The Australian federal government will introduce a loan guarantee scheme for first-time farm buyers if it is re-elected in May, a move that agriculture minister David Littleproud framed as favoring locals over “corporates and foreign buyers.”
The Liberal-National Coalition government announced this week that the Future Farmer Guarantee Scheme would run as a pilot programme for 18 months, with A$75 million ($55.6 million; €51.5 million) of funding available. The government will guarantee 40 percent of an eligible new farmer’s commercial loan up to a maximum value of A$1 million.
Announcing the policy during a debate at the National Press Club in Canberra this week, Littleproud said the support would help farming families access capital more easily for the purposes of succession planning.
“This is about giving young people a go. [It’s] not for corporates, but for family farms. They’re the backbone of our regions, they’re the backbone of our nation. A guarantee gives them the opportunity… that I hope leaves a legacy for Australian agriculture for generations to come,” he said.
Responding to a question about the purpose of the policy and whether it qualified as a subsidy for small farmers, Littleproud said: “What I don’t want to see is big corporates and foreign companies coming in and taking out the opportunity for succession to take place, where the son or daughter wants to have a go. This is an opportunity for [our young people] to have a go.”
The government said that applicants would need to have farming experience, have part of the deposit saved already and be a sound lending prospect from the perspective of a bank to qualify for the loan guarantee.
The scheme will be administered by the Regional Investment Corporation and will be open from January 1, 2023. 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, and the maximum loan to value ratio will be capped at 70 percent.
Australia goes to the polls on May 21. Opinion polls point to a close contest, with the governing Liberal-National Coalition defending a one-seat majority in the House of Representatives.