The Coalition Government has introduced legislation that delivers on a key Ag White Paper initiative to strengthen the Farm Management Deposit (FMD) scheme, enabling farmers to better manage their operations during periods of uncertainty.
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 for Agriculture and Water Resources, Barnaby Joyce, said the changes to come into effect on 1 July would 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.
Country Liberals Senator for the Northern Territory, Nigel Scullion, said these were sensible, practical changes that would 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 is part and parcel of working the land in this country, and our farmers are some of the best in the world at that,” Senator Scullion 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.”
Through the Ag White Paper, the Government is investing a total of $2.97 billion to support farmers and rural communities to strengthen drought preparedness and risk management.
For more information on the changes to FMDs, visit: www.agriculture.gov.au/fmds