The Federal Government has announced avenues of support for Drought-affected farmers and businesses.
There is now an enticing opportunity for all businesses to review and access attractive financing packages for the coming 2-5 years depending, facilitated by the Federal Government’s Regional Investment Corporation (RIC).
The Federal Government have outlined a financing offering now available for agribusiness to:
- Restructure existing debt held within commercial banks,
- Fund preparedness for future droughts, or
- Losses from drought impacts, and
- Access new money for capital programs in similar lines to the previously mentioned criteria
The loan proposal terms include:
- Amount of up to $2 million
- Interest-free for the first two years, reverting to interest-only for years 3-5, and converting to Principal & Interest from years 5-10
- The current interest rate is 3.11% per annum, no loan fees, etc.
- The facility does not allow for redraw however does provide for accelerated repayments as cashflow allows
Further criteria that entail the commercial lenders understanding and support including no more than 50% of current finance can be restructured under the above proposed loan.
Each assessment will be undertaken by the RIC with a critical focus on understanding the financial impacts of drought that have been (or will be) experienced in your business with a key timeframe as being 2 years in duration for these impacts, whatever they may be depending on the business.
New South Wales Government Initiatives
In June 2019, the NSW Government announced additional drought assistance measures for farmers including a $350 million increase in the Farm Innovation Fund and $70 million to continue rebates on the Drought Transport Subsidy.
- The NSW Government has committed $1 billion to the Farm Innovation Fund under the Emergency Drought Relief Package 2019-20. From 1 July 2019, farmers can borrow up to a maximum of $1 million per project, with a total of $1,000,000 outstanding at any one time to build on-farm infrastructure, including stock containment areas. In addition, interest charges on Farm Innovation Fund loans for the 2019-20 financial year will be also be waived.
- The Emergency Drought Relief Package 2019-20 also includes $70 million for Drought Transport Subsidies. The subsidy can be applied to the cost of transporting; fodder, water to a property for stock or domestic use, stock to and from agistment, stock to sale or slaughter. For applications received from 1 July 2019, the subsidy also includes transporting of farm chemicals, fertiliser, and seed to farms.
- The On-Farm Emergency Water Infrastructure Rebate scheme is available to eligible primary producers who can claim a rebate of 25% of the cost for; new purchases, installation of pipes, water storages and water pumps, de-silting dams, and associated power supplies such as generators. This rebate scheme can be applied to costs incurred from 1 July 2018. The maximum that can be claimed is $25,000 per farm enterprise. The availability of rebates is subject to funds being available. No rebates will be offered beyond the allocated funding of $12 million.
Victorian Government Initiatives
On 2 October 2019, Victorian Premier Daniel Andrews and Victorian Minister for Agriculture Jaclyn Symes visited Bairnsdale in East Gippsland and the Millewa in North West Victoria to announce a further $31.6 million in assistance for drought-affected farmers.
The Victorian Government has been working closely with local communities and the funding boost will assist farmers and communities impacted by drought and dry conditions in Wellington and East Gippsland, the Millewa and surrounds and the Goulburn Murray Irrigation District (GMID).
The package includes:
- $15 million for a Farmers’ Drought Fund
- $5.2 million for a Local Government Services Support Payment
- $4.6 million for the Catchment Management Authority Drought Employment Program
- $2.3 million for Farm Business Management and Planning Support services
- $2 million for mental health support
Did you know? There is now a 25% water rebate available for permanent horticultural plantings.
The On-Farm Emergency Water Infrastructure Rebate Scheme provides a one-off 25% rebate up to $25,000 (GST exclusive) to eligible primary producers for the costs associated with the purchase and installation of on-farm water infrastructure that improves resilience to drought.
The scheme is now available for the purchase and installation of emergency water infrastructure for permanent horticultural plantings which may include the costs associated with drilling new horticulture groundwater bores and desilting dams.
Ask one of our specialist agribusiness advisers today for information on accessing these support measures.