Concessional government loans worth $420 million will help farmers who are being "smashed" by the high Australian dollar and rising production prices, the National Farmers' Federation says.
Treasurer Wayne Swan and Agricultural Minister Joe Ludwig on Saturday announced a federal Farm Finance package, which will provide $60 million in loans for each state and the Northern Territory to help farmers restructure their debts.
Under the two-year scheme, loans of up to $650,000 would be made available as soon as possible to struggling farmers, with the funding to be allocated in the May 14 federal budget.
Farmers' federation Australian vice-president Brent Finlay welcomed the much-needed assistance for farmers, saying while some might not want to access the loans and take on more debt, others would now be able to reinvest in their operations.
"It's about upgrading their production systems, making their production systems more efficient and more effective," Mr Finlay told AAP.
"But it also allows them to restructure the way they've set up their production system. Maybe even downscale somewhere just to consolidate for a while."
As part of the Farm Finance package, 16 extra financial counsellors will be hired from July to work with agricultural businesses.
A tax relief deposit scheme to help farmers manage fluctuations in their income will also be overhauled from July 2014, including raising the off-farm income threshold from $65,000 to $100,000.
The assistance package follows a rural finance roundtable held in October last year, convened by Mr Swan, which heard how farmers were being hit by the high Australian dollar.
"Most of our commodities are export commodities, so the high dollar is absolutely smashing our farmers," Mr Finlay said.
"We also have the rising cost of production on our farms, and they're getting squeezed between the two."
Mr Swan said the federal government would work with state governments to deliver the concessional loans through agencies such as the Queensland Rural Adjustment Authority.
"We recognise that parts of the rural community are suffering, suffering particularly from a high Australian dollar," he told reporters in Brisbane.
"We think it is very important to get behind Aussie farmers who've got good prospects in the future, but who are doing it tough at the moment. We make no apologies for putting together a responsible package to support them through some difficult times."
Bob Katter said the government's plan was a step in the right direction and demanded states and territories match the federal commitment.
"There will be a very harsh and condemnatory judgement passed upon them by Australian farmers if they don't match the federal funding," the member for Kennedy said in a statement.
But Mr Katter said the measures announced on Saturday would only buy time for some farmers.
Addressing the "long term fundamentals" - including the high dollar, investment in ethanol and pricing for dairy, sugar and eggs - could deliver more security for farmers, he said.
Do you have any story leads, photos or videos?Source: http://news.ninemsn.com.au/national/2013/04/27/11/17/struggling-farmers-to-get-federal-loans
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