MORE than 1600 cash-strapped farmers throughout Australia - mostly those who have suffered prolonged droughts in Victoria, Queensland and NSW - are potentially headed for a fiscal cliff-face with a ticking clock set to expire on government income support.
The National Farmers’ Federation (NFF) has called on the government to ensure a clear communication strategy surrounds the Farm Household Allowance (FHA) scheme to ensure those farmers aren’t abandoned and know their options, when it expires.
The FHA program was introduced in 2014 as part of new drought policy measures - replacing the Exceptional Circumstances Relief Payment scheme that was only allowed once farmers had been drought-declared in certain regions, by the government.
The current FHA program is limited to just three years in giving Centrelink support payments of $528.70 per fortnight for singles and $477.40 per person, for couples.
It also includes financial counselling services to assist farmers with setting fiscal goals, including examining whether their business is viable and sustainable long-term and if not exploring how to guide a sensible, practical transition for leaving the industry.
Figures obtained by Fairfax Agricultural Media from the Department of Agriculture and Water Resources show that as of mid-December 2016, FHA support was being delivered to 4735 farmers nationwide and overall 6861 claims had been granted, since it commenced on July 1, 2014.
The number of current recipients comprised; 1527 in Victoria; 1342 in NSW; 1311 in Queensland; 401 in SA; 87 in WA; 47 in Tasmania; and 20 in both the ACT and NT.
While the three-year support payments don’t need to be taken consecutively, the figures show almost 35 per cent of current FHA recipients will soon reach the end of their 1095 day entitlement limit.
The Department said as at June 30 last year approximately 1634 farmers had entered their third year and if they continued receiving payments, their entitlements would lapse between July 1 and December 31, this year.
A request put to the Department - via the Department of Human Services - for a state-by-state breakdown of the 1634 farmers entering their third year of payments, was not provided before deadline.
But a Department spokesperson said, “Farmers granted the FHA may leave the program as their financial circumstances change”.
“This type of social security assistance, with its more generous assets and income tests and case officer support, is not available to other non-farm small businesses experiencing financial hardship,” the spokesperson said.
But NFF President Fiona Simson said she was “very concerned” about what would happen when the 1634 farmers soon reached their three year limit for payments as per the FHA scheme which “puts food on the table”.
She said she was also “surprised by the numbers”.
“Initially the FHA scheme took a little while to get going and farmers were a little unwilling to put up their hands but now it’s evident it has been critical and is a scheme that’s been well taken up,” she said.
“It’s also important to point out that three years is a relatively short time in the context of a farming business and even if some of these people have received rain in the meantime, it will take them a little while to produce income again or to sell their farms and put other measures in place.
“I do think it’s important to note, the Productivity Commission recommended in 2009 that the support be available for three years within a seven year time frame.
“I think it’s really important that we look longer term and the government’s clear about what’s going to happen when it finishes, so that these people are not left in the lurch.”
Ms Simson said the NFF had consistently advocated the need for a “clear and concerted” communication strategy around the FHA support program to give farmers confidence they would not be abandoned.
“At the moment that uncertainty must be extremely difficult for these farmers; particularly those nearing the end of their three years,” she said.
“We have always supported preparedness and self-reliance but the FHA is actually putting food on the table at the moment and it is a measure that’s available to the rest of the community through the dole payments where if people are unemployed and unable to generate income, then they receive money from the government to basic food on the table and run and that’s really what FHA is.
“We do need the government to address what is happening here and make sure the communication is clear about what’s going to happen at the end of this scheme.
“What we would say is, the benefits that are available to other members of the community should continue for these farmers that are in hardship, until such time they can either exit the industry or exit their business or make income from it again.”
Ms Simson said the NFF would be holding talks with the office of Federal Agriculture and Water Resources Minister Barnaby Joyce this week where the FHA issue would be raised and on an ongoing basis.
She said if any of the 1634 farmers were still fulfilling the requirements of the FHA scheme then the NFF would like to see their government support extended, beyond the three year limit, if possible.
“The main thing is there’s very clear communication about the scheme and what can happen at this date, when it’s supposedly finished, and that these farmers are given their options very clearly and supported through any transition they need to make through their case workers and/or the scheme itself,” she said.
In addition to fortnightly cash payments, the Department said each FHA recipient had an assigned Department of Human Services Case Officer working with them to set and work toward goals aimed at achieving financial self-reliance.
The Case Officers meet with the farmers in person or on the phone - at least every three months - while they receive the FHA support, to help overcome financial stresses caused by drought.
FHA recipients must also enter into a financial improvement agreement (FIA) as a “mutual obligation” requirement of receiving support, the department said.
The farmer is supported in implementing the FIA through quarterly meetings with their Case Officers and via a $3000 activity supplement.
From July 2016, an additional $1000 was made available for farmers in their third year of FHA payments, to assist with training, advice or other activities that help stimulate financial self-reliance.
“While the government seeks to support FHA recipients in reaching financial self-reliance, this is something the individual farmer must ultimately take responsibility for,” the department said.
“Once a person has received FHA for the full entitlement period, and is thus no longer entitled to FHA, the individual may be eligible to apply for other applicable Australian government social security payments subject to meeting the appropriate income and assets tests.”
Ms Simson said she was unable to comment on whether the Case Officers assisting farmers make tough decisions on the future of their businesses had the right level of expertise to help manage complex decision-making processes.
She said the NFF hadn’t received any information from the farmers themselves about how helpful or not that counselling program has been.
The Coalition government says on average, it is paying out $1.13 million per week to farm families in FHA.
The story Tense countdown on drought support payments for 1634 farmers first appeared on Farm Online.