Upper North Cropping District EC Application

How was the decision made?

On 13 July 2010, the South Australian Government submitted an exceptional circumstances (EC) application for the Upper North Cropping District. 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 869 800 hectares and the major towns are within it are Orroroo, Peterborough, Quorn and Port Germein. The major regional centres of Port Pirie to the south and Port Augusta to the north are located outside 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 on 9, 10 and 11 August 2010 and held 11 producer meetings.

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 found that for most of the area rainfall over the 39-month event period was average and did not meet the criterion of a ‘rare and a severe, one in 20 to 25 year event’.

NRAC found that the application did not meet the second criterion that the event led to a rare and severe downturn in farm income over a prolonged period. While NRAC acknowledged that crop producers may have had a decline in income in 2009, a significant proportion of the decline could have been attributed to a national fall in grain prices. NRAC found that for livestock producers seasonal conditions had provided opportunities over the 39-month event period.