The Australian government has taken steps to prevent a repeat of financial losses from the droughts that ravaged many areas of the country’s farmland. It has launched the Drought Finance Taskforce in the wake of losing millions of dollars in livestock and crops due to extreme weather earlier this year.

The taskforce will try to create better communication between politicians and banks so that they can more effectively react to help farmers if a severe drought should happen again.

Treasurer Josh Frydenburg and Agriculture and Resources Minister David Littleproud delivered a joint statement to the media, saying that the taskforce’s aim is to help banks provide liquidity faster. It will also have a greater focus on collaboration between itself and big lenders so that they can jointly target those who need assistance, from farmers to local small businesses that rely on that part of the supply chain to keep their businesses afloat.

With Frydenberg as Chair and Littleproud as Deputy Chair, the taskforce will also include members such as Drought Special Envoy Barnaby Joyce, Queensland MP John McVeigh and representatives from the National Farmers’ Federation (NFF), ANZ, National Bank of Australia (NBA), Commonwealth Bank of Australia (CBA), Westpac and Rabobank.

Many local businesses depend on the performance of the agriculture sector, particularly at a smaller level, so it is essential to the Australian economy that politicians and banks prop up farmers during times of drought to prevent the serious downturn seen this year.

As millions of dollars of high-value crops suffered across whole states, the government had to step in and provide float funding. It faced accusations of acting too late and simply arriving to pay enough dues to keep farmers working without being able to offer substantial assistance.

Food prices in many areas are likely to rise, particularly when it comes to grain. When factoring in these added costs to local areas that cannot make a profit on their supply chains, this cycle may become increasingly harder to address each year that extreme weather occurs.

The Drought Finance Taskforce has therefore set out clear aims that it wants to achieve, which include leveraging institutions from parliament to banking to the industry as a whole to offer resources in rural and local communities. The taskforce wants to better understand the impact that the droughts have in these areas.

It also aims to set up insight-sharing mechanisms as soon as possible and advise the government, banks and the NFF on which steps they should take to alleviate drought issues and put measures in place to reduce losses.

In a statement, the government noted that it “continues to prioritize regional and rural communities affected by the drought” and referenced the expansion of its “$1.8bn drought assistance package.”

Calling the taskforce an “additional way for government, business and industry to work together,” it noted that its establishment would be the best way of getting those in charge to “respond quickly so farmers and local businesses receive the additional support they need as soon as possible.”