Australian farmers operate in a volatile business environment, subject to the vagaries of the Australian climate and fully exposed to capricious international agricultural commodity markets. Periodically, a combination of climate and market factors create particularly challenging periods for farm businesses, during which time there are inevitable business failures, and growth in the numbers of farm businesses that need to increase farm debt levels to continue operating. The current time appears to be one of those periods, although evidence suggests that heightened farm financial stress is being experienced in specific geographical locations and by the producers of specific commodities, rather than more generally across the entire sector.
This paper attempts to clarify the current farm debt situation in Australia, and to examine farm debt trends that have been occurring over the last two decades, within specific geographical regions and in different commodity production sectors. While the paucity of detailed financial statistics for many sub-sectors of Australian agriculture limit the comprehensiveness of this analysis, available data indicates that there is not currently a 'farm debt crisis' in Australia, although there are farm businesses in specific geographical locations and involved in particular commodities that are experiencing heightened financial pressure.