Eastern Eyre Peninsula EC Application

How was the decision made?

On 13 July 2010, the South Australian Government submitted an exceptional circumstances (EC) application for the Eastern Eyre Peninsula. The application replaced an earlier application for the same area submitted in May 2010. The application was referred to the National Rural Advisory Council (NRAC) for independent advice.

The area covers around 516 400 hectares. The main towns are Cleve, Cowell, Arno Bay and Port Neil. Port Lincoln to the south and Whyalla to the north are outside of the area.

The application sought assistance for an EC event that occurred over a 39-month period from April 2007 to June 2010.

NRAC assessed the application against the EC criteria using advice from the Australian Bureau of Agricultural and Resource Economics – Bureau of Rural Sciences (ABARE–BRS), data from the Bureau of Meteorology (BoM), feedback from producers and information from the Department of Primary Industries and Resources South Australia.

NRAC inspected the area and met with producers on 12 August 2010.

What are the EC criteria?

All EC applications are assessed against three criteria:

1. The event must be rare and severe. A rare event is one that occurs on average once in every 20 to 25 years. It must also affect a significant proportion of farm businesses in the application area.
2. The effects of the event must result in a rare and severe downturn in farm income over a prolonged period. The impact should typically extend beyond 12 months, as it is reasonable to expect the majority of farmers to manage one year of difficult seasonal conditions.
3. The event must not be predictable or part of a process of structural adjustment.

How has NRAC concluded that the EC criteria have not been met?

The first part of the EC criteria is about rainfall. NRAC relies on BoM data to assess rainfall, because BoM maintains quality controlled official climate records dating back to the 1900s.

NRAC considered that although there was a small part of the area bordered by Cleve, Arno Bay and north of Cowell that met the ‘rare and a severe, one in 20 to 25 year event’, the majority of the Eastern Eyre Peninsula did not meet the first EC criterion.

NRAC found that the application did not meet the second criterion that the EC event led to a rare and severe downturn in farm income over a prolonged period. While NRAC noted that crop production opportunities were limited in 2007 and 2008, conditions in 2009 and the 2010 autumn sowing season were generally favourable for crop production. NRAC considered that despite variable crop production, low grain prices, which occurred nationally, had a greater impact on farm incomes.