Question Time

Drought Assistance

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (14:32): I seek leave to make a brief explanation before asking a question of the Minister for Primary Industries on the topic of drought.

Leave granted.

The Hon. N.J. CENTOFANTI: As reported in The Advertiser over the weekend, there are concerns not only about the impact that the drought will have on farmers themselves but also the impact on regional businesses and the socio-economic impact on the affected regions. There will also be a blow to the state's economy as the headline of the article reads, 'Farmers reeling as drought set to leave multi-billion dollar hole in SA economy'. The estimated loss in the grain crops is around $1.3 billion below average annual grain returns, along with anticipated losses to the wine and other horticultural crops from drought and frost; yet, to date, the minister has resisted calls for assistance to support the agricultural sector that match the magnitude of the challenges being faced.

There is a predicted impact on the whole South Australian economy, as well as farmers and the regions, and the reduced food production can be expected to push food prices upward at a time of cost-of-living crisis. This has the potential to have a negative impact on regional and suburban areas. My questions to the minister are:

1. Can the minister inform the chamber what the impact to the South Australian economy, in terms of dollars, is estimated to be as a result of the seasonal impact so far?

2. What contingencies is the government putting in place around the 2024-25 financial year budget as a result of the predicted impact of the seasonal conditions on the state's revenue?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (14:33): I thank the honourable member for her question. Significant parts of South Australia are now experiencing drought conditions, with most agricultural regions experiencing either lowest on record or at least severe rainfall deficiency for a prolonged period. Many areas of the state are recording significant impacts to production and farm business finances as a result of the low rainfall and, for example, recent frost events as well.

The hoped-for spring rains did not occur in time to salvage crops in many regions, and Grain Producers SA, for example, are now reporting a significantly reduced estimated state harvest. Some of their estimates have been more than 30 per cent less than the previous five-year average, and potentially amount to a likely $2 billion reduction in farmgate value, according to my advice.

Livestock producers are significantly impacted by these conditions with very poor pasture cover due to the rainfall deficit and the high volume and cost of supplementary feeding. Livestock condition remains below average and numbers have significantly increased through livestock markets with ongoing reduced processing capacity.

Each region has unique challenges, including production systems, lived experience of drought, the levels of preparedness, a farmer's ability to manage a challenging season, and particularly younger farmers in regions which have more infrequent dry seasons. The state government provides a range of support services to rural businesses and regional communities affected by hardship and adverse events. Such events might include drought, bushfires, severe floods and storms, biosecurity outbreaks and so on.

A sum of $4.4 million was committed to the Family and Business Support Program over the next four years to ensure the continuation of the FaB mentors and the Rural Financial Counselling Service. There is also commonwealth support through the Farm Household Allowance, Farm Management Deposits Scheme, income tax averaging and other primary producer concessions.

In response to the current seasonal conditions, the Department of Primary Industries and Regions is undertaking a range of activities to actively monitor seasonal conditions and impacts, to engage with industry groups and other stakeholders, and identify additional support measures. Regular monitoring and reporting on seasonal conditions and impacts to primary production in regional communities is occurring through a PIRSA working group intelligence report and, of course, the Crop and Pasture Report. FaB mentors and rural financial counsellors remain activated to support producers, with additional resources being allocated to bolster that support.

A drought industry advisory group, chaired by the chief executive of PIRSA, has been convened to formally engage with industry and government stakeholders to identify industry and community impacts caused by drought conditions and other compounding issues. This group will provide advice to government on activities that strengthen primary producers, primary industries and communities' capacity to cope with, adapt to or change in response to the dry and drought conditions.

Drought round tables are being held across the state with key regional stakeholders to discuss the challenges and issues being experienced, and to identify gaps and potential future actions that might be required. The first round table was in the Limestone Coast on 16 September, and the next one is scheduled for 30 October. I believe the next round table will be held in the Mid North and then other regions will follow shortly afterwards.

PIRSA is supporting Livestock SA and Grain Producers SA to host small-scale community events, which is certainly something that a number of farmers and other stakeholders have indicated to me is really important in bringing community members together. It does so in an informal setting and enables the opportunity to network and to provide an opportunity to extend key messages.

A forum with the financial sector is also being planned to engage with banks on the implications of drought and other adversity, and the impact it is having on farm businesses, and to advocate for additional consideration given the current seasonal conditions. These are some of the actions, and I look forward to further updating the chamber in future.