The National Farmers’ Federation says more funding announced today for the Regional Investment Corporation would improve the service’s ability to meet farmers’ needs.
NFF CEO Tony Mahar said as many farmers begun to rebuild from drought the no- and low-interest loans on offer by the RIC were highly valuable.
“However, the volume of demand and issues with the organisation for these loans has meant processing times has blown out. This is certainly not ideal for farmers looking to fund replanting and restocking exercises.”
Mr Mahar said Agriculture Minister, David Littleproud had assured the NFF he understood the frustrations of farmers and had today taken action to help ensure applications were processed in a more timely manner.
“The NFF welcomes the allocation of $50 million for additional resources to help clear the application back-log and better manage the application process into the future.”
“These additional resources are a good start. However, with average processing times now at 184 days, reform is needed.
“A recent Australian National Audit Office report recommended that the RIC set benchmarks or KPIs to reduce loan application processing times.
“We welcome the commitment of the Federal Government and the RIC to implement these recommendations and encourage them to do so as a matter of urgency.”
In response to the high level of demand, the Government, will also direct an extra $2 billion to concessional loan products – a doubling of the RIC’s farm and small business loan funds. The rate on low-interest loans will drop to 1.9% from 1 August.
However, Mr Mahar said given the obvious need for no-interest loans, it was disappointing that the Government would end the RIC’s two-year interest-free drought loan offering at the end of September.
“An interest-free period provides much-needed breathing space to farmers who’s financial and production capacity has been decimated by drought.
“Farmers are urged to submit their applications before 30 September, eligible applications submitted before this date will still benefit from the two-year no-interest offering.”
Mr Mahar welcomed a start date of 1 January for the much-anticipated AgriStarter loan program, which is designed to help with establishing or purchasing a farm business, as well as succession planning. AgriStarter loans will be for amounts of up to $2 million.
“In the Get Australia Growing document, NFF has identified the Agristarter loan as an important part of agriculture’s contribution to the nation’s COVID-19 economic recovery.
“Likewise, NFF’s vision for Australia’s farmgate output to tally $100 billion by 2030, hinges on engaging and enabling the next generation of farmers of which succession planning is a key aspect.
“We have a goal for 90 per cent of family farms which have more than two generations working in the business to have a documented succession plan by 2030,” Mr Mahar said.
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