Briefing: drought and structural adjustment in Australia

Abstract

This briefing paper reviews Australian policy experience in managing drought and structural adjustment policies. It finds that government assistance can often do more harm than good at the individual, regional and national level. Challenging conventional wisdom, the paper concludes that the emphasis should be on mechanisms that encourage autonomous adjustment and avoid masking information that signals the extent of the need to change and the need to plan for droughts. Business assistance should be avoided. When assistance is offered, it should be delivered as welfare assistance and encourage those willing to exit the agricultural sector to do so.