The Coalition has promised $75 million to help farmers buy their first farm, encouraging more people into the agriculture industry as land prices surge.
A $75 million Future Farmer Guarantee Scheme will be rolled out over 18 months, beginning on Jan. 1, 2023, according to Agriculture Minister David Littleproud.
The scheme would see the government acting as guarantor for 40 percent (up to $1 million) of a new farmer’s commercial loan. Applicants need to have at least three years on-farm experience and a minimum deposit.
“Existing landholders are ageing—the average broadacre farmer is 62 years old, with only 10 percent aged under 47,” Littleproud said during a debate with Julie Collins, Labor’s agriculture spokeswoman at the National Press Club on Tuesday.
“So we need to shift the dial to ensure there’s a sustainable agriculture sector and it’s not just predicated on corporate Australia, it’s predicated on the family farm.”
“Rising land values and the typical 40 to 60 percent equity deposit required by commercial banks without this government guarantee mean that getting access to a bank loan to start a viable business is very difficult.
“Government sharing the risk means that the bank can offer better terms to suitable applicants—lower interest rates and lower equity requirements.”
However, the minister insisted that the money needs to be repaid.
“This isn’t a subsidy,” he said. “The farmer is still on the hook for their loan.”
“What I don’t want to see is big corporates and foreign companies coming in and taking out the opportunity for succession to take place, where the son or daughter wants to have that go, to get a go.”
Administered by the government’s Regional Investment Corporation, the scheme would be available for 10 years at most, and the maximum loan-to-value ratio will be 70 percent.
While agreeing that family farmers need to be supported, Collins said Labor would need to review the details of the scheme.
The spokeswoman has not detailed the opposition party’s agriculture policies yet, despite saying that Labor’s climate change, regional housing, and telecommunications policies would be beneficial to the rural industry.
