Joyce commits to rural debt 're-tweaks'

The meeting was chaired by federal Agriculture Minister Barnaby Joyce and involved 40 key stakeholders, including rural banks, farm groups and government departments.

Queensland LNP Senator Matthew Canavan attended the meeting and said problems with farm viability had been growing for a decade in rural areas, particularly in north Queensland, and would not be solved in an afternoon.

“But there were some resolutions from the meeting,” he said.

The first agreed resolution was ascertaining more accurate and factual data on the size and scale of the rural debt problem.

Senator Canavan said a rural debt survey had not been conducted in Queensland since 2011, partly due to banks having not co-operated, “for their own reasons”.

Mr Joyce said it was difficult to create a policy solution without having accurate data at the government’s disposal to clearly identify the problem areas.

Senator Canavan said the national rural debt mediation process had been in place until last year but had now “fallen off the radar”.

“Different States have different processes that handle the mediation of debt and some of them are working better than others,” he said.

“It seems right and proper while we have this debt issue that we try to harmonise those and come up with the best model across the country.”

Mr Joyce also agreed to adjust the eligibility criteria for the government’s $700 million farm finance and drought loan packages to better target assistance.

“If we have to change the settings of those [loans], then so be it, and if they’re more appropriate then I’m willing to go down that path and do it,” he said.

Senator Canavan said issues remained about getting the loan money out to those people who needed it most.

“It is a difficult issue because while the Commonwealth government provides the funds, State government agencies are actually responsible for lending the money,” he said.

The meeting was sparked by intense lobbying from the Gulf Cattlemen's Association last month in Canberra, warning the dire social and economic consequences confronting their industry were worsening due to persistent drought conditions and other economic factors.

Those factors include lingering price impacts of the former Labor government’s temporary suspension of live cattle exports to Indonesia in June 2011.

Association spokesperson Noeline Ikin said the roundtable meeting was always a difficult proposition, given the number of different stakeholder groups seeking to “defend their own positions”.

But she was buoyed by the agreed resolutions and pledged to “keep the momentum up for the northern beef industry”.

“There was definitely an incremental shift and steps were taken in the right direction,” she said.

“We now have to make sure we keep up that momentum and follow through on the resolutions agreed to at the meeting and keep pushing for solutions.”

Mr Joyce said collecting factual data to ascertain the scale of the debt problem - from the gulf of Queensland down to northern NSW - would be handled by the Australian Bankers Association, National Farmers Federation and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), with input from the Gulf Cattlemen's Association.

His commitment to “re-tweak” the $700 million drought and farm viability loans will be given his “best endeavours … knowing full well that approval doesn’t just rest with me”.

“I will now go about trying to change those [loans] so they’re more appropriately suited for people who require those facilities,” he said.

The Gulf Cattlemen's Association had also asked the government to guarantee current bank loans under duress, due to the live cattle export suspension’s impacts, for a period of five years.

But Mr Joyce said the government was “already in that space” through the drought assistance loans announced earlier this year, meaning the proposition was unlikely.

“I do have a hesitancy about saying we’re going to guarantee a whole range of peoples’ debts because just as sure as God made little green apples another group will turn up with a just as viable reason to say ‘well guarantee us as well’ and then [other] businesses will turn up and say ‘guarantee us as well’,” he said.

Mr Joyce said the government would now work with the Australian Bankers Association (ABA) and rural financial councillors to develop a standard form of national terms for the debt mediation process.

ABA CEO Steven Munchenberg said the roundtable provided progress but didn’t answer all of the problems or offer a universal solution.

“These are complex issues but we have made real progress and this is going to be the first of a number of discussions we’re going to see between the banks, the farmers and the government about what we can do to help,” he said.

Mr Munchenberg agreed better data was needed to provide clarity on the problems facing the northern beef cattle industry before any solutions can be developed.

He said there were different views about the level of rural debt and what that debt means, while stating the actual rural debt level was $61 billion.

On the request for a government guarantee on stressed loans, he said it was ultimately a government decision whether they would guarantee loans to farmers.

“We actually see the majority of debt in agricultural sector as a positive thing,” he said.

“It is investment (and) farmers are using that debt to improve productivity, which we’ve seen happen, to build scale.

“All of that’s necessary to make sure the agricultural sector can capture the opportunities that are going to come its way in future.

“The banking industry thinks the agricultural industry in Australia has a very bright future ahead of it – we’ve got a big investment in farming in Australia and we want to see that prosper.

“It doesn’t mean that everyone’s doing well and we understand there are some real issues [but] we’ve been able to target down on those issues today,” he said.

“Things like national farm debt mediation legislation are an important step forward to make sure that both farmers and their bankers have got the opportunity to work through issues when they arise.”