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Analysing Drought Strategies to Enhance Farm Financial Viability

Powell, R. Mr; Ph. (02) 6771 3833; Fax (02) 6771 3528;

Research Organisation: Centre for Agricultural & Regional Economics P/L, 215 Mann Street, Armidale, NSW 2350.

Collaborators: NSW Agriculture, WA Agriculture

Sponsors: LWRRDC, Land and Water Resources Research and Development Corporation; RIRDC, Rural Industries Research and Development Corporation


1. To adapt existing whole-farm models to analyse the financial outcomes and risks associated with common drought preparedness strategies.

2. To apply these models to case study farms to generate guiding examples of the financial outcomes of drought strategies

3. To develop training and extension materials encapsulating the results for farmers and their advisers


Whole-farm models (RISKFARM, MUDAS) were modified to include a climate index and common drought preparedness responses (including the use of taxation instruments) across a range of NSW and WA farming systems. These models were prepared using information from farmer focus groups in each of the farming systems.

Model simulations were run to compare the financial effects of common strategies across a range of season types and to assess the impact on the farm financial risk profile.

Project results were extended via review sessions with farmer focus groups, publications and seminars/workshops held in regional areas.

Progress: Project complete, project monograph and individual regional reports published.

Period: starting date 1993-06; completion date 1995-06

Status: Complete

Keywords: Drought, risk, drought preparedness, taxation


Thompson, D., Jackson, D., Powell, R., et al. (1996). Analysing Drought Strategies to Enhance Farm Financial Viability: Final Report, prepared for the Land and Water Resources Research and Development Corporation and the Rural Industries Research and Development Corporation, by NSW and WA Departments of Agriculture and the Centre for Agricultural and Resource Economics, University of New England, Armidale.

Powell, R and Thompson, D (1993). What is Risk and an Introduction to Production Risk, paper presented to A Workshop in Risk Management for Farm Management Economists, Victorian Department of Agriculture, May 18.

Thompson, D (1994). RISKFARM: a Software Tool for Farm Financial Management in a Risky World, Risk Management in Australian Agriculture Conference, University of New England, Armidale, June 15-16.

Thompson, D. (1994). RISKFARM: a Software Tool for Farm Financial Management in a Risky World. Agricultural Systems and Information Technology 6(2) 64-66.

Thompson, D. and Powell, R. (1996) "Exceptional Circumstances: Exploring Some New Definitions and Approaches", invited paper presented to the Annual Conference of the Australian Agricultural Economics Society Conference, Melbourne, 12-15 February, 1996.

Thompson, D (1996) "An Approach for Analysing Financial Viability and Risk on Farms" in A Users Guide to Drought Feeding Alternatives, Department of Animal Science, University of New England.

Thompson, David (1996). Evaluating management strategies with Riskfarm. In the proceedings of the Managing with Climate Variability Conference 'Of droughts and flooding rains', Land and Water Resources Research and Development Corporation, Canberra, pp 74-78.

Thompson, D. and Powell, R. (1996). Risk management in livestock systems - financial and taxation issues. In Proceedings of the Australian Society of Animal Production 21, pp. 44-47.

Thompson, D. (1996). Exceptional circumstances - issues and alternative approaches, in Indicators of drought exceptional circumstances - Proceedings of a workshop held in Canberra on 1 October 1996, Eds D.H White and V.M. Bordas, Bureau of Resource Sciences, AGPS.

Thompson, D. (1997). Risk management - less myopia, more vision, in Wool and Sheepmeat Services Annual Conference Proceedings 1997, October 21-23, Orange, NSW Agriculture.

Thompson, D. and Powell, R.(1998). Exceptional circumstances provisions in Australia - is there too much emphasis on drought? Agricultural Systems 57, 469-488.

Various regional drought reports (available through NSW Agriculture, Locked Bag 21, Orange, NSW 2800).


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