Bickering delays farm loans

Farmers have lashed out at politicians as a row between the States and the Commonwealth threatens to derail a $420 million concessional loan package.

WAFarmers president Dale Park said yesterday that it was a disgrace that the loans had become a political football at a time when they were desperately needed to keep people in the industry.

His attack came after the WA, NSW, Victorian, Queensland and Northern Territory governments united to demand the Federal Government pay to administer the loan scheme announced by Treasurer Wayne Swan more than five weeks ago.

The State and Territory ministers for agriculture, including WA's Ken Baston, accused the Gillard Government of putting itself in a position to profit from the loans.

In a co-signed letter, the five ministers - all from conservative governments - said it would be unfair for the Commonwealth "to make financial gain from these loan arrangements, while at the same time asking the States and Northern Territory to cover administration expenses and incur real costs".

Their argument is based on the Commonwealth offering the loans at a concessional rate of 4.5 per cent even though the cash rate was 3 per cent when the scheme was announced on April 27.

The Labor governments in Tasmania and South Australian did not sign the letter but have not yet agreed to roll out the loans.

The Commonwealth has agreed to finance the loans and cover any bad debts but wants the States and NT to administer the loans as they have in the past with emergency drought relief packages.

Federal Agriculture Minister Joe Ludwig said he would consider all options to ensure the loans were delivered.

The options include bypassing the State and NT governments or agreeing to the demands of the five ministers.

Mr Baston said Senator Ludwig had agreed in principle that in WA loans of up to $200,000 would be available over a maximum of five years across all major farming and pastoral sectors. The WA Government estimates it will cost $5 million to administer the scheme and says it is ready to roll out the loans as soon as the Commonwealth agrees to foot the bill.

Mr Park said it appeared "politicians were playing politics while farmers suffered".

"Whenever you talk to one side or the other about the problem one of them gets upset. They are like spoilt brats," he said.

"I'm sure if there was some goodwill on both sides this could have been sorted out quickly but it is getting too late for some people."