8 May 2007Gemma Daley
Australia, which relies on agriculture for 20 percent of its exports, will provide grants to farmers stricken by the worst drought in 100 years and will spend A$4.3 billion tackling climate change and water use.
The government will spend A$893 million in drought assistance, including counseling and new training to farmers in the year ending June 30 2008, according to budget papers released in Canberra today.
A drought has cut as much as 1 percentage point from economic growth, Prime Minister John Howard said. Australia's weather forecaster predicts only a 50 percent chance of average rainfall in the next three months.
``Many thousands of Australian farmers are affected by drought, the worst on record,'' Agriculture Minister Peter McGauran said in a statement released with 2007-08 budget papers. ``The funds will be available in the areas with the highest needs.''
The drought cut agricultural output by 22.9 percent in the fourth quarter, curbing earnings at grain traders AWB Ltd. and ABB Grain Ltd. Australia is the world's third-largest wheat and dairy exporter and No. 2 beef shipper.
Howard's government will spend A$4.3 billion in the next five years on tackling climate change, better water usage and environmental protection, including A$29.8 million to guard the Great Barrier Reef, the budget papers said.
The government doubled the subsidy to A$8,000 for homes installing solar panels and will establish a center for climate change. It will also spend A$59.6 million to help develop greenhouse friendly transport fuels.
Emissions of carbon dioxide, the most important greenhouse gas, are projected to rise by as much as 110 percent by 2030 if no action is taken to minimize them, the United Nations Panel on Climate Change has said. Scientists have linked the gas, produced by burning fossil fuels, to climate change. Higher emissions lead to higher temperatures, they say.
To contact the reporter on this story: Gemma Daley in Canberra at [email protected]
http://www.bloomberg.com/apps/news?pid=20601081&sid=ankLLq8YeCBw&refer=australia#
