Barnaby’s baby bank born to help struggling farmers
The Regional Investment Corporation is now open for business, with $2 billion available to farmers for drought or investment loans.
The corporation was dubbed “Barnaby’s Bank” after former deputy prime minister Barnaby Joyce promised to set it up during the 2016 election campaign.
“No longer will the Commonwealth have to barter with State governments to process drought and dairy concessional loans to help farmers,” he said.
The RIC will offer drought or farm investment loans valued up to $1 million with a 3.58 per cent variable interest rate from its new base in Orange, NSW.
Get in front of tomorrow's news for FREE
Journalism for the curious Australian across politics, business, culture and opinion.READ NOW
The new arrangements will also replace the dairy recovery loans.
Federal Agriculture Minister David Littelproud said government loans to farmers would now be consistent across the country.
WAFarmers policy officer Grady Powell said the loan application process for farmers would be more straightforward.
There would no longer be one set of criteria between the Federal and State governments and another between the grower and the State.
Mr Powell said the full details of the loan products were not yet known, but previous criteria for loans had been very east coast centric.
He said the modelling used in the past considered total rainfall, so heavy summer rain of little use to WA farmers had made them ineligible for drought assistance.
Mr Powell said he hoped former Liberal State agriculture minister Mark Lewis, who sits on the RIC board, would ensure that WA’s needs were understood.
He said the investment loans would be particularly useful because second-tier lender such as Elders and Landmark had not operated in WA for some time.
“If you couldn’t access anything through one of the big institutions, you were high and dry,” he said.
Both the drought and investment loans are fee free and have a term of 10 years.
For the first five years, only interest repayments are required.
Half of the farm’s total debt must remain with a commercial lender.
The investment loans are restricted to farms that mainly sell into interstate or overseas markets. The new organisation will not manage loans made under the previous schemes.
A spokesperson for the State Minister for Agriculture and Food, Alannah MacTiernan, said the Rural Business Development Corporation would to continue to administer 46 concessional loans to WA farms under existing arrangements for the terms of the loans.
The Regional Investment Corporation will also administer a $2 billion loan facility for investments in regional water infrastructure by State and territory governments.
Get the latest news from thewest.com.au in your inbox.
Sign up for our emails