Supporting agricultural communities

​​​​​​​​Provide targeted assistance to help primary producers, their families and communities manage adjustment pressures.​

We are responsible for programs to provide targeted support and financial assistance to primary producers and rural small businesses. Some of these, through mutual obligations for recipients, provide incentives and assistance for producers to adopt better-practice approaches to their business management. Others provide assistance and support farm businesses through hardship, such as severe drought.

In the longer term, these programs are designed to result in fewer calls for personal, financial and business assistance for primary producers, their families and communities.

More information is available at Drought and rural assistance.​

During 2015–16, we delivered a number of drought and rural assistance initiatives under the Agricultural Competitiveness White Paper. These include encouraging the uptake of insurance products through the Managing Farm Risk Program, putting in place additional funding for the Rural Financial Counselling Service, and delivering the Drought and Drought Recovery Concessional Loans Schemes.

As part of the government’s dairy support package, we worked with Victoria, South Australia, New South Wales and Tasmania to make Dairy Recovery Concessional Loans available to eligible dairy farmers directly affected by the decision by Murray Goulburn and Fonterra to reduce farm-gate milk prices.

We commenced negotiations with all states and territories on loan settings and delivery arrangements for future farm business concessional loans.

We prepared analysis and advice on a range of issues to government, including briefing on conditions in states particularly impacted by drought. We continued consulting peak finance organisations, farmer organisations and state and territory governments about developing a nationally consistent farm debt mediation scheme. Improving the available information on farm debt was another focus, consulting stakeholders about using the Australian Prudential Regulation Authority to collect relevant data from financial institutions.

We collaborated with a number of government agencies on measures to support primary producers. This included working with Treasury to implement changes to the Farm Management Deposit Scheme that came into effect on 1 July 2016.

We worked with the Department of the Environment and other agencies to facilitate engagement in government climate policies, including the Emissions Reduction Fund. Projects under the fund may provide farmers with an alternative revenue stream to help mitigate financial and climate risk.

We continued to work with the Department of Human Services on the delivery of the Farm Household Allowance program, to provide income support to eligible primary producers.

Annual performance statement

TABLE 2 Annual performance statement—Strategic objective 2: Supporting agricultural communities, 2015–16

Performance measure

Source

Result against performance measure

Primary producers improve their business and personal circumstances through access to financial and business assistance

Corporate Plan 2015–16
Portfolio Budget Statements 2015–16, p.37

During 2015–16, we delivered more than $147 million in financial and business assistance through the Farm Household Allowance, Rural Financial Counselling Service, Drought Concessional Loans and Drought Recovery Concessional Loans. a

Recipients of assistance report improved business management skills and increased confidence to make informed business decisions

Corporate Plan 2015–16

24 farm businesses applied to the Managing Farm Risk Program in 2015–16.
More than 70% of applicants reported that the availability of a rebate under the program encouraged them to apply for an agricultural insurance product.

Funding and grants programs are delivered according to requirements and have a positive end-of-program evaluation

Corporate Plan 2015–16

All programs are delivered in accordance with financial guidelines and reporting arrangements.
There were no end-of-program evaluations in this period.

100% of current Farm Household Allowance recipients have completed Farm Financial Assessments and Financial Improvement Agreements in the required timeframes

Corporate Plan 2015–16

In 2015–16, there were no overdue Financial Improvement Agreements for customers without an appropriate exemption granted. b
As at 30 June 2016, more than 6000 recipients had been granted assistance under the Farm Household Allowance.

100% of eligible Local Government Areas have enhanced social and community support available

Corporate Plan 2015–16

All eligible Local Government Areas in New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia were provided with support.

There are no days of lost service during the transition to new Rural Financial Counselling Service providers

Corporate Plan 2015–16

We implemented a range of measures to ensure continuity of service throughout Australia during the transition to the new round of the program. We did not receive any client or provider feedback that service was disrupted during the transition phase.

Less than 3% of drought-related concessional loans are in arrears greater than 90 days

Corporate Plan 2015–16

At 30 June 2016, less than 1% of drought-related concessional loans were in arrears greater than 90 days

a Loans figures are sum values of loans approved, not necessarily drawn down.
b Based on Farm Value household Allowance recipients completing Financial Improvement Agreements—
source FHA SAP HANA system, Department of Human Services.

