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Australia's Drought-Stricken Farmers May Get A$3 Billion in Aid

Published on 25 September, 2007, Last updated at 03:37 GMT
By Gemma Daley

Australian farmers suffering the worst drought in a century may receive a total A$3 billion ($2.6 billion) in aid, Deputy Prime Minister Mark Vaile said before Cabinet meets in Sydney today to discuss more assistance.

``We have to make sure the farming families across Australia get through this devastating drought,'' Vaile, the leader of the rural-based Nationals party, told Australian Broadcasting Corp. radio. ``Assistance is already going north of A$2 billion and could reach A$3 billion.''

Government ministers will discuss plans to make it easier for farmers to access financial support and help with paying farm debt, Vaile said. Cabinet will also discuss increasing farmers' access to water.

Australia is struggling to recover from the worst drought in a century, which sliced 0.75 percentage points from economic growth last fiscal year. The lingering dry is threatening crop production this harvest, helping send wheat prices to a record and forcing farmers to sell livestock they can't feed.

Prime Minister John Howard said Sept. 17 the government would allocate a further A$430 million to farm relief. Howard trails the opposition Labor Party in opinion polls and is seeking to garner the support of farmers and rural Australians before an election he says will be held before Christmas.

``We have to make it easier to access household support and interest-rate support,'' which are subject to asset and income tests, Vaile said. ``Irrigators who have access to high security water are also facing zero allocation and could lose their permanent plantings, their orchards and their vineyards.''


Economic Impact

Agriculture makes up 12 percent of the economy, produces a fifth of Australia's exports and directly and indirectly employs 1.6 million people, according to the National Farmers Federation.

``The Australian economy can't survive without agriculture,'' Vaile, a former wrangler and farm machinery salesman, said today. ``We can't survive without our agricultural industries and we are fortunate to be in a position to help them out until the drought turns around.''

The government has also asked Australian lenders to be more ``compassionate'' to farmers, Vaile said. The Nationals party, with 17 members of parliament, is the smaller member of Howard's ruling coalition.

``We want to make sure financial institutions are compassionate in the way they are dealing with this,'' Vaile, 51, said. ``The last thing we want to see is banks that toughen up on their criteria.''


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