Future Drought Fund

A focused Future Drought Fund for a changing climate

The Future Drought Fund can play an important role in assisting the Australian agricultural sector to prepare for the effects of drought and a changing climate.

The Productivity Commission today released an interim report – Review of Part 3 of the Future Drought Fund Act. The report invites further views on the Commission’s initial findings and recommendations on ways to improve the operation and design of the Future Drought Fund (FDF).

“We think the FDF can build on its first four years to deliver on its ambition, with some changes to design and strategy,” said Commissioner Joanne Chong.

While it is too early to fully assess the impact of the first round of fund programs, the report notes long-term improvements are unlikely because the initial suite of FDF programs were stood up quickly, supported short-term initiatives and could have been better integrated with each other.

“The Future Drought Fund aims to build resilience to drought but short-term programs operating in isolation will struggle to deliver this,” said Commissioner Chong.

The Fund is more likely to generate lasting, impactful change through programs that are better integrated and targeted at addressing longer-term challenges.

Re-focusing the fund on long-term resilience also means acknowledging that climate change is worsening adverse weather events.

“The fund should explicitly recognise that drought is one part of the broader challenge to communities and agriculture that climate change represents. We cannot effectively build drought resilience in isolation from the other consequences of a changing climate,” said Commissioner Malcolm Roberts.

The Commission is now seeking further feedback and submissions to inform its final report.

A full copy of Review of Part 3 of the Future Drought Fund Act – Interim Report is available from the Commission’s website: www.pc.gov.au.

Media requests

Media team – 02 6240 3330 / media@pc.gov.au

• The Future Drought Fund (FDF) continues the policy shift, from in-drought assistance to building resilience to drought before drought occurs. The FDF can play an important role in protecting Australian agriculture and regional communities from the effects of a changing climate.
• While it is too early to assess the FDF’s impact on drought resilience, significant change is unlikely given the Fund’s initial focus on short-term programs. However, early lessons are being learnt.
• The FDF would be improved by:
  • better articulating what the Fund is intended to achieve, how and when it will be achieved, and the roles of key participants
  • prioritising the FDF’s objectives
  • having a greater focus on supporting natural resource management through investments that achieve environmental and economic objectives
  • providing a detailed investment plan that sets investment priorities for the Fund, to facilitate better planning, sequencing and coordination of FDF programs
  • investing more in longer-term programs that support transformational change
  • establishing systems for sharing information about Fund programs and their outcomes.
• Drought is just one of the risks from climate change that farmers and agricultural communities face. The FDF should more explicitly recognise the need for resilience to climate change, not just resilience to drought.
• The FDF should have fewer, better integrated programs. Key program considerations include:
  • the Drought Resilience Adoption and Innovation Hubs need defined goals and time to demonstrate their value. There should be a review during the next Drought Resilience Funding Plan to decide whether funding should continue
  • improvements are needed to boost uptake of the climate information tools. The Commission is considering whether funding should continue for both climate tools, or if they should be integrated
  • there may be scope for the Farm Business Resilience program to deliver more public benefits, particularly by promoting measurable improvements in natural resource management
  • many institutions undertake agricultural innovation. It is unclear how the FDF should complement this. If there is a role for the FDF, Drought Resilience Innovation Grants could be targeted to identified challenges.
  • the value of some Regional Drought Resilience Plans is doubtful. Changes are needed to ensure that plans are effective and implemented
  • more work is required to identify if and how the FDF should best contribute to building social resilience through its community grant programs.
• The governance arrangements for the FDF are appropriate. However, processes can be simplified, while strengthening oversight of delivery outcomes.
• There has been little engagement with Aboriginal and Torres Strait Islander people to date. Changes across Fund objectives, design, development, delivery, partnerships and decision making would be required to improve outcomes for Aboriginal and Torres Strait Islander people, and the wider agricultural sector.

Media requests

Media team – 02 6240 3330 / media@pc.gov.au

• Preliminaries: Cover, Copyright and publication detail, Opportunity for comment, Terms of reference and Contents
• Executive summary
• Interim findings, recommendations and information requests
• Interim report
  • 1 What is this inquiry about?
  • 2 How has the Future Drought Fund performed?
  • 3 The next steps for the Future Drought Fund
  • 4 Are the governance arrangements fit for purpose?
  • 5 Is the monitoring, evaluation and learning approach fit for purpose?
  • 6 Improving outcomes for Aboriginal and Torres Strait Islander people
  • 7 Evaluation of individual FDF programs
  • A Public engagement
• Abbreviations
• References

Printed copies of this report can be purchased from Canprint Communications.