Barnaby Joyce calls for $7 billion relief assistance for farmer debt

The federal government said no to a $25 million bailout of SPC, but Agriculture Minister Barnaby Joyce wants it to assist in around $7 billion in farmer’s loans he expects won’t get paid, according to The Australian.

Joyce, also the Nationals deputy leader, spent the weekend visiting rural communities in Queensland and New South Wales, and told a meeting of farmers in southwest Queensland that rural debt had reached $70 billion, of which 10% was unlikely to be repaid.

He told the attendees he was in favour of a Rural Reconstruction and Development Bank within the Reserve Bank, which could take on poor rural loans from the private sector at a discounted price, The Australian reports.

However, he said it would be a “mighty battle” to get off the ground. “I will give it my best shot,” he said.

Joyce said in a statement that the impact of drought remained a primary concern for the rural sector.

“I know there are many farmers, and their families, who are doing it tough and facing challenging circumstances in many regions across Australia.

“The family farm is a central plank of our national economy and we need to make sure viable farmers have the chance to both prepare for and then survive droughts.”

Deloitte national industry leader of agribusiness, Rob McConnel, told SmartCompany that Joyce’s concerns about debt and the extent of the drought in rural Australia were “not over exaggerated”.

He says that even if it rains tomorrow, the effect of a long-standing drought will still resonate.

“There has been a ‘perfect storm’ in rural Australia,” he says. “Drought, no income, the high dollar and destocking…which is selling poor cattle at low prices.”

He says the debt comes from farmers paying operating costs amid these poor conditions.

McConnel says while support systems for farmers will always be welcomed by the rural sector, a key thing when assessing assistance packages is to look at how viable the sector will be in the future. He says the good news is that a recent report by Deloitte, ‘Building the Lucky Country’ found agriculture to be one of the most in-demand sectors over the next 20 years.

The report said with global population growth of 60 million per year, food will increase in demand, and it is expected that Asia’s growing middle classes are set to boost their protein intake, benefiting Australian farmers.

McConnel says this year the lower Australian dollar could help farmers, but the key will be consistent rain and whether that comes or not.

“If we do get it, the industry will be looking to restock and rebuild their herds…though the prices will be up as people won’t be selling, they will want to get the cattle on feed again.”