The Federal Government is persisting with concessional loans for farmers despite the fact that the National Audit Office found last month that governments from both sides of politics have consistently mismanaged this form of agricultural relief.
Agriculture Minister Barnaby Joyce today announced a $555 million concessional loans scheme for struggling dairy farmers who have been affected by milk price-cuts.
However, in late April the National Audit Office criticised both the Coalition and the former Gillard Government for their poor handling of two different concessional loans programs.
The audit into the Gillard Government’s $420 million Farm Finance Concessional Loans Program and the Coalition’s Drought Concessional Loans Program found several “shortcomings”, including insufficient modelling, a lack of cost benefit analysis and poor monitoring.
The schemes were so unsuccessful that only half of the combined allocation has been taken up by farmers.
The audit found that there was a lack of consultation with delivery partners by the state and territory bodies that allocated the funding. It also said the programs were poorly designed.
Barnaby Joyce was in his seat of New England today where he announced that the new scheme will allow dairy farmers to borrow “one million dollars or half of what they owe, whichever is the lesser, so that they can assist themselves to get through this crisis”.
Opposition Agriculture spokesperson Joel Fitzgibbon supported the announcement, but claimed that if Labor is elected more would be done to help dairy farmers in financial stress.
He said “Look, I welcome the concessional loans as part of a package. But on their own they are not enough. We have to focus on cash flow.”
He also said “concessional loans have been a failure in the past”.
In regional electorates like Victoria’s Mallee, concessional loans schemes have had mixed success. Mallee farmer Thomas McGrath, who is also a member of the Young Farmers Ministerial Advisory Council, recently told UniPollWatch that rural communities have failed to take up the loans on offer.
“There is money out there and the agricultural industry isn’t grabbing enough of it. Even regional areas aren’t grabbing enough money”.
A concessional loan provides interest free funds for farmers for a designated period – up to five years in the case of the Farm Finance Concessional Loan Program. The repayment schedules are designed to reduce stress on the recipients and can vary according to climatic conditions.