Labor Weighs RIC Setting Change After Agriculture Minister's Farm Visits

Strategic Insights -

Labor's call for interest-free loans for farmers affected by drought and floods has been echoed by producers and farm leaders who have met with Agriculture Minister Julie Collins during her recent visits to drought-impacted properties in South Australia and Victoria. Prime Minister Anthony Albanese has asked Ms Collins to report back with immediate relief measures, including the viability of adjusting RIC loan settings and assistance for accessing fodder. Meanwhile, Labor's energy spokesperson Dan Tehan has called for the Regional Investment Corporation (RIC) to provide interest-free or lower interest loans for farmers.

Key Takeaways:

  • The Regional Investment Corporation (RIC) has seen a 30% increase in new loan applications nationally from January 1 to May 31 this year, compared to the same time last year, with a 60% increase from Victoria and a 55% jump from South Australia.
  • RIC customers are taking out mainly farm investment and drought loans to reduce interest payments and increase cash flow, using the money saved to pay bills and wages, buy feed, and water.
  • Labor's energy spokesperson Dan Tehan has called for the RIC to provide interest-free or lower interest loans for farmers affected by drought and floods.
  • The average loan size for RIC customers is around $1.3 million, with a total of 3,379 loans settled nationally valued at over $3.59 billion since its inception in 2018 to May 31 this year.
  • RIC has a $349m budget for the 2025-26 financial year available for new loans.
  • The state lobby and Australian Dairy Farmers have called for 'Category D' disaster support under the National Emergency Management Agency's arrangements to be activated to allow farmers to receive low-interest loans or cash grants to help buy in water and feed.
  • Farmers in South Australia and Victoria are "crying out" for short-term financial assistance due to historic drought conditions, with feed costs having doubled and farmers having to import feed from the Northern Territory and Western Australia.
  • Labor has announced a $36m increase to the Future Drought Fund Communities Program to help producers prepare and respond to drought, as well as an additional $2.8m to the Rural Financial Counselling Service.

Statistics:

  • 30% increase in new loan applications nationally from January 1 to May 31 this year, compared to the same time last year.
  • 60% increase in loan applications from Victoria and a 55% jump from South Australia.
  • $349m budget for the 2025-26 financial year available for new loans.
  • $3.59 billion total value of loans settled nationally since inception in 2018 to May 31 this year.
  • 3,379 loans settled nationally since inception in 2018 to May 31 this year.
  • $36m increase to the Future Drought Fund Communities Program.
  • $2.8m additional funding to the Rural Financial Counselling Service.

Sources:

  • Jason Gregory, "Labor weighs RIC setting change after Ag Minister's farm visits"
  • Dan Tehan, Member for Wannon, South-west Victoria
  • Julie Collins, Agriculture Minister
  • John Howard, RIC Chief Executive
  • NSW Farmers
  • Australian Dairy Farmers