Analysis of performance

Providing financial and business assistance

In 2015–16, we delivered more than $147 million in assistance to primary producers through the Farm Household Allowance, the Rural Financial Counselling Service, and concessional loans for those in drought or recovering from drought.

The Farm Household Allowance provides fortnightly income support to eligible farmers and their partners for up to three years while they take action to address their long-term financial security. This provides time for recipients to develop self-reliance strategies and creates an incentive to make significant business decisions where a farm business may be unsustainable.

As at 30 June 2016, more than 6000 people have been granted assistance through the Farm Household Allowance. During the year, we implemented a white paper initiative to provide an additional $1000 activity supplement for recipients in the third and final year of payment through the allowance. This will assist farmers and their partners receiving the allowance to make decisions about their next steps.

The concessional loans schemes provide loans of up to 50 per cent of eligible debt, to a maximum of $1 million. Drought concessional loans are available for a five-year term, requiring interest-only payments during the term. Drought recovery concessional loans are available for 10-year terms, with interest-only payments required for the first five years.

Since 2013–14, a total of 490 farm businesses have been approved for drought and drought recovery concessional loans, to a value of approximately $279.1 million. As at 30 June 2016, there was only one farm business with a drought-related concessional loan in arrears greater than 90 days.

The longer-term nature of these programs means their full effect will not be seen for some years.

Australia’s variable climate means farmers can face considerable financial risks from production losses caused by factors beyond their control. The Managing Farm Risk Program opened in March 2016, and aims to help farmers improve their on-farm risk management through the use of agricultural insurance. One-off rebates of up to $2500 are available to eligible farm businesses to cover half the costs of preparing or applying for a new insurance policy that assists with the management of drought and other production and market risks.

In the first three months of the program, 24 farm businesses applied for the rebate. More than 70 per cent of the applicants reported that the availability of a rebate under the program encouraged them to apply for an agricultural insurance product.

During the year, we also worked with the Treasury to implement changes to the Farm Management Deposit Scheme, which came into effect on 1 July 2016 to help primary producers manage their financial risks. These changes were the doubling of the cap on Farm Management Deposits to $800 000, allowing accounts to be used to offset the interest costs on primary production business debt, subject to banks offering these products, and reintroducing a provision to allow early access to Farm Management Deposits for farmers affected by drought.

​Snapshot: Renewing the Rural Financial Counselling Service

The Rural Financial Counselling Service program provides funding to not-for-profit service providers to provide free financial counselling to farmers, fishing enterprises, forestry growers and harvesters, and small related businesses.

In 2014, the National Rural Advisory Council reviewed the service’s effectiveness and efficiency. The government accepted the majority of the council’s recommendations to enhance the program. In 2015–16, we implemented the recommended changes to take effect under a new funding round from 1 April 2016.

The number of service regions has been reduced from 14 to 12, with improved targeting of funding based on expected demand for counselling services. Services are now also available to forest growers and harvesters.

Service providers have new governance provisions, including skills and diversity requirements for their boards to make sure they are appropriately equipped to manage services effectively.

To support efficient services, we have established a new system—the Rural Financial Counselling Portal—which will enable the improved monitoring and evaluation of providers. From 2016–17, there is a contingency reserve of 10 per cent of total program funding to meet any unexpected demand. This is in addition to targeted funding for drought-affected regions, introduced for 2015–16 in the Agricultural Competitiveness White Paper and confirmed in the 2016–17 Budget.

Through the renewed program, we are aiming to have the majority of clients exit the service within three years. The goal will be to ensure that exiting clients have an improved understanding of their financial position, and have achieved their client plan or objectives towards financial self-sufficiency.

Under the new funding round, service providers are contracted until June 2019.

Photo of 2 farmers standng in front of a tractor 

​Supporting drought-affected communities

In 2015–16, the government allocated a further $20 million to enhance social and community support in drought-affected areas. This measure recognises the effects of drought can be extensive and adversely impact all parts of a community.

Support services included one-to-one counselling, family support services, outreach support, community events focused on mental health and wellbeing, and advice and referrals for people in need living in drought-affected communities. The measure also funded seven officers from the Department of Human Services to coordinate drought services and inform primary producers about the assistance available to their communities.

The Enhanced Social and Community Support measure closed as scheduled at the end of 2015–16. Through this measure, the government delivered additional family and relationship services and community mental health support to drought-affected communities in 73 Local Government Areas in New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia.

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