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Farmers quantifying the impact of drought on farm enterprises and across large areas.

David H. Jones

Department of Primary Industries, Victoria, 30 Prospect Street Box Hill, Victoria, 3128. Email


The paper describes an approach to empower drought-affected farmers to organise themselves and obtain a clearer understanding of their overall circumstances as a community. Drought conditions since 2002 have impacted on many areas of Victoria, resulting in varying degrees of hardship for farm families, traders and local communities dependent on a thriving farm economy. Establishing what the wider community situation is can be difficult because statistics adequately reflecting the drought impact on farmers in their specific area are usually not available and, although the impact of drought can be seen, it is not always easily “measured”. The paper discusses the need for the approach adopted and some of the problems farmers face in trying to quantify their situation. The paper looks back at several situations and the impact the approach had in those areas where there was the ample anecdotal information, and the tendency to reiterate generalisations when in reality there was a scarcity of quantifiable data. This paper addresses the problem of how to assist farmers develop information that is consistent across areas, provides quantification on the impact of the drought on the farming population and can form the basis for seeking assistance from governments. The paper will discuss the interest from organisations outside Victoria and comments from financial counsellors involved in empowering the community to establish realistic and widely applicable data across geographic areas claimed to be suffering from drought.

Three key learnings: (1) Providing clear organised procedures with objective criteria empowered farmers to clearly explore their options during the drought. (2) All stakeholders are able to gain an objective understanding and extent of the drought impact in an area. (3) The process is community driven.

Key Words

Farmer empowerment, measuring drought impact, case studies, farm survey


Recent droughts have impacted on many areas of Victoria resulting in varying degrees of suffering for farm families, traders and local communities dependent on a thriving farm economy. Unlike other emergencies such as fires or floods droughts can be quite insidious in that the commencement is difficult to pinpoint, and the end is often vague, leaving farmers seriously questioning when they should reinvest. The uncertainty is characteristic of areas suffering drought.

If drought conditions persist in excess of 13 months and result in two failed growing seasons, farmers may be eligible for financial assistance from the Commonwealth Government. The assistance, the “Agriculture Advancing Australia” package of programs released in 1997, aims to increase farmer skills in risk management. The package recognised that there may be exceptional circumstances that are outside the normal risk management planning, such as an extreme event that has a severe and prolonged impact on farm incomes lasting for more than 12 months.

For the farmers to receive Commonwealth Government assistance, the Information Handbook for Exceptional Circumstances Assistance, (DAFF 2001) advises farmers to enlist the assistance of the local and state government to demonstrate that the farming situation meets the criteria for Exceptional Circumstances. The three major criteria are:-

(a) The event must be rare and severe. A rare event is considered to be one that may occur once in 20 to 25 years. Severe is considered a significant impact on the agricultural sector in the area. This is often translated to be impacting on a majority of the farmers across a majority of the area.

(b) The farm situation will not easily recover.

(c) The impact is prolonged.

Establishing the farming situation across a wide area can be difficult for communities because statistics adequately reflecting the drought impact in an area are not usually available. The farmers can be reluctant to discuss their economic performance in open forums. Economic and productivity information collected by the Bureau of Rural Sciences rarely has sufficient cases directly in the geographic area in question to clearly indicate the impact of drought on farming. For communities trying to clearly state their situation there is the problem of masses of anecdotal information but a scarcity of quantifiable data.

To progress an application the community needs the information to demonstrate the validity or otherwise of their situation. If the data indicates an impact, The Victorian government provide broader statistical, industry and climate data in an official application to the Commonwealth Department of Agriculture, Fisheries and Forests. If this application is satisfactory, a detailed visit by the Natural Resources Advisory Council, (NRAC) to meet a large number of farmers occurs.

Thus both the initial application stage and the subsequent visit stage require sound data on the impact of the drought on the farming community.

In the past governments have relied on short tours to assess farmers and/or one-off studies of a small number of farmers who would provide details of their financial performance over the previous 3- 4 years. This can be time consuming if farmers do not have all the figures of the past few years immediately to hand. Therefore a better method of gathering information precisely from those areas and industries where the affected community believe they are experiencing drought, and to enable those farmers meeting with the Commonwealth staff to be effectively prepared.

