Struggling farmers pay double interest rate in ‘rescue package’

Dairy farmers receive just a fraction of the government’s $555million rescue package – and they will have to pay that back at a VERY inflated interest rate

* Federal government will charge farmers double interest rate for loans

* Commonwealth accessed first part of dairy rescue funds at 1.5 per cent

* Embattled dairy farmers to repay 2016 loans at 2.7 per cent

* ‘Questionable line of credit’ says Victorian Agriculture Minister

* Deputy PM Barnaby Joyce promised loans at ‘cheapest rates possible

* Hardest hit farmers can only access 5 per cent of funds this year

* Processors Fonterra and Murray Goulburn cut raw milk price in May
Struggling dairy farmers will be forced to repay loans from a Commonwealth $555 million rescue package at almost double the 1.5 per cent rate the federal government has accessed the funds.

Victorian Agriculture Minister, Jaala Pulford, has slammed the program after revealing local dairy farmers doing it tough since milk processors slashed farm-gate prices will be able to access only $30 million in loans this year, at a rate of 2.7 per cent.

She said the next five months are critical for the worst-hit dairy farmers and releasing only five per cent of the total funding is not enough.

The Labor MP revealed to ABC Radiothat the deal cannot go ahead unless signed off by the Victorian Government because the state has been hardest hit by the milk crisis.
What people have been offered here is a questionable line of credit,’ she told the ABC.
She said the Federal Government need to show they understand the pain of farmers and that they are taking the matter seriously.

‘I think dairy farmers are entitle to ask Malcolm Turnbull and Barnaby Joyce, ‘what’s the go here?’,’ she said.

Her federal counterpart, Barnaby Joyce, last month promised to make the money available at the ‘cheapest rates possible’.

But under the plan only $30 million will be made available to Victorian farmers, the worst hit after industry giants Murray Goulburn and Fonterra slashed the raw milk price by up to 10 per cent in May.

The cuts mean that in many cases farmers will have to repay hundreds of thousands of dollars because their milk did not sell at the same high price it was bought by processors.
Murray Goulburn co-operative was formed in 1950 and is Australia’s biggest dairy producer with 2600 dairy farmers

NZ-based Fonterra was founded in 2001 and is the world’s largest dairy exporter and has 1200 Australian dairy farmers.

A spokesperson for the Deputy PM told Daily Mail Australia that Victorian Labor had ‘sought to end the bipartisan commitment to provide dairy assistance’.

The Commonwealth has offered Victoria $30 million from the $55 million allocated to the Dairy Recovery Concessional Loans this financial year, as part of an interim response,’ she said.

The Commonwealth is making available a further $500 million in concessional loans over 2016-17 and 2017-18, from which further loan funds will be made available to Victoria.’
Dairy farmers and their representatives have met with the Deputy Prime Minister in Victoria and said they wanted concessional loans – and the Coalition Government has delivered.

The interest rate for the Commonwealth Government’s drought concessional loans is calculated to be revenue neutral to meet the cost of borrowing and the costs of administering the loans scheme via the state governments.

‘The Commonwealth would be prepared to consider a lower interest rate if the Victorian Government was to forego administration funding.’
Canberra announced the support package announced last week, which will also include fortnightly allowances of $1000.

The government package also proposed $2 million to establish a commodity milk price index to allow for greater transparency and a dairy industry liaison officer in the Department of Human Services.

Mr Joyce said dairy farmers also wanted money on the table through the Farm Household Allowance.
That will allow a couple about $1000 a fortnight, this will keep the wolves from the door and the dignity in their house,’ he said.
With concerns over the stress and mental health of farming communities, $900,000 has been set aside to establish nine new counsellors across Victoria, Tasmania, South Australia and Tasmania.

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