More soft loans on offer for farmers

Government-sponsored rural lenders will have access to a further A$60 million in funding from the Australian government, made available in a bid to address the politics of a supposed shortfall in private sector finance for farmers.

The Department of Agriculture, Fisheries and Forestry said on Friday that it will make a loan of up to $60 million available over two years to the relevant state delivery agency in each state and to the Northern Territory for the provision of the concessional loans to eligible farm businesses.

These lenders already extend more than $2 billion in farm funding, so the top up is pretty small beer.

Farm finance is also on the rise in any event. Rural finance from all lenders exceeded $66 billion on the most recent Reserve Bank of Australia data, or 25 per cent higher than five years ago. Growth in lending to the rural sector has increased faster than lending to all businesses over the same period.

The quarterly "pillar 3" reports from Commonwealth Bank and Westpac (the most most domestically-focussed major banks) also show a rise in lending for agriculture, though impairments are also higher at CBA.

More farmers will also qualify to make use of farm management deposits, which defer income tax from years of high income to draw from in years of low income.

The non-primary production income threshold will rise to $100,000, from $65,000, from July 2014.