Cheap Government Loans for Farmers
The Federal Government will administrate the government loans for farmers, under an election commitment from the Coalition.
Barnaby Joyce, the Agriculture Minister, made an announcement regarding the administration of government loans and also mentioned how much will the Liberal-Nationals Coalition spend for the establishment of a Regional Investment Corporation. He said that the Coalition is going to allow $4.5 billion for this purpose so that this Corporation will supervise both Commonwealth loans for this economic field and water projects.
Benefits for farmers
The Agriculture Minister also mentioned that this solution would eliminate the need for governmental administration of federal loans for each state. Consequently, the Commonwealth will be able to help farmers with concessional loans for drought and dairy much easier, without having to deal with state governments.
According to him, this solution means cutting off the middlemen, which also implies that paying administration funding to each state will no longer be necessary. Therefore, the Regional Investment Corporation will be able to provide cheap government loans for farmers.
What led to this solution?
This new proposal is a result of days of debating between the Victorian and Federal Governments. The discussions were related to the administrations of finance options for dairy farmers affected by the dramatic decrease in the farmgate milk price.
The Victorian Government, which is also the administrator of drought concessional loans, took weeks to agree on the delivery of government loans. Also, the Agriculture Minister in Victoria said that the dairy support package offered by the Commonwealth was not adequate for Victorian farmers.
The response of Victorian Agriculture Minister
Ms. Jaala Pulford, the Victorian Agriculture Minister, reacted negatively at the solution brought by Mr. Joyce, as she said that such a loan deal would not solve the problems of the farmers in her state because many of them will be left out in the cold.
According to her, the solution of a new Regional Investment Corporation which will administrate government loans for farmers is not a good deal for her people.
Still, this project will have some undeniable benefits for Australian farmers. For instance, the dairy farmers will benefit from loans up to $200.000, with an interest rate of 2.7%, through Rural Finance. The Federal Government decided to allow $30 million for these loans immediately so that farmers can take advantage of them as soon as possible. However, they will need to access the funds, only available via Murray Goulburn and Fonterra suppliers.
Moreover, as Mr. Joyce said, the Corporation would also administer finance options for water projects.