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Australia - Drought drags on as government sets up special fund

Last Friday Prime Minister Scott Morrison announced that Australia is setting up a billion-dollar fund to “future proof” the country against droughts. Eastern Australia has been hit by a crippling drought –in some areas for several years- that has forced graziers to hand-feed, sell or even shoot their stock.

The severe conditions are expected to continue, with more areas further south drying out as the country heads into the southern hemisphere summer season, according to Bureau of Meteorology forecasts.

The unfolding crisis has sparked a raft of support measures from the government, including AUS$1.8 billion (US$1.3 billion) in financial aid for farmers and local communities launched in August. Morrison said a new fund of AUS$3.9 billion would be established to pay for drought resilience and water projects in the coming decade.

The government’s Australian Bureau of Agricultural and Resource Economics (ABARES) said at the summit that the drought, while severe, covered a smaller area compared to a previous extreme dry period of 2002-03. But the bureau added that in the east, home to important areas for livestock and crops, rainfall was 40% lower than the 20-year average.

The drought, coupled with damaging frost in some areas, is set to produce the smallest winter grain crop in 10 years, according to a forecast from Rabobank, a specialist agribusiness bank.

“The 2018/19 winter crop will go down as one of the worst in eastern Australia’s history,” it said in a report this week.

The weather bureau meanwhile forecast that the next three months would be drier and warmer than average, meaning “a low chance of recovery for drought-affected areas of eastern Australia”.

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