Amid warnings of a rural recession, the federal government yesterday announced a A$350 million package to help farmers through one of the worst droughts on record.
The package will extend “exceptional circumstances” payments, including income support and interest rate subsidies, until March 2008, covering 18 declared areas in NSW, Victoria, Queensland, South Australia and the ACT.
"This will provide a great deal of reassurance and relief to people in the affected areas," Prime Minister John Howard said.
"I don't need to repeat again how seriously the government views this drought, how challenging it is, what a huge heartache it is for thousands of people on the land and those associated with them."
But the NSW state government says while it welcomes the federal government’s relief package, too few farmers are eligible for the interest rate subsidies.
State Agriculture Minister Ian Macdonald says the government should review its eligibility criteria for interest rate subsidies, the ABC reported.
"The eligibility criteria is far too strict and prevents many farmers - the vast majority of farmers, from accessing this benefit," he said.
'Unviable producers'
While Mr Howard reiterated the government's desire to keep farmers on the land, debate resurfaced as to whether the relief payments were prolonging the misery of unviable producers.
Professor Peter Cullen - who sits on the government's National Water Commission and is a member of the Wentworth Group of Concerned Scientists - said it was time to face reality and stop "drip feeding" farmers to keep them on unviable land.
"Keeping them there maximises their misery and maximises the land degradation, which is what a lot of our current strategy seems to be doing," he said.
But Nationals leader Mark Vaile said today that most Australian farmers run viable operations and should not be paid to leave the land.
"We feel there are not too many farmers still operating that are unviable given an equal set of circumstances,” he told Channel Seven.