Anger over loan inaccessibility

Jo FulwoodThe West Australian
Wilgoyne farmer Steve Palm can't access the loan because of summer rainfall he received.
Camera IconWilgoyne farmer Steve Palm can't access the loan because of summer rainfall he received. Credit: The West Australian

Struggling north-eastern Wheatbelt farmers could miss out on a Federal Government Drought Concessional Loan because the area is not considered dry enough.

But in an absurd twist farmers in areas such as Moora and Wongan Hills can apply for the loan, which uses rainfall deficiency mapping data supplied by the Bureau of Meteorology.

Wilgoyne farmer Steve Palm has received just 124mm for the growing season this year, but because of the 53mm of rainfall received over summer he is not eligible to apply for the drought loans.

This year's drought is the third consecutive dry period he has experienced, and he predicts more than 400ha on his property won't even be harvested.

"I am hoping to average about 0.6 t/ha and we are crossing our fingers that I am being pessimistic and the crops will yield a bit more," he said.

"Rainfall data I have collected over the past 10 years clearly shows that a good percentage of our annual rainfall occurs over the summer period, which is often useless moisture in terms of our annual cropping program."

Planfarm consultant Graeme McConnell believes while the criteria for loans assessment might work well for the Eastern States, it missed the mark for parts of WA.

He said the drought criteria should make some reference to minimum amounts of growing season rainfall. "The Mukinbudin area has experienced less than 130mm throughout the growing season eight times in the last 15 years, based on the CliMate model May to September data," he said.

"In this north-eastern part of the Wheatbelt, in areas such as Mukinbudin and Bencubbin, a lot of businesses are under pressure after experiencing extended poor seasons that, ironically, seem to be driving them out of the selection criteria."

In contrast, Mr McConnell said many businesses in the eligible western and northern Wheatbelt had seen good returns on capital over the past three to five years.

Mr McConnell, who has raised the issue with the office of the Federal Agriculture Minister Barnaby Joyce, said, according to the rainfall deficiency map, the Mukinbudin town site was experiencing a one-in-10-year rainfall deficiency, but the deficiency did not apply to the surrounding farmland.

"This highlights the limitation of the current approach," Mr McConnell said.

"We also recognise that while the map will change each month, with potentially as few as 20 businesses in WA to receive the support, we think it is important that the loans are well targeted."

WAFarmers president Dale Park, who has also lobbied the Federal Government on this issue, agreed the criteria needed to consider only growing-season rainfall.

"The credibility of the whole thing is called into question when you see places like Moora shaded red and Bencubbin in the ineligible white area; it doesn't make sense," he said.

But Mr Joyce responded to the criticism, saying the scheme required a consistent delivery approach so that all farm businesses were treated the same, during both the application and loan management process.

"For a national program, assessing seasonality for an individual farm business's circumstances would be a subjective and complex measurement, leading to inconsistent treatment of farm businesses in different jurisdictions and increased administration costs," he said.

Senator Joyce said he had reached an agreement with the WA Government to amend the guidelines for Farm Finance Concessional Loans to offer loans for the purpose of debt restructuring.

"This new criteria will enable farm businesses experiencing drought-like conditions that are otherwise ineligible for a Drought Concessional Loan to access finance at concessional rates," Mr Joyce said.

"This would accommodate those farm businesses in financial difficulty in the Eastern Wheatbelt of WA to access a commensurate level of assistance."

Durack MHR Melissa Price said she had also raised the issue personally with Mr Joyce.

A spokesman for Ms Price said there appeared to be a misunderstanding about which areas were rain-deficient and her intent was to ensure (the minister) looked at the issue.

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