The State Government will announce today it will invest in the "readiness and resilience" of the state's agriculture industry via the new $250 million Drought Ready and Resilient Fund (DRRF).
Loans via this new fund will include operational practices such as fodder and transport of livestock, which broadens the funds application from the infrastructure focus of the Farm Innovation Fund.
The Farm Innovation Fund, meanwhile, will be rebadged as the Drought Infrastructure Fund, offering loans of up to $1 million at an interest rate of 2.5 per cent.
These changes come after NSW Minister for Agriculture Tara Moriarty was questioned in Budget Estimates last month about the Farm Innovation Fund when she had indicated changes were afoot.
The rebadged Drought Infrastructure Fund will retain the $120 million of remaining money still budgeted in the Farm Innovation Fund, with the government to monitor its uptake before considering any top-ups.
The new DRRF will allow eligible primary producers to apply for low interest loans of as much as $250,000 to fund a broad range of operational products, activities and services to prepare and respond to the impacts of drought, the government said in a statement released today.
Ms Moriarty said the DRRF would allow farmers to access loans for other core activities like the purchasing of fodder and transport of livestock to protect their welfare, not just capital investments.
"The new Drought Ready and Resilience Fund is being established for farmers to use as an ongoing resource for both drought preparedness and also in-drought support," Ms Moriarty said.
"Because the new fund covers operational costs, this is advantageous during a drought experience."
In conjunction with the lanch of the DRRF, she said the Drought Infrastructure Fund had been "refocused" to promote capital investment in on-farm infrastructure that assists farmers in transitioning their farms to become more resilient, productive and sustainable.
NSW Farmers' president, Xavier Martin, said the clarity the government has provided early in the drying cycle will help farmers in their business decisions.
"These loans, announced before drought hits hard, help farmers to make proactive decisions," Mr Martin said.
He said the DRRF would also aid cash flow management for critical on-farm drought management tasks, particularly for livestock producers.
"For the first time, farmers will be able to access the loans for operational activities, including purchasing fodder and stock transportation costs," he said.
He said the association was also pleased to see an invigorated focus on the Farm Innovation Fund with the $120 million balance being reallocated as the Drought Infrastructure Fund.
"This will aid the grain sector to increase on farm storage, and also potentially support the horticulture sector to expand their critical water infrastructure and storage needs," he said.
He said there were communities in NSW that were not as yet drought-affected, but the DRRF would be an incentive for farmers in those communities to participate in planning and preparedness measures to improve response and recovery times.
"However, for those that have seen drying conditions for some months and have already expended considerable funds for fodder and transport, this loan opportunity may be beyond them," he said.
"We encourage the government to recognise that drought has a slow creep and request the Minns Government to be vigilant and open to additional support if conditions deteriorate further."
Ms Moriarty said these changes would ensure farmers knew support was there for them during drought and could also be used to get them through as an alternative avenue for infrastructure investment.
She said by establishing these two types of funds, the Government was creating options and flexibility for farmers, depending on their needs and circumstances, helping to ensure the viability of agricultural operations - livestock, cropping or horticulture - across NSW.
