Drought affected farmers could lose out under cutbacks

DROUGHT assistance for farmers could face massive cutbacks; including abolishing the Farm Finance loans scheme, if the Abbott Government takes up its Commission of Audit recommendations.

The audit released today laid out a reform agenda in a bid to return the Federal Government's budget to surplus by 2019-20.

But to do so, it recommended abolishing the Farm Finance low interest loans for farmers suffering from droughts, cutting back funding on research and development corporations and abolishing trade and export groups.

"The scheme encourages farms to take on more debt, when there is little evidence to suggest that farm businesses that are viable over the longer term have difficulty accessing commercial finance," the report reads.

It further said instead of government helping primary producers during droughts, drought policy should "be to ensure that farmers face incentives to prepare for drought and other climactic conditions".

The report supported the new Farm Household Allowance scheme, due to replace exceptional circumstances in July this year.

It also recommended other changes to agriculture-related schemes, including abolishing all Cooperative Research Centres, reducing government support for Rural Research and Development Corporations and abolishing AusTrade and the Export Market Development grants system.

Across other industries, the audit also proposed abolishing a raft of direct grants and subsidies, including the Rural Financial Counselling Service, ethanol production subsidies, GM Holden grants, Cadbury factory funding, the steel transformation plan and the Clean Energy Finance Corporation.

Topics:  black budget budget commission of audit drought drought assistance farmers

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