused on putting measures in place that truly incentivise and enable as many farm businesses and regional communities as possible to genuinely become better drought prepared.
3.15
The committee notes that as part of its review of the Australian Government drought response, the National Drought and North Queensland Flood Response and Recovery Agency (NDNQFRRA) found that 'Australian Government in-drought support has often been reactive rather than proactive'.
Future Drought Fund
3.16
The committee received evidence from inquiry participants, such as GrainGrowers and Cr Mark Reeves, Deputy Mayor, East Gippsland Shire Council, welcoming the Australian Government's commitment of ongoing funds toward drought preparedness under the $5 billion FDF. The following section outlines the evidence received in relation to the FDF, including evidence which suggests that there are some areas for improvement in terms of FDF processes and the programs which it funds.
Establishment
3.17
Under the National Drought Agreement, the Australian Government is responsible for establishing and operating a FDF to enhance drought preparedness and resilience. The Australian Government announced the $5 billion FDF as part of its Mid-Year Economic and Fiscal Outlook
2018–19.
3.18
The FDF was established in September 2019 by the Future Drought Fund Act 2019 (Cth) and began with $3.9 billion, drawn from the discontinued Building Australia Fund. Earnings will be reinvested by the Future Fund Board of Guardians until the balance reaches $5 billion (expected in 2028–29).
3.19
From 1 July 2020, the FDF has made $100 million available each year to invest in drought resilience programs. Despite the Australian Government's decision to establish the FDF in 2018, and the announcement of eight programs on 1 July 2020, a number of programs under the FDF did not commence until mid-2021. Current FDF programs are discussed below.
3.20
The Drought Resilience Funding Plan 2020 to 2024 (Funding Plan) sets out three inter-connected strategic priorities for the FDF:
economic resilience for an innovative and profitable agricultural sector;
environmental resilience for sustainable and improved functioning of farming landscapes; and
social resilience for resourceful and adaptable communities.
3.21
In line with these strategic priorities, the Funding Plan states that funded projects aim to support:
an innovative and profitable farming sector;
a sustainable natural environment; and
adaptable rural, regional and remote communities.
3.22
In addition, funded projects must enhance the public good. This means that:
… the benefits generated by the funding must be able to be accessed and/or shared by many (public benefits), rather than be captured solely by individual businesses or industries solely for private commercial gain.
Programs
3.23
According to the Department of Agriculture, Water and the Environment (the Department), the FDF is a long-term investment fund that will provide a sustainable source of funding to help Australian farmers and communities become more prepared for, and resilient to, the impacts of drought.
3.24
Eight FDF programs were announced in July 2020. Current FDF programs are set out below:
The Climate Services for Agriculture program will fund the development and delivery of interactive digital 'climate information services' for the agriculture sector to assist farmers to make real-time decisions.
The Drought Resilience Self-Assessment Tool will provide an online self‑assessment tool for farmers to self-identify drought risks based on a range of social, economic and environmental indicators, and take action to build the drought resilience of their farm business.
The Drought Resilience Research and Adoption program will invest in collaborative research, development, extension, adoption and commercialisation activities.
The Drought Resilience Soils and Landscapes program will fund regional bodies to undertake projects to build drought resilience of natural resources on agricultural landscapes and there will also be grants available to organisations, farmer groups and individuals to undertake projects to build the drought resilience of natural resources on small scales.
The Networks for Building Drought Resilience program will support community-driven projects that enhance drought resilience and strengthen networks, including small-scale infrastructure projects to make community facilities drought resilient.
The Drought Resilience Leaders program will develop leadership capability in communities and include a mentoring component to foster uptake of innovative practices to build drought resilience of farmers and their businesses.
The Farm Business Resilience program will provide farm businesses with training to strengthen their strategic business management skills and develop a farm business plan to build risk management capacity and drought resilience.
The Regional Drought Resilience Planning program will provide funding to consortia of local councils or equivalent entities to develop Regional Drought Resilience Plans for agriculture and allied industries.
3.25
There have been a number of announcements in recent months to deliver programs under the FDF:
On 19 April 2021, the Hon David Littleproud MP, the then Minister for Agriculture, Drought and Emergency Management, announced eight Drought Resilience Adoption and Innovation Hubs.
On 25 May 2021, the first of two funding rounds opened for the Networks to Build Drought Resilience program, with the second to open later in 2021.
