Fairfax summary: Federal Budget impacts to agribusiness

The 2014 Federal Budget outlined some drastic measures for the agriculture sector – from changes to Landcare to additional RD&E funding. Colin Bettles, Canberra Bureau Chief, Fairfax Agricultural Media, shares his summary of the proposed measures.

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The 2014 Federal Budget outlined some drastic measures for the agriculture sector – from changes to Landcare to additional RD&E funding. Colin Bettles, Canberra Bureau Chief, Fairfax Agricultural Media, shares his summary of the proposed measures.

Agriculture held its ground in this year’s tight federal budget, boosted by a key Coalition election commitment to invest an additional $100 million in research, development and extension (RD&E). Other funding measures included $15 million to assist small exporters with costs, $8 million to improve access to agricultural and veterinary chemicals, and $20 million to build a stronger biosecurity and quarantine system.

Agriculture Minister Barnaby Joyce said the Government had also backed the farm sector by providing a $320 million drought package. The package is underpinned by $280 million in concessional loans that add to the $380 million in concessional loans delivered via the Farm Finance Package approved by the former Government to address long-term viability issues.

On the other side of the ledger, the long-running Landcare program partnering farm and conservation groups is set to undergo drastic changes to save the government $483.8 million over five years. The Caring for our Country initiative is now set to be merged with Landcare to create the National Landcare Program (NLP).

The budget papers revealed the new spend on the NLP would be $1 billion over four years with the merger of the two programs saving $483.8 million over five years – primarily through a reduction in uncommitted funding for future grant rounds.

In last year’s budget, Labor allocated about $2 billion over five years but some of the spending remains in programs which have moved into other government departments.

The Landcare changes will cut $60.7 million from the Agriculture Department out to 2017-18 – but will be off-set by the additional $100 million for RD&E.

Said Minister Joyce: “This has been a tough budget. We’ve had to consider what the priorities are and make sure that’s where the funding goes.”

Budget spending measures for agriculture

  • $320 million over four years in drought support measures including: $280 million in concessional loans; $12 million to assist drought affected farm businesses with installing water-related infrastructure; $10 million to assist farm businesses manage the impacts of pest animals in drought affected areas; and $10.7 million over two years to enhance access to social and mental health services
  • $100 million over four years for a competitive grants program to deliver cutting-edge technology and applied research, with an emphasis on making the results accessible to farmers
  • $20 million over four years for a stronger biosecurity and quarantine system that will enable early response to import- and export-related biosecurity issues, strengthen systems and capabilities to contain biosecurity incursions and focus on improvements to the import risk analysis process
  • $15 million over four years to support small exporters with export costs
  • $8 million over four years to improve access to and registration of agricultural and veterinary chemicals

Major savings measures

  • Creation of a National Landcare Program via a merger of Caring for our Country and Landcare at a cost of $1 billion over four years, saving $483.8 million over five years
  • Closure of the National Water Commission in December 2014, saving $20.9 million over four years
  • Termination of the Office of Water Science research program on 30 June 2016, saving $10 million over five years
  • Cutting Rural Industries Research and Development Corporation funding by $11 million over four years from 2014-15
  • Improving efficiency within the Bureau of Meteorology to save $10 million over four years.

Other budget impacts on agriculture:

  • Cutting $1.8 million over three years from 2015-16 from the Agriculture Advancing Australia – International Agricultural Cooperation Program
  • Ending the Australian Animal Welfare Strategy Program from 1 July 2015 to save $3.3 million over three years
  • Ceasing payments to the States for the Exotic Diseases Preparedness Program on 1 July 2014 to save $1.8 million over four years
  • Ceasing the Leveraging Australia’s Brand for Food Program to save $1.1 million over three years from 2014-15
  • Ceasing the Live Animal Exports – Business Assistance – improved supply chains and Official Development Assistance (Improved Animal Welfare Program) one year early on 30 June 2014 to save $2.3 million
  • Changing arrangements for the payments of memberships to international commodity organisations to save $7 million over four years

For more Federal Budget insight and analysis, visit NAB’s Federal Budget Hub.