Aid making us reliant on welfare

A farmer with a key role in the administration of the Federal Government's Exceptional Circumstances drought assistance yesterday joined the call for a shake-up of the program, saying some farmers are at risk of becoming welfare-dependent.

Keith Perrett, chairman of the National Rural Advisory Council, said the system had to change because Exceptional Circumstances was supposed to provide short-term relief, but many farmers were spending years getting income support and interest rate subsidies. His council advises the Agriculture Minister when regions apply for Exceptional Circumstances status.

Mr Perrett said: "EC support has become long-term and we are at the risk of beginning to see a cycle of welfare dependency amongst some farmers.

"Government programs need improving to encourage all farmers to prepare for drought and climate change. The best way to manage for drought is starting with a strong business and appropriate risk management skills."

The smallest 40 per cent of farms accounted for just 3 per cent of Australia's agricultural output, he said. "In general, these smaller farms have no written business plan, risk management strategies or other preparedness measures."

At present about 24,000 farming families - 20 per cent of the farm sector - are getting Exceptional Circumstances income support, Mr Perrett said. Exceptional Circumstances was designed to cover the kind of drought that comes along every 20 to 25 years.

The Australian Bureau of Agricultural and Resource Economics Outlook 2008 conference in Canberra was told by the Prime Minister, Kevin Rudd, on Tuesday that drought assistance would be reviewed and more emphasis placed on making farmers resilient to drought so they do not need welfare.