Fri, Nov 08, 2019 - Page 5 News List

Australia to loan millions to drought-ravaged farmers

Reuters, SYDNEY

The government will offer farmers hurt by drought up to A$1 billion (US$689.3 million) in cheap loans, Australian Prime Minister Scott Morrison said yesterday, as his administration seeks to curb rising discontent from rural voters.

Farmers across the nation’s east coast have been battling drought conditions for more than three years.

Agricultural production is sagging, and some towns are even on the brink of running out of clean water supplies for drinking.

With growing anger among the Conservative government’s traditional voter base, Morrison offered new financial aid, including temporary interest free loans, designed to allow farmers to stave off bankruptcy.

“What this is doing is supporting farmers and graziers who know they have a future in the sector, and are committed to getting to the other side of this drought, and knowing that better days are on the other side,” Morrison told reporters at a news conference in Canberra.

“This gives them the massive breathing space,” he added.

Any small business deemed to be dependent on agriculture will be eligible for a concessional loans of up to A$500,000, payable over 10 years.

To ease the financial burden, the government said there would be no interest payable over the first two years of the loan, while businesses would then pay only interest on the loan between years three to five. Principal and interest payments would then be due from year six.

The National Farmers Federation said the aid was especially needed as the drought shows little sign of abating.

The Australian Bureau of Meteorology expects just a 40 percent chance that the east coast would record average rainfall between Dec. 1 and Feb. 28.

The financial aid package was announced just weeks before the grain harvest, which typically begins next month.

Australia is among the world’s top 10 exporters of grain, the largest part of the nation’s agricultural sector that typically contributes about 2 percent to the GDP.

However, with almost no rain in recent months across New South Wales and Queensland, farmers do not expect to harvest any meaningful supplies, curtailing rural exports.

INTL FCStone on Wednesday said its poll of an unspecified number of clients pegged Australian wheat production at 15.54 million tonnes, 19.1 percent lower than Australia’s official estimate of 19.2 million tonnes.

With lower production, Australia — typically one of the world’s largest exporters — is also likely to lose greater market share in lucrative markets, such as Indonesia and South Korea, at a time of falling prices.

Morrison said the government would also sell 100 billion liters of water at discounted rates to farmers for growing up to 120,000 tonnes of fodder.

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