What was needed was a community driven method whereby a large and diverse number of farmers in the drought areas could clearly demonstrate the impact.

The Problem

To assist farmers develop data that is consistent across areas, provides quantification on the impact of the drought and can form the base for consideration of an application for assistance.


Large-scale case-study approach.

The approach developed is to provide a standard set of questions to farmers in those geographic areas claimed to be suffering from drought. This enables large amounts of data, in some situations over 90 cases, to be assembled in a relatively short period of time. A sample of the form is in Appendix 1. Each data set is referred to as a “case study.” Farmers do not have to put their name on the form, however all farmers record the distance to the closest town and postcode. The distance to the closest town establishes the extent of the geographic area. Data is then amalgamated and graphed to show the trend for all the relevant questions.

History of the approach

The evolution of the case study form emerged from the processes associated with investigating areas for exceptional circumstance, in 2003 in South Gippsland where there was a diverse mix of agriculture including horticulture and mixed farming and little material evidence of the extent of the impact. In such a situation the BRS data was unable to provide adequate samples or cover an adequate area.

Farmers felt at a loss on how to proceed to demonstrate their situation. To prepare farmers on the information to have immediately ready for a meeting with NRAC, a simple one-page questionnaire on the main issues that farmers need to demonstrate for an EC declaration was developed by DPI. The questions were trialed with traders, Rural Financial Counsellors and rural representatives of the Victorian Farmers Federation with the overall aim of assisting farmers quantify what they had been through over the previous four years in a way that would answer the likely questions from the Commonwealth. The resulting one page (double sided) could be adapted for any type of agricultural enterprise, for example dairy only, or horticulture), and covered:

  • financial impact of the drought on farm income,
  • the impact of the drought on productivity
  • an estimate of the time required to recover
  • details of how the farm performed over the previous four years.

When collated and made available back to the local community committee the trends become very transparent. In the two graphs below, it becomes clear that when interpreting farm receipts and available farm cash after farm costs, some farmers may be maintaining their productivity by large borrowing’s that show up in the equity and debt graphs. By collating the information into summarised graphs such as these, the privacy of individual farmers at open meetings is protected while allowing a better understanding of the magnitude of the impact to be assessed by the Commonwealth.

In 2004/05 the form underwent modifications. Further discussions with the Commonwealth saw a congruence of ideas with both the State and Commonwealth agencies inputting to the questions. The use of a common set of questions, a format that can be easily adapted for all farming enterprises, and the use of DPI staff to analyse and develop trend graphs for use in the written application, has been part of the Victorian process in the last four EC submissions.

Figure 1 below shows a sample of data for an area in northern Victoria. The situation in this area clearly reflects that for the large number of farmers surveyed, (sample size 79) costs were in excess of receipts for three out of five years.

Figure 1. Information on farm receipts, farm costs and available farmcash from a farming area seeking to establish the impact of drought on farmers.

Distribution of the form.

To guide the development of an application for Exceptional Circumstance in Victoria, a community committee is encouraged to form, with representatives from Local Government, local Rural Financial Counsellors, (RFC) the local Victorian Farmers Federation, (VFF) and farmers, and chaired by a community person. DPI staff provide technical and statistical services to the panel.

Distribution of the forms is the responsibility of the community committee, who organises members, for example through the local VFF representatives and /or the RFCs, to circulate forms to farmers in the area. The forms are circulated to as diverse and large a population as possible to ensure the overall trends in the area can be identified and described. The distribution targets farmers that have a record of successful farming enterprises prior to the dry conditions. The forms are returned to a DPI staff member who collates the information and graph trends, such as the sample below, (Figure 2).

Figure 2 clearly shows the value of a large number of samples. Discussing debt levels, amount of profit, level of equity in their farm is not something that many farmers are comfortable doing in a large meeting or where individual data can be identified. Having assembled the details and amalgamated the information, it makes it much easier to interpret the farm performance across a broad area while protecting the privacy of individual farmers.

