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Australian primary industries ministers have agreed that current approaches to drought and EC are no longer the most appropriate in the context of a changing climate. They agreed
that drought policy must be improved to create an environment of self-reliance and preparedness, and encourage the adoption of appropriate climate change management practices.

To improve drought policy, ministers agreed to consider:
• relevant social dimensions and policy responses to drought and Exceptional Circumstances;
• the provision of accessible social welfare support, including eligibility criteria;
• the effectiveness of business support payments;
• the effectiveness of financial risk management strategies, including Farm Management Deposits;
• the effectiveness of preparedness policies; and
• cost-benefit analysis of state and federal drought assistance.

The Commission is requested to:

1. Report on the appropriateness, effectiveness and efficiency of the Commonwealth, state and territory governments’ business support and income support measures provided to
help farmers, farm businesses and farm dependent rural small businesses manage drought. Support measures assessed will include, but not be limited to, EC Relief Payments, EC Interest Rate Subsidies, Exit Assistance, Farm Management Deposits,  Professional Advice and Planning Grants, Irrigation Management Grants and rate rebate schemes.

2. Identify impediments to farmers, farm businesses and farm dependent rural small businesses improving self-reliance and preparedness for periods of financial difficulty.

3. Identify the most appropriate, effective and efficient Commonwealth, state and territory government response to build farmers’, farm businesses’ and farm dependent
rural small businesses’ self-reliance and preparedness to manage drought. The Commission may draw lessons from the broad range of support measures that are or have been available to farmers, farm businesses and farm dependent rural small businesses, or which are more broadly available to the Australian community.

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