Farmers will be helped to buy their first property under a $75 million pilot program offered by the Coalition to encourage more people to get into farming.
The campaign promise would see the government guarantee 40% of a qualifying new farmer’s business loan up to a maximum value of $1 million.
Agriculture and North Australia Minister David Littleproud announced the scheme during a debate with Labor Party agriculture spokesperson Julie Collins at the National Press Club in Canberra .
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Mr Littleproud said the scheme would help farmers get their loans, but insisted the money had to be repaid.
“It’s not a subsidy,” Mr Littleproud told the press club.
He said the upcoming Farmer Guarantee Scheme will help experienced farmers access capital, which he described as the biggest barrier to starting their own farming business.
“Current landowners are aging – the average farmer is 62, and only 10% are under 47,” said Minister Littleproud.
“Rising land values and the typical 40-60% capital deposit required by commercial banks without this government guarantee means that it is very difficult to access a bank loan to start a viable business.
“Government sharing the risk means the bank can offer better terms to suitable applicants – lower interest rates and lower capital requirements.”
Those who stand to benefit from this program include aspiring farmers looking to buy or expand an agricultural business in which they have a majority stake, as well as those looking to enter into lease or farm-sharing agreements.
The scheme will require applicants to have at least three years of farming experience, a minimum deposit and a good loan prospect, with the farmer still being required to repay the loan.
Mr Littleproud said the 18-month pilot program would begin in January 2023 and be administered by the Regional Investment Commission.
Ms Collins said Labor should consider the details of the scheme before deciding whether it would pass, but agreed that family farmers needed to be supported.