Fed: Drought recovery will be patchy: survey
By Shane Wright
CANBERRA, April 29 AAP - Recovery from the drought will be patchy, with new economicsurveys today showing confidence returning to country Australia.
A Macquarie Research analysis of the drought and its implications found recent rainhad pushed up confidence in the bush, with many areas now preparing for a bumper crop.
It said that while the rain was welcome, farmers would not get a boost to their walletsuntil the end of the year or even 2004.
And this would be patchy, with the Northern Territory and Queensland - both traditionallyreliant on livestock industries - slower to recover from the drought.
"Geographically, we suspect that there will continue to be disparities between theAustralian states and territories, due to the incidence of rainfall and also the compositionof agricultural production," it said.
"The expected rebound in crop production will have the greatest impact on farmers andassociated rural industries in NSW and Western Australia, which are Australia's two biggestcropping states."
Macquarie said although the drought had been one of the worst on record, farmers haddone better at riding it out than in the past.
A record season in 2001 for many farmers, and better financial management, has leftmost producers better placed to survive the big dry.
But Macquarie played down the strength of a post-drought recovery.
"Even though we expect a strong rebound in farm incomes, we are mindful some of thismay be offset by increased costs of production, a weaker outlook for commodity pricesand the ongoing appreciation of the Australian dollar," it said.
A National Australia Bank survey of agribusinesses also found confidence returningto country areas, but from a low base.
Chief economist Alan Oster said the post-farm gate production and processing sectorwas still recording very weak business conditions.
Although short-term confidence levels were up, there was still a lot of weakness acrossthe entire agribusiness sector.
"Despite some improvement in the March quarter, agribusiness export sales remainedweak and well below previous expectations," he said.
"Agribusiness expectations for exports continued to be revised lower, probably reflectingstill subdued global economic conditions as well as drought-affected supplies and a risingAustralian dollar."
Despite the rain, the bank's survey found the confidence for all but sugar and wineproducers lower than at the same time last year - before the drought hit.
Meanwhile, the Bureau of Meteorology said today it appeared the El Nino weather phenomenon- largely responsible for the drought - was over.
AAP sw/sb/tnf/br
KEYWORD: DROUGHT
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