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NSW Govt announces drought fund for communities
NSW Farmers has commended the State Government’s $250 million Drought Ready and Resilient Fund (DRRF), aimed at aiding farmers in preparing for and responding to drought.
The DRRF is set to offer low-interest, fixed-term loans of up to $250,000. These loans are intended for establishing essential infrastructure and assisting in the management of cash flow for crucial on-farm drought management activities, especially beneficial for livestock farmers.
NSW Farmers’ President Xavier Martin has welcomed the proactive strategy in providing clarity at the onset of the dry season, aiding in strategic planning.
Mr Martin highlighted the importance of these pre-emptive loans, available prior to the full impact of drought, enabling farmers to take informed steps.
“These loans, announced before drought hits hard, help farmers to make proactive decisions. Farmers are always subject to climate variability, and having faced significant drought and disaster impacts in recent years, know that having a plan and some certainty as to how best to prepare for adverse conditions is critical,” Mr Martin said.
The DRRF marks a new chapter by allowing farmers to obtain loans for essential activities such as buying fodder and transport of livestock.
The Minns Government claims the DRRF was designed to encourage farmers in areas not yet affected by drought to engage in critical planning and preparation for drought management and adapting to climate changes.
This strategic involvement aims to improve response and recovery outcomes for farming businesses.
The DRRF is unique because it can be used for essential items such as:
- purchasing fodder
- feeding 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
- stock and domestic water (including its transportation).
NSW Farmers has also welcomed a revitalised focus on the Farm Innovation Fund with the $120 million balance being reallocated as the Drought Infrastructure Fund.
Offering loans of up to $1 million, at a low interest rate of 2.5 percent, the Drought Infrastructure Fund is designed to foster capital investment in on-farm infrastructure.
This initiative is focused on helping farmers transition their operations to be more resilient, productive and environmentally sustainable.
“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,” Mr Martin said.
“NSW Farmers congratulates the Minns Government for its proactive and forward-thinking approach to drought management. There are communities in NSW who fortunately are not as yet drought-affected, but the DRRF is incentivising farmers in these communities to participate in planning and preparedness measures to improve response and recovery times.”
The NSW Rural Assistance Authority’s research indicates that farmers could potentially save an average of $40,000 on a five-year loan through these specific loans, which are structured to be repaid over five-ten years.
NSW Farmers’ Policy Director Kathy Rankin said the loans are created to be rolled out quickly, to support farmers while they focus on the crucial drought planning decisions.
“But we are also urging the government to continue to closely monitor the situation and identify what further support might be needed should the drought deepen,” Ms Rankin said.
“While we’re aware that not all farmers are in a position to take up this loan, we’d like to encourage farmers who are facing financial difficulties to contact the rural financial counselling service to help with work through options. This service will help any farmers who are facing significant cash flow challenges.”
NSW Premier Chris Minns said the loans are a significant investment, demonstrating the government’s commitment to the resilience of farmers.
“We know being disaster-prepared is more important than ever before. This is a commonsense initiative that allows farmers to get ahead of the dry season and protect their livelihoods,” Mr Minns said.
According to Minister for Agriculture Tara Moriarty the two funds ensure there are additional options and flexibility for farmers, depending on their needs and circumstances across the state.
“This is an important investment in the resilience of this vital industry throughout the emerging dry conditions. The aim of this government initiative is to give farmers access to operational funding so they can get assistance to work through a challenging period,” Ms Moriarty said.
“This is a common sense approach to ensuring farmers and livestock producers across NSW have the resources they need in the event of drought. We will continue to monitor the drought indicator closely and ensure that farmers receive the support they need.”
Applications are now open for the Drought Infrastructure Fund, and for the Drought Ready and Resilient Fund applications are open from 1 December 2023.
Further information: https://www.raa.nsw.gov.au/
To read more about preparing for future droughts, click here.