The state government’s farm finance concessional loans scheme has been expanded to allow loans for debt restructuring, and to farmers in areas that are not rainfall deficient.
The state government’s farm finance concessional loans scheme has been expanded to allow loans for debt restructuring, and to farmers in areas that are not rainfall deficient.
A total of $25 million is now available under the scheme, with up to $1 million available to each individual farm.
Between $50,000 and $400,000 of that amount must still be allocated for productivity enhancement.
It comes just days after Agriculture Minister Barnaby Joyce dropped the repayment rate on the loans to reflect a lower government bond rate.
“We listened to farmers across WA about what they need to help them through, and that’s why we worked with the Western Australian government to expand the loan conditions for the $25 million that is available under this second round of Farm Finance loans,” Mr Joyce said today.
“The loans can now also be used for debt restructuring, in addition to productivity enhancement, or a combination of these two purposes - helping farm businesses in the short-term to improve their financial capabilities and profitability into the future.”
Exceptional circumstance interest rate subsidies ceased in WA in June 2012, according to the Productivity Commission, but last year the federal government announced it would provide more than $250 million in concessional loans.
In a 2009 inquiry, the commission assessed that drought-triggered business support for farms would cause a small decrease in overall agricultural production.
Interest rate subsidies were “ineffective, antithetical to the promotion of farm businesses’ self-reliance, and should be terminated,” the commission said.
“A number of participants to the drought inquiry also raised the potentially inequitable nature of such subsidies,” it added.
State Agriculture and Food Minister Ken Baston said some businesses in the eastern Wheatbelt had not been able to apply for the Drought Concessional Loans Scheme as they did not farm within the Bureau of Meteorology (BoM) rainfall deficiency areas.
“The broadening of the FFCLS will enable those not farming in a BoM rainfall deficiency area to apply for a concessional interest rate loan with a debt restructuring component,” Mr Baston said.
Agribusiness lobby group The Pastoralists and Graziers Association of WA said it supported the expansion of the loan program.
PGA president Tony Seabrook said he encouraged eligible farmers to contact the Rural Business Development Corporation.
“Farm Finance concessional loans are a valuable tool in helping viable farming businesses that are experiencing short term difficulties in servicing their debt, and expanding them to include debt restructuring is a tremendous benefit in assisting drought affected West Australian farmers and pastoralists to improve their financial capability into the future,” he said.
