The Federal Government has released the long awaited Agricultural Competitiveness White Paper, which it had promised to deliver within 12 months of the 2013 election.
The main focus of the changes are outlined below:
- More money intro Farm Management Deposits
- encouraging investment in water infrastructure and fencing
- investment into roads and dams infrastructure, to boost production and make it easier for that product to reach markets.
- Gov to send five new agricultural trade counsellors overseas to help open up markets for Australian food products.
- $11.4 million boost to the Australian Competition and Consumer Commission to “encourage fair-trading and strengthen competition in agricultural supply chains”.
The major areas are outlined below:
Dams and water infrastructure
- $300 million to the National Water Infrastructure Fund. The recently released Northern Australia White Paper established that fund with $200 million.
- $50 million will go towards scoping studies to investigate opportunities for new dams and water infrastructure nationally, with $450 million to be available for construction. It is not clear where exactly those dams might be expanded or built.
Tax changes to help farmers help themselves
The White Paper contains a range of measures designed to help farmers improve their financial position, become more profitable and be more able to weather hard financial times like droughts.
- Tax incentives and changes to the Farm Management Deposit (FMD) scheme will be warmly welcomed by farmers, who have long argued for tax reform.
- The government’s tax breaks for fencing, fodder and water infrastructure were announced in the 2015 Budget and have already taken effect.
- From July 2016, farmers will be able to use FMDs to offset their business loans, reducing interest costs.
- Farmers will be able to double their FMDs to $800,000 from the middle of next year, and will be able to access their FMDs as needed (in drought, for example) without losing tax concessions.
- Farmers will also be able to opt back in to income tax averaging after 10 years, from July 2016.
Government commits to drought loans for the next decade
- A new concessional loans scheme for drought-affected farmers will run for the next 11 years, with up to $250 million made available for loans each year.
- The White Paper contains almost $23 million to “increase Farm Household Allowance case management for farmers”, which the documents say will “boost support for recipients in their final year of payment by increasing case management and the activity supplement”.
- The Farm Household Allowance itself provides income support for farmers suffering drought or any other kind of financial hardship – effectively, to put food on the table – for up to three years.
- In the 2015 Budget, the government allocated $615 million to fund the Farm Household Allowance scheme for the next four years.
Rural research boost not enough to outweigh previous cuts
- an additional $100 million to extend the Rural R&D For Profit program out to 2021-22, bringing the government’s total commitment to that program to $200 million over eight years.
- $1.2 million for the Rural Industries Research and Development Corporation (RIRDC). But that doesn’t restore previous levels of funding to an organisation that lost 15 per cent of its funding in 2014, when the Federal Budget cut RIRDC’s base funding by $2 million for 2014-15, and scheduled a further $11 million cut over the following four years.
- The White Paper does include $1.4 million in federal money to match new levies in the export fodder and tea tree oil industries.
- There’s also money for pest control: $50 million to manage established pests and weeds, and another $50 million “for increased emergency eradication and national response capability” in the event of a biosecurity emergency, such as the outbreak of a serious exotic disease
- commitment of $200 million to boost biosecurity “surveillance and analysis” nationally. That includes $12.4 million for Indigenous Rangers announced as part of the Northern Australia Development White Paper.
- $12.4 million to improve traceability of Australian products exported overseas, which the government says will maintain confidence in Australia’s clean green reputation for food, and respond to incidents.
- Trade champions appointed overseas markets
- $31 million to “break down technical barriers to trade”, including through the appointment of five new agricultural counsellors to overseas posts.
Funding for agricultural co-ops information campaign
- $13.8 million for a two-year pilot program “to provide knowledge and materials on co-operatives, collective bargaining and innovative business models”, to help farmers “establish alternative business models (including co-operatives) and manage contract negotiations.”