The graph below reveals the extent to which farmers are maintaining their productivity by large borrowings. Farmers are willing to provide this information when they know that their individual data will be amalgamated into aggregated graphs.


The benefits were noticed immediately, and are summarised below:-

1. The farmer

(a) The process of reviewing performance against a set of questions assisted many farmers to stand back and reflect on trends. In times of drought, the stresses on the individual farmer and their family can be such that stepping back for an objective review is difficult to achieve.

(b) The process empowered farmers to collectively review their position and enabled them to engage DPI staff in more focussed technical discussions on options.

(c) Farmers came to the meetings prepared with information that the NRAC team needed.

(d) Enabled three local communities to realise that the data did not support their belief about the impact of drought on farming in the local area. Early realisation of the impact is beneficial in preventing the community wasting time.

2. Commonwealth Department of Agriculture Fisheries and Forests

(a) Staff have a much greater understanding of the farming performance trends emanating from the area prescribed by the collected data.

(b) Staff commented on the consistency of the information gathered.

3. Natural Resources Advisory Committee

(a) NRAC felt that the meetings were streamlined and highly efficient and they could meet more farmers in the time allocated to the visits than in previous times.

(b) Summarised trends contained in different applications have the same basis.

4. State Government Staff

The collated statistical summaries have been sought by DPI staff to provide guidance and or reinforcement to extension programs. The summarised information provides a dimension to the extent of problems and enables staff to consider tailoring programs specifically to target areas and audiences.

5. Rural Financial Counsellors

(a) Counsellors reported that the case study form approach enabled farmers to say how they were performing and that farmers felt that they were being listened to. (McClelland 2005).

(b) Provided the Counsellors with a broader perspective on the average farm performance across the region and assisted their discussions with the farming communities.

6. Local Government.

Their involvement on the local community committee assisted their understanding of where their communities were suffering and the extent of the impact. Local governments also contribute data on social indicators on the farming community, such as local business closures.

7. Interstate

The Queensland Farmers Federation requested a copy of the form to assist their farmers organise information in a standardised way and to present this information to NRAC.

Farmers able to contribute accurate and specific types of information to a meeting with NRAC. (Echuca 2005)

Figure 2. Information collected within the community showing the average equity and debt in the area seeking to establish a case for EC assistance


The approach demonstrated that the farming communities working together can provide detailed and specific information from farms across a large area in a relatively short time frame. This enabled a clearer evaluation of the impact of drought in area by farmers, the local community and governments. This also contributed to more rapid understanding of whether to seek Commonwealth assistance or not. The process of providing a framework for the farmers to organise their information enabled a community driven process that with simple partnership with the State also protected privacy.


DAFF (2001). Information Handbook, Exceptional Circumstances Assistance. Department of Agriculture Fisheries and Forests.

McClelland K (2005). Personal communication. Rural Financial Counsellor, North Central Rural Financial Counselling Service.

Appendix 1 Information for consideration of an area for Exceptional Circumstance

Location Details..

Shire in which farm/s located_______________________________________________

Name of the nearest Town is________________________________________________

Your farm is located (ie north/south etc) from the nearest town__________________

Distance to nearest town ________kms Postcode_______________





Area of land operated at 30th June



Wheat area sown



Wheat yield per hectare sown



Barley area sown



Barley yield per hectare sown



Other crops sown



Yield per hectare sown



Sheep numbers as at 30th June



Sheep & lambs purchased



Sheep and lambs sold



Wool cut per sheep shorn



Beef cattle numbers at 30th June



Beef cattle purchased



Beef cattle sold











Other crops



Sheep and Lamb Sales



Wool Sales



Beef Cattle sales



Other Cash Receipts



Total Cash Receipts





Sheep and Lamb purchases



Beef cattle Purchases



Livestock materials















Costs Continued







Fuel/oil lubricants etc



Repairs and Maintenance



Shearing & Crutching expenses



Administration expenses



Rent and rates



Interest payments



Hired labour



Payments to sharefarmers



Other cash costs



Total Cash costs



Farm Capital and Debt


Total Capital Value



Farm Debt



Equity ratio at 30th June



Financial Performance


Total Cash Receipts



Less Total cash Costs



Farm Cash Income



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