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$75 million to assist farmers into ownership

The Liberals and Nationals Government is committed to supporting the long-term economic future of our regions.

That is why the Liberals and Nationals Government will pilot an 18-month $75 million Future Farmer Guarantee Scheme to support farmers into first time ownership. 

Under the scheme, the Government will guarantee 40% of an eligible new farmer’s commercial loan up to a maximum value of $1 million.  

Minister for Agriculture and Northern Australia David Littleproud said the scheme would assist experienced farmers to address the number one barrier to establishing their own farm business – access to capital.

“Existing landholders are ageing – the average broadacre farmer is 62 years old, with only 10 per cent aged under 47,” Minister Littleproud said.  

“Rising land values and the typical 40 to 60% equity deposit required by commercial banks without this Government guarantee mean that getting access to a bank loan to start a viable business is very difficult.

“This support will help families access capital to assist with succession planning, as well as help those families and farmers getting into ownership for the first time.  

“Government sharing the risk means that the bank can offer better terms to suitable applicants – lower interest rates and lower equity requirements.

“This is not a free for all – applicants will need to have on-farm experience, a minimum deposit and be a sound lending prospect from the banks perspective. The farmer is still on the hook for their loan. 

“Lowering the barriers for ownership for our future farmers is an investment in the future of regional Australia.

$1.45 million will be provided to the Regional Investment Corporation to administer the program which would open 1 January 2023, and funding for the $75 million guarantee will come from existing RIC appropriations. 

Fast facts:

  • 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.

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