The Morrison Joyce Government is investing $75 million to help bring young Australians back to the farm.
Member for Groom Garth Hamilton said the Future Farmer Guarantee Scheme pilot would help address one of the key barriers for people entering agriculture – access to capital.
The Liberals and Nationals Government guarantee 40 per cent of an eligible new farmer’s commercial loan up to a maximum value of $1 million.
“We know our farmers are keen to help the next generation get their start and the government is using every lever we have to encourage young people on the land,” Mr Hamilton said.
“Lowering the barriers for future farmers is an investment in the future of our regions.”
$1.45 million will be provided to the Regional Investment Corporation (RIC) to administer the program which will open 1 January 2023, and funding for the $75 million guarantee will come from existing RIC appropriations.”
- The scheme is expected to open 1 January 2023.
- Administered by the Regional Investment Commission, and commercial lenders participating in the scheme would provide loans for eligible applicants on terms agreed between the commercial lender and the borrower. Banks will be able to offer better terms in the presence of the guarantee – lower interest rates and lower equity requirements.
- New entrants who the scheme may benefit include:
- First time farmers seeking to purchase, establish or develop a farm business in which they hold or will hold the sole or controlling interest;
- First time farmers seeking develop either a recently established or acquired farm business;
- Farm business successors and farm asset successors to assist with succession arrangements;
- First time farmers seeking to enter into lease or share farming arrangements;
- Existing lease and share farmers seeking to further develop their business.
- Eligible loans will have a maximum term of 10 years, with an option to extend the loan term by two years for applicants who are experiencing significant financial hardship. The maximum Loan to Value Ratio will be capped at 70%. Applicants must have at least three years of relevant on-farm or equivalent experience.