Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1)

Administered by Department of Agriculture

Legislation au F2005L00774 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Agriculture, Fisheries and Forestry

FARM HELP RE-ESTABLISHMENT GRANT SCHEME AMENDMENT 2005 (No. 1)

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Subsection 52A(1) of the Farm Household Support Act 1992 provides that the Minister may, by written instrument, formulate a Scheme to be called the Farm Help Re-establishment Grant Scheme, to grant financial assistance to eligible farmers on the sale of their farm enterprises, or their rights or interests in farm enterprises. Such a grant is called a Re-establishment Grant.

This Scheme is related to the Scheme formulated under section 52B(1) of the Farm Household Support Act 1992 (the Farm Help Advice and Training Scheme 1997). A person who applies for a benefit under the Farm Help Re-establishment Grant Scheme is required to obtain advice under the Farm Help Advice and Training Scheme and will be granted assistance to obtain that advice. The person is required to undertake a financial assessment and develop an activity (pathways) plan before qualifying and being eligible to claim a Re‑establishment grant.

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Amendments to the Farm Household Support Act 1992, the Farm Help Advice and Training Scheme 1997 and the Farm Help Re-establishment Grant Scheme 1997 will reinforce the structural adjustment focus of the Farm Help – Supporting Families Through Change programme. The amendments will do this by clarifying the qualification provisions for entry into the Farm Help programme and enabling ongoing communication with Re-establishment Grant recipients regarding their undertakings not to re-enter farming and to notify of a change of address.

The amendments have emanated from the on‑going monitoring of the programme’s performance, a mid-term evaluation of Farm Help conducted in 2002 and the Performance Audit of key Agriculture Advancing Australia programmes undertaken by the Australian National Audit Office in 2002 and 2003.

FARM HELP RE-ESTABLISHMENT GRANT SCHEME AMENDMENT 2005 (No. 1)

Section 1 Name of Scheme

This Section states that the instrument is called the Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1).

Section 2 Commencement

This item refers to the Scheme’s commencement date as the day after it is registered.

Section 3 Amendment of Farm Help Re-establishment Grant Scheme 1997

This Section provides that Schedule 1 amends the Farm Help Re-establishment Grant Scheme 1997.

SCHEDULE 1 AMENDMENTS

Item 1 Section 1.3, definition of a farm owner or operator

This item clarifies the previous definition of a farm owner or operator, which previously was a ‘person who had a right or interest in the land used for the purposes of a farm enterprise’. This definition needed to be changed as it would otherwise have been the same as the definition of farmer. It has been amended to ensure that farmers, share farmers and people who operate a farm enterprise are included as farm owners or operators. The definition is consistent with the ongoing policy interpretation of a farm owner or operator. This clause is not intended to enable hobby farmers to enter the programme – they will be deemed ineligible at an earlier point – where they are required to demonstrate that for the two years prior to application they must have been a farmer, and derived more than 50 per cent of his or her gross income from his or her farm enterprise, and contributed more than 50 per cent of his or her capital to the farm enterprise, and spent more than 50 per cent of his or her working hours in work on the farm enterprise.

Item 2 Section 1.3, after definition of SDA scheme

This item inserts a definition of a sharefarmer. This means a person who, under the terms of a contract with a farmer, performs work in relation to the farmer’s farm enterprise and who is paid, wholly or partly, by receiving a share of the income, whether in cash or in kind, derived from the enterprise.

Item 3 Section 1.3, note

This item inserts reference to the farm help Scheme payment commencement day.

Item 4 Section 2.1(3)

This item repeals the previous reference to who may apply for a Re-establishment Grant under 2.1(3). After the day this subsection commences or a subsequent day, for a continuous period of at least 2 years immediately before the person applies for the grant, the person must have been a farmer, and derived more than 50 per cent of his or her gross income from his or her farm

enterprise, and contributed more than 50 per cent of his or her capital to the farm enterprise, and has spent more than 50 per cent of his or her working hours in work on the farm enterprise. The other subclauses under clause 2.1 still apply.

This item also inserts a note referring to subsection 5A, which is the exercise of discretion in cases where a person does not satisfy the 50 per cent income test, where the person’s gross income during the 2-year qualifying period is significantly diminished by certain events due to natural disaster, extreme seasonal conditions, market collapse, or serious illness or disability.

Item 5 After subsection 2.1(5)

This item inserts a clause where a person who does not satisfy subparagraph 3(b) is taken to satisfy the subparagraph if there is a determination in writing by the Secretary that the person’s gross income from the farm enterprise during the 2 year period mentioned in subsection (3) is significantly diminished by:

(a) Drought, flood, bushfire or some other natural disaster.

(b) An ‘unforeseeable extreme variation in seasonal norms’ such as situations where commodity production or prices have been severely damaged due to circumstances for which the farmer could not have prepared. An example of this could include, among others, the 2000 outbreak of orange rust in the sugar industry.

(c) Market collapse, that is, a situation where an unforeseen external factor resulted in the sudden and total collapse of commodity prices or the exclusion of Australia from the global market for a particular commodity.

(d) A serious illness or disability which had prevented the person from earning 50 per cent of their gross income from the farm enterprise.

The Secretary in this case carries the same definition as in the Farm Household Support Act 1997: the Secretary to the Department of Social Security. This determination will be made in close consultation with the Department of Agriculture, Fisheries and Forestry. These provisions will ensure that genuine farmers who have suffered a decline in farm cash flow or financial loss due to such circumstances, but who meet the criteria in 2.1(3)(ab)(i), (iii) and (iv), will not be excluded from assistance under the Farm Help programme.

