concessional loans

Plain English guide to the dairy concessional loans in Victoria

/ dairymilkmaid / 3 Comments

Victoria

Like just about everything else involving the dairy debacle, the facts surrounding the Commonwealth concessional loans for dairy farmers and their roll-out in Victoria has been clouded in confusion.
A big thank you to the office of Minister for Agriculture and Regional Development, Jaala Pulford, for answering Milk Maid Marian’s questions.

  1.        Who can apply?

The Commonwealth Government has indicated the loans will be available to farm businesses that supplied milk to Murray Goulburn and/or Fonterra in 2015-16. Evidence of a milk supply contract and/or statement in 2015-16  to Murray Goulburn and/ or Fonterra will be required to prove eligibility.  The Victorian Government has sought changes to eligibility requirements to enable suppliers of other processors to access the scheme. Changes have also been sought to ensure share farmers and young farmers can access loan arrangements. The Commonwealth has not made the requested changes.

  1.       $30 million is available while the Federal government is in caretaker mode. This won’t cover many farms. Why must the rest wait until after October?

The Commonwealth Government’s Dairy Support package includes $55 million in Dairy Recovery Concessional Loans until 31 October 2016.  The Commonwealth has offered loan amounts of $30 million to Victoria; $10 million to New South Wales; $10 million to Tasmania; $5 million to South Australia.

Victoria has sought advice from the Commonwealth on loans available after 31 October 2016 arguing that Victoria’s allocation of the total $550 million pool should reflect that 70% of Australian dairy farms are located here. The Commonwealth have not provided advice on future allocations.

  1.        How much can individual farmers access? Originally, media reported that half a farmer’s debt up to $1 million  could be borrowed but recent media reports indicate a cap of $200,000.

The Commonwealth Government has determined loan amounts will be up to 50 per cent of total eligible debt to a maximum of $1 million. Eligible debt means debt that has been established upon commercial interest rates, terms and conditions and/ or debt to a dairy processor.

  1.        What is the interest rate and is it fixed or variable?

The interest rate is variable and set by the Commonwealth Government.  As at 1 June 2016 the rate is 2.71 per cent.

The Commonwealth Government variable interest rate will be calculated based on the average of the daily 10 year Commonwealth bond rate over a specified six month period. The concessional interest rate will be reviewed and revised if necessary in accordance with material changes to the Commonwealth 10 year bond rate, where a material change is taken to be a movement of 10 basis points (0.1 per cent). The rate will be published on Rural Finance’s website.

Victoria has sought changes to the scheme so that farmers can access lower interest rates available under the Natural Disaster Relief and Recovery Concessional Loans scheme. This scheme provided rates of 1.67% to storm affected farmers in the Sunraysia in 2014. The Commonwealth has not made the requested changes.

  1.        What if banks hold land titles as security for loans and don’t want to relinquish it to Rural Finance?

Based on previous experience with other Commonwealth Government Concessional Loans scheme, this scenario is rare.

  1.        Many farmers are reluctant to apply for drought loans because the process and criteria are too difficult. Have you been able to make it simpler for farmers to apply for these concessional dairy loans? If so, how will they be different and are the criteria publicly available?

The Commonwealth Government determines the eligibility and requirements for the Dairy Recovery Concessional Loans. Victoria has sought a number of changes to improve eligibility criteria but the Commonwealth has not made the requested changes.

  1.        Minister Pulford quoted as saying only 70 farms will access the loans. What is the basis for that figure?

The estimate is based on the experience of other previous and current Commonwealth Government concessional loans schemes in Victoria. The figure assumes full subscription and the average loan amount of previous comparable schemes being around $450,000.

NOTE from Milk Maid Marian: At the time of writing, Rural Finance was taking registrations of interest for the concessional loans. Call 1800 260 425.

A very unpopular dairy blog post

/ dairymilkmaid / 12 Comments

I suspect I am about to make a lot of enemies because there is an elephant in the room and few are in a position to point it out.

Here are the facts:

  • the last season has been dreadful
  • dairy farmers have free access to lots of information about we can keep cows healthy during fodder shortages
  • many dairy farmers who couldn’t afford skyrocketing feed costs have sold a lot of cows at ridiculously low prices so they can feed the remainder of their cows properly
  • farmers have gone broke but kept their cows healthy
  • cows do not starve overnight and watching them weaken over weeks or months would be more than I could bear yet reports of them dying in their hundreds have hit the national news

I was stunned. Perhaps people who would normally sell their cows off long, long before they reached the point of starvation couldn’t for some reason? Maybe they were hoping for a miracle? Maybe they were in denial?

It just doesn’t ring true, at least not for hundreds of cows as media reports suggest.

And it’s come out today that some published pictures of “starving cattle” were actually the carcasses of cows that had died of other causes. In fact, the vet whose leaked email urging MPs to act sparked the media stories, Dr Mike Hamblin, has since told Warrnambool newspaper The Standard that there is no animal welfare problem in SW Victoria:

“Warrnambool veterinarian Mike Hamblin said there was no animal welfare crisis in the region and that he believed farmers were looking after their livestock well in a difficult financial situation. Dr Hamblin said that while some stock were thinner than normal, he had not seen any starving.”

Yes, people need help. Yes, it is wonderful that the media stories have finally got the Victorian government to reach agreement with the Commonwealth on low-interest loans.

But do we really need to paint already suffering farmers as cruel by presenting pictures of dead cows to our political leaders before action is taken? The reality is that most farmers skip their own dinners to feed our animals. These dirty tactics may have won concessional loans for a few farmers but they have blown a lot of trust and, at the end of the day, we will all be the losers.

There has to be a better way to avert what is a genuine human crisis than fabricating an animal welfare one.