On 17 June 2021, applications opened for the Drought Resilience Leaders program, starting with two pilot regions before rolling out to a further 10 regions in October 2021.
3.26
As part of the 2021–22 Budget, a series of funding announcements were also made to commit funds under the FDF to continue existing programs.
Areas for improvement
3.27
As noted above, implementation only commenced in mid-2021 for a number of the FDF programs. Because of this, Mr Mahar advised that 'it's early in the process at the moment to actually see if the Future Drought Fund has selected the right programs and policies'. Nonetheless, the committee received evidence outlining areas for improvement in the types of projects which are supported by the FDF. The committee also received evidence regarding the Productivity Commission review of the Funding Plan. This evidence is explored below.
Types of projects supported
3.28
GrainGrowers' view was that funding decisions should prioritise new initiatives 'which must be measurable in their impact and ability to deliver for farmers irrespective of their size or commodity type'.
3.29
Similarly, Mr Mahar expressed high hopes for the FDF and called on the Australian Government to try new ideas:
… as we all know, drought policy for the last 100 or 200 years has not worked that well. We still have people in drought being missed by the assistance measures. So for us it's using the fund to think outside the square and think in an innovative way to say, 'What can we do that we haven't done before that might work?'
3.30
In particular, Mr Mahar emphasised the importance of investing in technology:
We need to make sure that we're getting the most out of the existing technology. Whether that's BOM or technology on farm for sensors and water efficiency and those sorts of things, technology can be a great weapon to fight the war on drought.
3.31
For the TFGA, it is important that the FDF aligns with the National Agricultural Innovation Agenda. It also highlighted the need to ensure that efforts are not duplicated and funds are invested as efficiently as possible.
3.32
This concern was echoed by GrainGrowers. It argued that the FDF 'should not be used to cost shift existing Commonwealth or state funded activities or programs'. Instead, the FDF should 'be used to accelerate activities or practice change that wouldn't happen without it'.
3.33
Commenting on the four-year period during which each Funding Plan is in force, GrainGrowers argued that '[t]here needs to be long-medium and short‑term strategic programs that span beyond the four-year plan'.
Review of the Funding Plan
3.34
Each Funding Plan will be reviewed by the Productivity Commission before it expires to assess its effectiveness with regard to economic, social and environmental outcomes.
3.35
GrainGrowers welcomed this measure as a suitable independent process to ensure drought remains on the agenda. However, in a submission which it made as part of the Department's consultation on the draft Funding Plan, GrainGrowers argued that this review process should not be limited to making comment on the effectiveness, efficiency and impact of the FDF's programs, but drought and resilience measures more broadly. It submitted that this 'will provide a complete picture of the level of preparedness and resilience and encourage alignment of effort and focus'.
Committee view
3.36
Because drought is a recurrent feature of the Australian landscape, the Australian Government must not only provide short-term support to farmers, communities and businesses in immediate need, but also provide longer term assistance for structural adjustment and drought preparedness. In addition, the implications of climate change for agriculture highlight the need to prepare before droughts have arisen.
3.37
The committee has repeatedly heard concerns that Australian Government drought support tends to be reactive, rather than proactive. This causes uncertainty amongst farmers and communities and means that support is not always available when it is needed most.
3.38
This was a particular source of frustration for farmers. The NFF highlighted this point, stating that ad hoc drought assistance measures during drought 'can undermine drought preparation and resilience measures'.
3.39
It is clear that the future direction of drought policy should focus on investing in resilience and preparedness for future droughts and climate variability when farmers and communities are not in drought. For the long-term health of the agriculture sector, this needs to be done in ways that promote resilience and improved productivity and allow for adjustment and change.
3.40
There is no doubt that the Australian Government has begun the job of investing in preparedness and resilience measures and can point to various initiatives that have been, or will be, undertaken in pursuit of its objectives for drought policy and reform. The Australian Government's FDF to support research and innovation is a good example of this approach.
3.41
The committee acknowledges that while the FDF was initially plagued by slow progress, it has since introduced eight programs which enjoy a broad level of support from stakeholders. It is equally clear, however, that there remain a number of areas for improvement. In particular, a deliberative, transparent process for developing and prioritising projects and funding is required.
3.42
The committee recommends that the Australian Government develop a deliberative, transparent process for Future Drought Fund projects and funding.