Item 6 Part 3, Division 4, heading

This item substitutes a new heading, which is Division 4 Provisions relating to grant recipients.

Item 7 After section 3.9

This item inserts reference to the obligations of Re-establishment Grant recipients. A note has been inserted to state that Re-establishment Grant recipients are required to tell the Department about a change of circumstances, including whether her or she has changed address and/or returned to farming, within the first 5 years after receiving a grant. This is consistent with Sections 52AB and 52AC of the Farm Household Support Act 1992.

Item 8 Transitional – person who was eligible between 1 July 2004 and the 2005 commencement day

(1) Inserts a transitional provision, for a person who was eligible for and applied for a grant, between 1 July 2004 and the 2005 commencement day. The 1 July 2004 eligibility and qualification provisions will apply to a person who, under this Scheme, was an eligible person and applied for a grant on or after 1 July 2004 and before the 2005 commencement day.

(2) Inserts reference to the 2005 commencement day for subsection (1), which means the day on which this section commences, which is the day after this Instrument is registered.

Overview

The Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1) was enacted to address the need for reinforcing the structural adjustment focus within the Farm Help – Supporting Families Through Change programme. This legislative amendment was introduced by the Australian Parliament and aims to clarify the qualification provisions for entry into the Farm Help programme while ensuring ongoing communication with Re-establishment Grant recipients regarding their commitments not to re-enter farming and to notify any changes of address. The amendments were formulated based on ongoing monitoring of the programme's performance, a mid-term evaluation conducted in 2002, and a Performance Audit of key Agriculture Advancing Australia programmes undertaken by the Australian National Audit Office in 2002 and 2003. The overall policy objective is to ensure that the Farm Help programme effectively supports farmers through structural adjustments while maintaining integrity and accountability within the scheme.

Scope and Application

The Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1) pertains to the Farm Household Support Act 1992, specifically modifying the Farm Help Re-establishment Grant Scheme 1997 to reinforce the structural adjustment focus of the Farm Help – Supporting Families Through Change programme. This Act applies to eligible farmers who are seeking financial assistance upon the sale of their farm enterprises or their rights or interests in farm enterprises. The legislation specifically targets individuals who are farmers, share farmers, or those who operate a farm enterprise, thereby excluding hobby farmers who do not meet the stringent criteria of deriving more than 50 per cent of their gross income from their farm enterprise, contributing more than 50 per cent of their capital, and spending more than 50 per cent of their working hours on the farm enterprise for at least two years prior to applying. The amendments clarify qualification provisions and enable ongoing communication with Re-establishment Grant recipients regarding their commitments not to re-enter farming and to notify of a change of address. The scheme is not limited to a specific geographic area but operates within the national jurisdiction of Australia, extending its reach to all eligible farmers across the country. Any further specifications or extensions of the scheme’s application are managed through subordinate instruments, ensuring that the provisions remain adaptable to changing circumstances and needs within the farming community.

Key Provisions

The Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1) (Section 3) amends the existing Farm Help Re-establishment Grant Scheme 1997 to reinforce the structural adjustment focus of the Farm Help – Supporting Families Through Change program. This amendment clarifies qualification provisions for entry into the Farm Help program and enables ongoing communication with Re-establishment Grant recipients regarding their commitments not to re-enter farming and to notify of a change of address. Under Section 1.3, the definition of a farm owner or operator has been amended to include farmers, share farmers, and those who operate a farm enterprise, consistent with the policy interpretation of a farm owner or operator. Importantly, this definition excludes hobby farmers, who must demonstrate that for the two years prior to application they were a farmer, deriving more than 50% of their gross income from their farm enterprise, contributing more than 50% of their capital to the farm enterprise, and spending more than 50% of their working hours on the farm enterprise. Section 2.1(3) revises the criteria for applying for a Re-establishment Grant, stipulating that applicants must have been a farmer for at least two years immediately before applying, deriving more than 50% of their gross income from their farm enterprise and contributing more than 50% of their capital to the farm enterprise, and spending more than 50% of their working hours on the farm enterprise. There are also provisions to consider significant income diminution due to natural disaster, extreme seasonal conditions, market collapse, or serious illness or disability, as outlined in the amendment. The Act imposes specific obligations on parties governed by it. According to Section 2.1(3), applicants for a Re-establishment Grant must satisfy the outlined financial and operational criteria for two years prior to applying. They must also obtain advice under the Farm Help Advice and Training Scheme and undertake a financial assessment before being eligible for a grant. Under Section 3.9, Re-establishment Grant recipients are obligated to inform the Department about any changes in circumstances, including changes of address and any return to farming, within the first five years after receiving a grant. This requirement is consistent with Sections 52AB and 52AC of the Farm Household Support Act 1992. Furthermore, Section 2.1(5) stipulates that if a person does not meet the income requirement, they may still be eligible if the Secretary determines that their income was significantly diminished by specified events. Failure to comply with the provisions of the Farm Help Re-establishment Grant Scheme Amendment 2005 (No. 1) can result in various consequences. Firstly, applicants who do not meet the eligibility criteria, such as not having been a farmer for at least two years or not deriving a majority of their income from their farm enterprise, will not be eligible for a Re-establishment Grant. Secondly, grant recipients who fail to inform the Department about changes in circumstances, such as a change of address or returning to farming, within the first five years after receiving a grant, may face civil or administrative penalties. These penalties could include the requirement to repay the grant or disqualification from future Farm Help programs. While the specific penalties are not detailed in the text, they would be consistent with the enforcement mechanisms provided under the Farm Household Support Act 1992.

Area of Law: Environmental Law
Instrument: Act
Concepts: Commencement Provisions; Licensing & Registration; Compliance Obligations

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