Two leading agricultural leading organisations are calling for the state government to expand a drought loan package announced last week.
Drought-affected farmers of the Upper North, Murray Mallee and Riverland will benefit from a government-delivered loan scheme that has drawn criticism for its timing and limiting eligibility requirements.
There was no mention of loans for Eyre Peninsula farmers in the announcement.
The state government announced on 3 February that farmers from several drought-affected regions would have access to urgent financial assistance through the provision of low-interest loans.
The new assistance measure, the SA Drought Loan Scheme, will be funded with a cap of $200 million, and will allow for loans of up to $250,000 with a loan term of 10 years for drought-affected grain and livestock producers who meet certain criteria.
The scheme is only available to grain and livestock producers from certain councils within the Murray Mallee, Riverland and Upper North.
Recipients would be granted a two-year loan repayment holiday in which no principal or interest payments need to be made.
Loans will have concessional interest rates for the first two years at 50 per cent of the Commonwealth 10-year bond rate (currently 2.41 per cent).
During the last eight years of the loan term the rate would be based on the 10-year Commonwealth bond rate (currently 4.83 per cent).
Over the life of a 10-year loan term, this will be lower than the concessional interest rate of 5.18 per cent currently offered under the Australian Government’s Regional Investment Corporation loan scheme and commercial interest rates.
The loans are for working capital only and cannot be used to refinance existing debt.
Premier Peter Malinauskas said his government had always stood ready to offer more support to drought-affected farmers if needed.
“I’ve said before that we can’t make it rain, but we can take decisive action to support our farmers and ease their financial transition through the enduring impacts of drought,” he said.
Primary Industries Minister Clare Scriven said many areas of the state had received welcome rains and were on the road to recovery from the drought, but there were some areas where very little had changed.
“Areas such as the Murray Mallee, Riverland and Upper North have continued to suffer from drought and are facing significant challenges for the coming season,” she said.
“Providing access to working capital on discounted terms will support farmers while farm cashflow is recovering, including no need to make payments during the first two years.
“These loans will help some of our farmers in the hardest-hit regions to recover from drought and continue to work to feed our state, our nation and the world.”
Shadow Primary Industries Minister Nicola Centofanti said she had been calling for this kind of relief for more than a year, when farmers were on their knees in drought conditions and crying out for help.
“This announcement, delivered in the shadow of an election, will be seen by many producers for exactly what it is – political grandstanding from a Premier who turns up when times are good and votes are on the line,” she said.
“A key question remains: will this support actually be there for the long term, or is it just a short-term headline?
“Farmers deserve certainty that help will be available into the future, not only when it’s politically convenient.”
Ms Centofanti said there were also concerns about the narrow eligibility criteria, with the Minister drawing arbitrary lines about who qualifies and who did not.
“Drought doesn’t stop at a boundary on a map, and neither should support for farming families and regional businesses,” she said.
“These are family operations and major employers in our regions who feel forgotten. They need a government that has their back at all stages, not one that only turns up when an election is looming.”
Grain Producers SA chairperson John Gladigau said the announcement was a significant step forward for South Australian grain producers who had endured consecutive tough seasons.
“This is a strong and sensible response to the pressures grain producers are facing in some parts of South Australia from prolonged dry seasons,” he said.
“The feedback we received from grain producers is that cashflow for those farmers who have been battling is critical.
“These working capital loans are about giving farmers breathing room – to keep businesses operating, maintain their workforce, and be in a position to recover when the better season comes.”
Mr Gladigau said Grain Producers SA was in close contact with the state government to address the needs of farmers in other areas.
“We are working closely with the state government to ensure eligibility settings reflect on-ground conditions, minimise red tape and deliver support to farmers as quickly as possible,” he said.
“While the initial focus is on targeted drought-affected areas, we recognise there are grain producers in other regions who may also meet the criteria, and we will continue working with the government so this is appropriately addressed.”
A Livestock SA spokesperson said the measure might assist some producers with short-term cashflow pressures, but it was not a universal solution.
“The eligibility criteria and regional targeting mean there will be producers experiencing genuine drought stress who are unlikely to qualify under the current settings,” the spokesperson said.
Livestock SA also noted the scheme was highly conditional, with loan access dependent on specific geographic definitions, drought duration thresholds and financial assessments that might exclude mixed-farming and livestock businesses whose circumstances did not neatly align with program criteria.
“Drought does not respect boundaries on a map, and support mechanisms that rely heavily on rigid eligibility rules risk leaving producers behind,” the spokesperson said.
“Importantly, the loans remain an interest-deferral product rather than genuinely low- or no- interest finance, with interest continuing to accrue during the repayment holiday period.
“For many producers already carrying elevated debt levels after successive dry seasons, this limits the long-term effectiveness of the support.”
If you are outside the supported regions but meet the loan criteria, email info@grainproducerssa.com.au as GPSA will be working with the state government for grain producers outside of the initial target areas.
