Australia pledges A$1.8 billion to help drought-stricken farmers

Some of the more than 45,000 sheep being sold at the Central West Livestock Exchange sale yards in Forbes, New South Wales, Australia, on Aug 14 2018. Amid low water supply, worsening crops and fading livestock feed, farmers are offloading their stock in record numbers. PHOTO: EPA-EFE

SYDNEY (BLOOMBERG) - Prime Minister Malcolm Turnbull has pledged extra funding for Australia's rural communities ravaged by the worst drought in 50 years, boosting the government's support package to A$1.8 billion (S$1.81 billion).

"We're determined to ensure that we get behind our farmers and help them," Turnbull said in a Facebook post. "This is the worst drought in this part of the country, in New South Wales (NSW) in particular, since the 1960s."

The dry spell has already taken a toll on the country's grain producers, with a report by INTL FCStone Inc showing wheat exports in 2018/19 are likely to be the lowest in 11 years.

Dry conditions are set to continue well into the southern hemisphere spring, Australia's Bureau of Meteorology said in its latest climate outlook published last week.

Among the measures included in the new package are as much as A$75 million in handouts distributed across 60 drought-affected councils in the east coast states of NSW and Queensland for spending on local infrastructure, and a doubling in the amount of low-interest loans available to farmers.

Turnbull also announced the appointment of a national drought coordinator to work with farmers and local organisations.

Reserve Bank of Australia governor Philip Lowe says the drought is having a negative impact on the economy, telling a parliamentary committee on Friday that the dry conditions will limit farm production.

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