An inquiry into Australia’s lucrative Aboriginal art industry has exposed a network of art factories at which painters are forced to churn out pictures in return for drugs, alcohol and scant financial reward.

Most of the artists, whose work is snapped up by tourists and auction houses, are impoverished, surviving on about A$2,000 (£806) a year. Many are susceptible to offers of used cars, alcohol and drugs for providing a constant flow of work to backyard art dealers.

Aboriginal artists are lured from remote communities and herded into painting houses in the central Australian city of Alice Springs, the inquiry, which is being conducted by a committee of senators from Australia’s national Parliament, was told.

The investigation has exposed a network of questionable art dealers and galleries that are exploiting Aboriginal artists, many of whom have little understanding of the true value of their art.

Michael Reid, a reputable dealer and author of a best-selling guide to Australia’s art galleries, told the inquiry that former police officers were responsible for some of the exploitation.

“The carpetbaggers use stand-over tactics — it is not unsurprising that many carpetbaggers are former Northern Territory police officers — to physically intimidate Aboriginal artists to paint exclusively for the backyard art dealers,” he said.

“In such an environment artists are coerced into painting in a factory-like manner — having to ask permission to go to the bathroom — an assembly line of art works is churned out, of obviously poor quality.”

Aboriginal art curators from Australia’s two most highly respected, publicly owned galleries — the Art Gallery of New South Wales and the National Gallery of Australia — have also given evidence.

Hetti Perkins, the senior curator of Aboriginal art at the Art Gallery of New South Wales, gave warning that the network of dishonest operators in the industry was expanding. She said that some artists were accepting drugs in return for their work. Others were accepting worn-out 4x4 vehicles or cash payments far below the price that a gallery would eventually put on their work.

“I think that sometimes they are vulnerable just because they are hungry and poor . . . it’s a hand-to-mouth existence. There are very few artists who are making any kind of money at all. It is pretty much poverty line,” she said.

Brenda Croft, the senior Aboriginal art curator at the National Gallery of Australia, told the inquiry: “People [Aboriginal artists] are isolated. They do not have access to things. And then somebody comes out to them and says, ‘Here is $200’ or ‘Here is a crappy car’ which they bought for $1,000 and they can go and sell the artist’s work for $36,000 through an auction house. The artists don’t see any of that.”

Both curators supported the introduction of a system whereby Aboriginal artists received resale royalties for their work. Under such a system the artists would receive a proportion of the price their work fetched each time it changed hands.

The inquiry is due to report its findings and recommendations for change next month.

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