Farm Finance available to eligible Queenslanders but questions remain

FROM this week, eligible Queensland farmers can apply for concessional loans under the Farm Finance package.

The questions farmers will be asking are what are the eligibility criteria, and how many farm businesses will this package be able to assist?

The basics underpinning the program are it makes available to Queensland $30 million a year for two years for Queensland primary producers to access concessional loans, currently at the variable concessional interest rate of 4.5%.

Loans are available up to $650,000, and while they can be interest only, they must be repaid within five years.

The program is not tied specifically to drought or other disasters but is geared toward restructuring debt.

Its genesis was in north-west Queensland, where problems associated with the live export ban, drought and a subdued cattle market had a notable effect on the industry.

The funds are provided by the Federal Government but administered by the State Government’s Queensland Rural Adjustment Authority, and will be available across the state and across rural industries.

Queensland Farmers’ Federation welcomes the package but does have some concerns and remaining questions about it and its functionality.

Firstly, it would seem that Farm Finance would be available only for 100–150 farmers, which, depending on the uptake, could mean eligible farmers miss out.

There is also the quandary that to be eligible, a primary producer must be able to demonstrate an ability to repay debt and service a loan, while at the same time being able to demonstrate a need for the assistance with a new loan, such as being in a financially distressed situation.

There is a risk such seemingly conflicting and confusing criteria will see farmers shy away from the process.

It is unclear how this specific aspect of the guidelines, which on the surface seems unclear, will be reconciled.

It also remains unclear how the criteria of the $650,000 cap and the five-year term were determined.

Both will afford breathing space, as will the interest-only component.

However, without being backed up by evidence and data, it is again difficult to assess how well the program will achieve its objects.

The ultimate point is that the Farm Finance package will be another useful and welcome tool in the toolbox.

But it may only be useful to help a small number of individuals.