Drought loan scheme extended

Following negotiations, WA is next in line to roll out its Drought Concessional Loan Scheme to help farmers recovering from and preparing for future droughts.

Agriculture Minister Barnaby Joyce announced on Friday that Queensland was the first State to roll out the concessional loans to farmers doing it tough.

New South Wales is to take applications from farmers shortly, Mr Joyce's office said.

Mr Joyce hopes to have all negotiations with WA finalised by the end of June.

WA's Agriculture and Food Minister Ken Baston and his staff have been in constant contact with Mr Joyce's office, negotiating aspects of the loans, which Mr Baston said will soon be available to WA farmers.

"I spoke with Mr Joyce on Sunday and I was assured the national drought package funding will flow into WA early in the new financial year," Mr Baston said.

A spokesman from Mr Joyce's office said the content of the negotiations could not be disclosed due to it being a matter of cabinet in confidence.

However Farm Weekly understands one element being negotiated is the amount WA will receive for the scheme.

Mr Baston has been pushing for the option of a further $10 million dollars on top of what has been offered by the Federal Government to cover the regions affected by poor seasonal conditions.

Mr Baston said he has worked hard to negotiate the criteria, determining what is a drought affected area.

"Importantly, more inclusive criteria will allow more areas in the eastern Wheatbelt to be eligible," Mr Baston said.

"I have been persistent in working for this outcome as under the Federal Government's initial drought criteria, all of the eastern Wheatbelt would have been excluded."

According to Mr Joyce's office, under the Federal Government's criteria, applicants will need to be in the 1 in 20-year rainfall deficiency area as defined by the Bureau of Meteorology, or a 1 in 10 area, where significant financial impacts can be demonstrated as the result of drought.

Other criteria such as on-going viability, loan security and the support of their commercial lender also apply, the same guidelines as in NSW and Queensland.

Due to the 1 in 10 area criteria, the eastern Wheatbelt will be included and be eligible for the scheme.

Mr Baston's spokesperson said the original definition of drought proposed by the Commonwealth would not have included the eastern Whealtbelt, though it is an area effected by poor seasonal conditions.

The scheme was designed to help farm businesses recover from and prepare for droughts and return to viability.

A drought concessional loan will have a term of five years, with a concessional interest rate period of five years.

Loans of up to $1 million, or 50 per cent of the farm business's eligible debt, whichever is lower, will be available.

Interest rates have been set at 4pc for the commencement of the scheme.

Mr Joyce said he was committed to ensuring the best possible outcome for farmers in WA, and that the Commonwealth was determined to get an outcome as soon as possible.

"I understand the frustration that WA farmers might feel about these delays in rolling out drought loans, especially given that we have secured approval for the same drought program in NSW and Queensland," Mr Joyce said.

"I acknowledge the delays in all States, but I am pleased that we have approval for both Queensland and NSW and that as of last Friday, loans for Queensland are available."