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Briefing paper
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Debt is an important source of funding for farm investment and ongoing working capital, particularly for the family owned and operated farm businesses dominating most sectors of Australian agriculture.

The Department of Agriculture and Water Resources (the department) delivers a number of measures on behalf of the Australian Government to assist farmers with debt financing, including a $2.5 billion commitment over 10 years for concessional loans. The Regional Investment Corporation (RIC) will deliver farm business concessional loans and the National Water Infrastructure Loan Facility (NWILF) from 1 July 2018.

The government is also continuing to work in a number of other farm debt and finance related areas, including discussing a nationally consistent farm debt mediation scheme with state and territory governments, and commencing the annual collection of detailed information on agricultural debt.

This background paper summarises a range of existing information from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), including data from the farm surveys it conducts, and other public resources.

This data indicates:

  • Nationally, total indebtedness of the agriculture, forestry and fishing industries to institutional lenders was $71.7 billion at 30 June 2017.
  • Bank lending accounts for 96 per cent of total institutional lending to agriculture, forestry and fishing industries, with bank lending accounting for $68.6 billion at 30 June 2017.
  • Debt to fund land purchases accounts for the largest share of debt on farms, accounting for an estimated 44 per cent of average broadacre debt at 30 June 2017. Working capital debt accounted for 37 per cent of average broadacre debt at 30 June 2017.
  • Much of the aggregate agriculture sector debt is held by a relatively small proportion of mostly larger farms. At 30 June 2017, around 70 per cent of aggregate broadacre debt was held by just 12 per cent of farms.

This background paper also provides some information from the first annual (2017) Agricultural Lending Data collection undertaken by the Australian Prudential Regulation Authority (APRA). While this data is not yet finalised, it indicates (at 30 June 2017):

  • The average debt (total credit outstanding) per business entity (effectively ‘borrowers’) was $481,428 as at 30 June 2017.
  • The average credit limit per business entity was $579,055 as at 30 June 2017.
  • Of farm business entities with borrowings, 0.65 per cent had loans more than 90 days past due.
  • Of the total value of loans, 0.90 per cent was more than 90 days past due.


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