The Coalition Government has today introduced legislation delivering on a key Ag White Paper initiative to strengthen the Farm Management Deposit (FMD) scheme, enabling farmers to better manage during periods of uncertainty.
Minister for Agriculture and Water Resources, Barnaby Joyce, and Federal Member for Parkes, Mark Coulton, said the Treasurer, Scott Morrison, has introduced fairer FMD arrangements for farm businesses to help farmers use income generated in good years to prepare for the inevitable bad ones.
Minister Joyce said the changes to come into effect on 1 July 2016 will double the deposit limit for FMDs from $400,000 to $800,000, allow financial institutions to offer FMDs as farm business loan offset accounts and re-establish early access provisions in times of drought.
“These amendments, originally announced as part of the Agricultural Competitiveness White Paper, will allow farmers greater flexibility in managing and accessing their own funds when they’re needed, as well as improving cash flows for farmers,” Minister Joyce said.
Mr Coulton said these are sensible, practical changes that will make a real difference to how farmers prepare for and manage through times of uncertainty—like drought—and access saved funds to ease the pressure.
“Managing risk and uncertainty are part and parcel of working the land in this country, and our farmers are some of the best in the world at that,” Mr Coulton said.
“But no matter how shrewd you are, consecutive seasons of drought, floods, fires and other unforeseen circumstances put pressure on even the most viable farm businesses. This scheme helps farmers increase their self-reliance and gives additional tools to manage during tough times.
“As of 31 December 2015, Australia’s farmers had deposited $3.96 billion in FMDs and we want to make sure this scheme remains useful and fit-for-purpose now and into the future.”
Minister Joyce said the Ag White Paper is already making a tangible difference for farmers in their approach to drought and risk management.
“Through the Ag White Paper, we are investing a total of $2.97 billion to support farmers and rural communities to strengthen drought preparedness and risk management,” Minister Joyce said.
“We have provided certainty for in-drought concessional loans for the next decade, investment for better seasonal forecasting, more favourable depreciation arrangements for water and fodder worth around $86 million and support for drought-affected communities in the form of shovel-ready projects and funding to manage pest animals and weeds.
“We are delivering for Australian farmers and rural communities and this measure is another clear reflection of that commitment.”
For more information on the changes to FMDs, please visit www.agriculture.gov.au/fmds