Phillip O'Neill writes: Not surprisingly, drought eats at more than a farmer's bank balance.

Waiting for rain and the drought's legacy

Drought is the most mysterious of natural hazards. Farmers are never quite sure drought has arrived, then they look to the skies and wonder when it will end; and when the rains come, farmers can never be sure whether a return to normal seasons is actually underway.

Not surprisingly, drought eats at more than a farmer's bank balance. After the millennium drought - the decade-long dry stretch in eastern Australia from the late 1990s - rural health researchers from the University of Newcastle found that drought generated disturbing levels of emotional distress among NSW farmers. Significantly, the researchers found a raised incidence of anxiety persisted in the post-drought years with many farmers unconvinced the drought was over.

The acceleration during the millennium drought of the decline of local rural communities and their social support networks didn't help farmers' mental health. Drought stripped work opportunities from farm labourers, transport workers, machinery maintenance crews and so on. According to US environmental scientist Matthew Heberger, by 2002-3 around 70,000 agricultural jobs disappeared due to drought. By 2007, the nation's sheep numbers were halved, dairy cow numbers fell by a quarter, and crop production virtually ceased in the worst affected regions such as the south western slopes of NSW.

Heberger notes over 10,000 family farmers walked off the land during the millennium drought. Yet the big corporate farms survived, buffered by financial backers playing the long game by backing the competiveness of Australian agriculture in world markets hungry for quality food. Paradoxically, small farms also survived the drought, with the off-farm incomes common in this segment of the farming community important to their endurance. The big losers in the millennium drought were the mid-sized mum-and-dad farms, those large enough to demand the full-time presence of the owners but not large enough to grab the advantages of capital intensiveness.

Drought eats at more than a farmer's bank balance.

So the millennium drought left behind a different Australian rural landscape. Profitable farming came from devotion to overseas markets, with corporate backing secured as insurance to seasonal downturns with the lure of bumper earnings when good seasons returned. Throw in the commercialisation of irrigation rights across NSW, the emergence of large scale machinery contractors and the need for specialist professional advisors and the chance of success for the family farm was diminished substantially.

The Hunter's agricultural landscape mirrored the erosion of the NSW countryside in the post-millennium drought period. Small rural towns are failing. Even the larger regional centres, Singleton and Muswellbrook, struggle to hold their population base, despite the presence of big coal. The ageing of rural communities in the upper Hunter is the result of farmers being trapped on unprofitable holdings. And a replacement younger generation hasn't arrived.

BURNING QUESTION: Will another layer of full-time farmers disappear from the land, their farms gobbled up by giant corporations?

BURNING QUESTION: Will another layer of full-time farmers disappear from the land, their farms gobbled up by giant corporations?

Yet a counter to agricultural decline in the Hunter has been the interest of cashed-up Sydneysiders in buying rural holdings in areas not too far from their harbourside homes. Farms in the Southern Tablelands and the Hunter are popular among wannabe Pitt Street farmers and hobby farmers. Indeed, the break-up of family farms into small holdings offers an exit strategy for many lifelong farmers saying they've had enough.

So the rains that ended the millennium drought didn't restore our rural landscapes to their previous condition. The countryside landed in different hands and money flowed in new directions. Sure the corporatisation of Australian farming had been around for decades, and the slow decline of non-metropolitan communities was nothing new. But the millennium drought accelerated the decline in dramatic fashion.

Now we wait not only for regular rain, but to see the legacy of this drought. Will another layer of full-time farmers disappear from the land, their farms gobbled up by giant corporations and overseas investors? Will we see the departure of the tree changers, their idea of rural idyll shattered not just by drought, but the experience, the fear, of fire? Will Australia's rising generation of city-lovers and coast-huggers see little merit in a non-metropolitan lifestyle as climate change shows its tough hand to the Australian continent?

Drought assistance to the farming community is vital. So too is properly funded regional programs to ensure the longer term viability of Australia's very threatened non-metropolitan communities.

Phillip O'Neill is a professor of economic geography at Western Sydney University.