Questions over how low the interest rates are for the Drought Ready and Resilient Fund (DRRF) have been raised after the recent supplementary Budget Estimates session.
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During the session it was stated that the rates were 6.6 per cent for the five-year loan (5.6pc Treasury Bond rate plus an additional 1pc) while it was 7.2pc for a 10-year loan (6.2pc Treasury Bond rate plus an additional 1pc).
This was despite the Government stating 5.6pc for five years and 6.2pc for 10 years on the NSW government's Rural Assistance Authority website.
The Land has since found out that the website rates are in fact correct and there was miscommunication during the session that will be updated in the supplementary Budget Estimates transcript.
NSW Department of Primary Industries director general Scott Hansen confirmed the rate was currently 5.6pc for five years and 6.2pc for 10 years, which incorporated an administration cost for delivery of the loan.
Mr Hansen said the interest rate for the DRRF would be fixed at the particular time that someone applies for the loan.
"The interest rate is calculated based on the five- and 10-year NSW government bond rate, which varies monthly and is driven by interest rates," he said.
In November, the government announced the $250 million fund, which will allow eligible primary producers to apply for loans of up to $250,000 to use the money for a broad range of operational products, activities and services to prepare and respond to the impacts of drought.
But The Nationals NSW leader Dugald Saunders said the fund would provide little in the way of relief for farmers, who would have to pay back these loans at higher interest rates.
"The purpose of these funds should be to provide meaningful support at a time when it's needed most, not to be a money-making exercise for a government intent on boosting its own Budget bottom-line," Mr Saunders said.
As well as capital investment, the new fund allows applications for purchasing fodder, fencing equipment, stock transportation costs, veterinary and professional nutrition and welfare advice, fencing for rotational grazing, exclusion and cluster fencing, construction of containment feeding pens, stock shade structures, planting of trees, and stock and domestic water (including transportation).
