WA farm loan deal due next month
The State Government is on the cusp of signing up to the Federal Government's Farm Finance Package after a compromise to split the $5 million administration cost.
Up to 300 WA farmers will be able to access concessional loans of $200,000 under the deal, first mooted in April.
WA is negotiating a loan term of five years, interest-only at the 4.5 per cent concessional rate with principal repayment at the end of five years. It will be allocated on a first-in, first-served basis to those who meet the eligibility criteria.
The Queensland and Victorian State Governments signed up last week, giving their farmers loans of up to $650,000 to restructure debt.
WA's loan agreement, due to be signed once eligibility criteria is finalised next month, will target productivity improvements such as top dressing lime, additional fertiliser, upgrading water catchments and changing seed varieties.
They will be available to 150 viable farm businesses this year and 150 next year.
Application forms are expected to be available by September with the first funds administered in October.
WA Agriculture Minister Ken Baston said the situation had been sped up by new Federal Agriculture Minister Joel Fitzgibbon and a compromise to split administration costs to avoid further delays.
"If the Federal Government had come to the States with some clear guidelines around administration, bad debts and eligibility from day one then we would have been rolling out funding by now," Mr Baston said.
With drought looming in parts of the eastern Wheatbelt and with problems in dairy and northern cattle sectors, Mr Baston said it was important the $60 million capital injection be directed to farmers who would benefit the most.
"These loans won't save some farm businesses but they will help 300 get past what have been an unprecedented series of hard years for WA agriculture," he said.
The news has been welcomed by industry including WAFarmers president Dale Park despite the original call for help focused around carry-on finance for this season. He is keen to see details of who will be eligible and more information on productivity improvements.
"We are probably at least $2 billion too much in debt as an industry. What we need is more profitability and rain," he said.
Muntadgin Farm Alliance spokesman Scott Stirrat said a lot of farmers could pay off debt when under 55 per cent equity, including those who leased land.
He believes the package would be more useful for debt reconstruction and hopes it's a stepping stone to Bob Katter's Australian Reconstruction and Development Board Bill introduced in Parliament in June.
With limited Federal funds available, not every farmer will be able to participate in the scheme.
Kukerin farmer and Alarming Farming champion Mary Nenke, who regularly receives phone calls from farmers in financial difficulty, is concerned over the time taken for the package to be signed off.
"My concern is that like the State package, it's first in best dressed and doesn't put everyone on equal footing. I believe what we need is interest rates similar to housing loans for farming and everyone needs to be able to qualify, just as if it was a home loan," she said.
But Mrs Nenke praised the Federal Government support and said all political parties needed to work together to ensure a positive future in agriculture.
Australian farmers are $65 billion in debt.
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