Queensland farm businesses will be the first to benefit from concessional loans of up to $650,000 to help manage debt under the Australian Government’s Farm Finance scheme.

The Queensland State Government has agreed-in-principle to terms with the Australian Government, allowing the scheme to provide $60 million over two years to support farmers struggling with debt.

Australian Minister for Agriculture, Fisheries and Forestry, Joel Fitzgibbon, said the initiative will provide assistance to eligible farm businesses in the form of low interest loans to assist with debt restructuring.

“Farm Finance is a boost for viable Queensland farmers who are doing it tough for one reason or another,” Mr Fitzgibbon said.

“Under the program, farmers could save up to $81,000 in interest repayments over the five year concessional period.*

“Reducing debt repayments in the short-term will help alleviate the pressure on farmers and provide them with breathing room to continue to run their businesses and support their families.”

Queensland Minister for Agriculture, Fisheries and Forestry, John McVeigh said after negotiations with the Federal Government, the Farm Finance Package Concessional Loans Scheme could now be finalised to roll out to producers. 

“The package will support producers with debt-servicing difficulties who have suffered due to drought, floods and market issues,” Mr McVeigh said

“Eligible producers will be able to apply for loans up to $650,000 with a variable interest rate starting at 4.5 per cent.

“While the Federal scheme loans were announced for productivity and debt reconstruction, in Queensland it will be entirely for debt restructuring.*

“We negotiated for this package to be available entirely for debt restructuring, and the Federal Government has agreed.”

Mr McVeigh said the package would be sufficient to assist around 100 – 150 viable producers with temporary debt financing difficulties. 

“The assistance package is now more critical than ever, with many producers still suffering the effects of Tropical Cyclone Oswald and more than 44 per cent of the western and northern parts of the state now in drought,” he said.

“QRAA is now in the process of finalising the application guidelines with the Federal Government so it can roll out the concessional loan scheme as quickly as possible.”

AgForce General President, Ian Burnett, welcomed agreement on the scheme and said it would be of significant assistance to those farmers managing challenging circumstances.

“Added to the other concessional loans currently available, these debt reconstruction loans will help those producers who are viable in the long term to transition through some serious short term debt servicing difficulties,” Mr Burnett said.

Minister Fitzgibbon said Queensland was the first state to sign on and take advantage of the scheme.

“Reaching agreements with all states and the Northern Territory is a high priority for the Australian Government,” Mr Fitzgibbon said.

The loans package in Queensland will be managed and administered through the rural adjustment authority QRAA. Loans will be made available once administrative arrangements have been finalised by both governments.

The starting concessional interest rate for the loans will be 4.5 per cent which will be reviewed on a six-monthly basis and may be varied to accord with prevailing economic conditions.

The Rudd Government is making available up to $30 million a year over the next two years to the relevant delivery agency in each state and the Northern Territory to provide concessional loans to eligible farm businesses.

*The $81,000 saving is based on the maximum loan amount of $650,000 over the full five years using a realistic commercial finance rate of 7 percent

*While the Federal scheme loans were announced for productivity and debt reconstruction, in Queensland it will be entirely for debt restructuring.  The Queensland Government already provides almost $300 million in productivity loans under QRAA’s sustainability program.

NFF welcomes announcement

The National Farmers Federation welcomed today’s announcement, but urged the Federal and Queensland Governments to quickly finalise the administrative arrangements needed to allow farmers to access the payments.

“It is a step forward in getting the Government’s Farm Finance payments to where they are needed: to farmers who are struggling with drought and debt, and we thank Minister Fitzgibbon and his Queensland counterpart, Minister McVeigh, for pushing forward this outcome,” NFF vice president Brent Finlay said.

“The situation in some parts of Queensland is grim, with some 40pc of the state now in drought, a relatively high Australian dollar and the ongoing impacts of the livestock export suspension making it extremely difficult for some farmers, particularly northern beef producers.

“Today’s announcement means these farmers will have access to concessional loans of up to $650,000 to help manage their debt," Mr Finlay said.

“But there is still much work to be done. While we welcome the detail today that the loans will be managed and administered through the Queensland Rural Assistance Authority, the structure is not yet in place to allow the funds to get to farmers.

“We urge the respective governments to finalise the structures and programs they need to administer these funds. It has now been 11 weeks since the Federal Government announced the Farm Finance package, but not a single cent has yet been passed on to farmers in need. It is critical that these funds get to where they are needed most.

“And it is critical that these funds are also now made available to farmers in all other States and Territories. It is positive to see that the Rudd Government has agreed to contribute to the cost of administering the loans in Queensland – which has been one of the stumbling blocks for getting all the States and Territories signed up to the program," Mr Finlay said.

“We hope that this offer will now be extended to all other jurisdictions, and that the various State and Territory Governments will also sign on to the package. Farmers are facing difficult conditions in areas right across Australia, and it is essential that all farmers have access to this assistance,” he said.

Mr Finlay is in Emerald today with Minister Fitzgibbon, Minister McVeigh and NFF members AgForce Queensland and the Cattle Council of Australia.