A new Australian Government drought plan

Regional Investment Corporation 2
Submission - Consultation draft of the Australian Government Drought Plan

Appendix A

Consultation Questions

Q1. Is the Australian Government’s approach to drought across the drought cycle clear in
the draft plan?
Yes. The draft plan effectively encapsulates the wider drought picture and brings together the
supporting mechanisms and manner in which the Australian Government is to manage and
respond to the various challenges throughout the different stages of the drought cycle.

Q2. Is the draft plan clear as to why the Australian Government’s drought policy and
response is different to that for natural disasters?

Yes.

Q3. Does Pillar 1 – Evidence based decision-making provide greater clarity about when,
why, how and what the government will consider when determining its response to
drought?
RIC is aware of the ongoing debate from the broader farming community with many farmers
not having the understanding of when, why and how government considers its response to
drought and the drought programs available to farming businesses and communities.
The draft plan captures the broader decision-making process, which is supported by the
outlining of initiatives and actions taken into consideration by government when determining
its response to drought. For example, the work of the Bureau of Meteorology, the Drought
Response Framework and the Australian Agricultural Drought Indicators (AADI).

Q4. Does Pillar 2 – Strategic drought support provide greater clarity about how the
Australian Government will respond across the drought cycle, including what support
it will not provide?
RIC notes the importance of having a clear and concise plan to bridge the knowledge divide
and provide clarity to questions prudent to addressing the role of many stakeholders and the
programs they offer throughout the drought cycle in supporting farming businesses and
regional communities.
The draft plan clearly articulates and provides the right level of detail on these roles, the
delivery of support programs and tools available to enable drought preparedness, risk
management and financial self-reliance.
On page 13 in the 2nd paragraph of the section “Incentives and tools for farming businesses”
reference is made to the RIC and that our concessional loans are for “…farming businesses in
financial need…”. Our eligibility criteria are broader than just “farm businesses” and “in
financial need” and therefore we would recommend a change in the wording to “…farm
businesses or farm-related small businesses that meet the eligibility criteria…”
Regional Investment Corporation 3
Submission - Consultation draft of the Australian Government Drought Plan

Q5. Have you identified any gaps in how we have responded to any of the review
recommendations in the draft plan?
The Department of Agriculture, Fisheries and Forestry’s (DAFF) objective to improve and
modernise the Australian Government’s National Drought Plan represents an equally important
undertaking in helping to deliver an operational and financially sustainable and confident
broader agricultural sector.

Pillar 2 Strategic drought support - Facilitating Recovery
When promoting measures for farming communities / non-farming businesses, reference is
made to the Rural Financial Counselling Service, Small Business Debt Helpline, and targeted
mental health and wellbeing support.
Noting that the content of specific drought programs in the draft plan is out of scope,
consideration could be given to including commentary on the government financially
supporting those businesses reliant on farming industries, for example, harvesting and fencing
contractors, carriers, stock and station agents and businesses dealing in agricultural
equipment and repairs.
RIC’s AgBiz Drought Loan for farm-related small businesses was added to our product suite
in 2020 in response to the drought, recognising the post-farmgate impacts on regional towns
when farm businesses are under financial pressure. The AgBiz Drought Loan is a current RIC
product available to help eligible drought-affected small businesses mitigate the effects of
drought on their business and improve their long-term strength, resilience and profitability. To
be eligible for the AgBiz Drought Loan, a substantial part of the turnover of the small business
must be from supplying primary production related goods or services to farm businesses in
affected areas. The small business must also be in financial need of a loan due to the impact
of drought, have fewer than 20 employees other than casual employees, have sound prospects
of long-term financial viability and meet all additional eligibility criteria. Mention of this type of
support could also be include in the Drought Plan.

Q6. Do you have any comments on the work underway for us to consider as we progress
it?
Pillar 3 Working together - Partnering with First Nations Australians
RIC welcomes the establishment of a First Nations Advisory Group to provide advice to the
Department of Agriculture, Fisheries and Forestry (DAFF) on issues relating to drought and
climate resilience.
As a delivery agency for DAFF, an opportunity for RIC to be involved in this partnership exists
to ensure financial support for First Nations farming businesses / individuals is co-designed
and tailored to meet all parties’ requirements and needs.
Pillar 4 Learning and improving
The draft plan identifies the need for an effective overarching monitoring, evaluation and
learning (MEL) framework to complement existing MEL activities for drought programs at the
program level (Framework to be developed in 2024-25).
RIC loans currently have a 10-year loan term, and over any given period, changes will occur
for a farming business. These changes are important to document, monitor, analyse and feed
back into the policy development process to make improvements where appropriate.
Regional Investment Corporation 4
Submission - Consultation draft of the Australian Government Drought Plan

As RIC continues to improve and embed the necessary collection, collation, reporting and
analysis of data from its concessional loan program evaluations and its strong customer base,
key insights and detailed data on financial impacts of drought can be provided to government
to assist in tracking and demonstrating the progress and effectiveness of financial support,
help inform and support government’s policy development and assist with determining if
medium to long-term policy objectives have been met.