A FINANCE vehicle already exists to help farmers in need, so why is Barnaby Joyce pushing to abolish it, asks Queensland Labor Senator and former Federal Agriculture Minister JOE LUDWIG.
OPINION: THIS government truly can’t see the forest for the trees.
I welcomed the news on Monday that Barnaby Joyce would fight for the creation of a rural bank.
Rural Australia needs a finance vehicle for farmers seeking to make sensible investments that will improve their businesses and deliver better results for the sector.
Here’s the bizarre part – one already exists and Minister Joyce and his party want to abolish it.
As Minister Joyce has correctly identified, there is a market failure for farmers seeking to attract new capital.
It’s the reason Wayne Swan and I established the Farm Finance loans scheme to roll out affordable, low interest loans to otherwise viable farmers who were in need.
The take up of the government offered loans shows the gap in the market exists.
I met with countless farmers who were struggling to get by, but knew that with the right business changes they could become more productive.
All they needed was a capital injection at an affordable price. It was a hurdle many couldn’t overcome.
So consider the fact that right now there is a $10 billion loan and investment body owned by government.
It is attracting billions more in private co-investment for companies to create new projects and to retool their operations.
What’s more, it is investing in rural and regional Australia and its investments are drawing in a benefit to the taxpayer that is more than double the five year bond rate.
It’s called the Clean Energy Finance Corporation (CEFC) and the Abbott Government has introduced legislation to see it shut down this year.
Established by Labor as part of the carbon pricing scheme the CEFC has the job of using its public funds to garner private investment into clean energy projects.
The CEFC has form in supporting farm businesses already having invested in abattoirs, Darling Downs Fresh Eggs and apple and pear growers in the Goulburn Valley to reduce emissions and reduce farm power bills.
By investing only 5 per cent of its $10 billion in available funds the CEFC has already leveraged $2.2 billion worth of projects from the private sector, with up to $14 billion more in the pipeline.
Ably lead by Jillian Broadbent AO the CEFC has made conservative investment decisions to address a gap in the marketplace, namely loans for business projects that lower emissions.
Reducing emissions might be the primary goal but in doing so the CEFC is making viable rural and regional businesses stronger, more efficient and more productive.
With this outstanding record of achievement, imagine what the CEFC could do for the bush.
The Corporation’s remit could easily be expanded so, in addition to clean energy, it could also invest and seek private co-investment in projects designed to support farmers and their businesses.
It would be a welcome relief for farmers struggling to raise the capital they need to make their businesses last well into the future.
If Minister Joyce was fair dinkum about standing up for the bush he’d be standing up against his dry cabinet colleagues trying to abolish the CEFC.
When I was Agriculture Minister I sat at a cabinet table with Ministers who wanted to improve the lot of people in the bush.
As Treasurer, Wayne Swan backed farmers to the hilt as our Farm Finance loans prove, which was a measure we developed together over conversations in our shared apartment in Canberra.
Barnaby however seems to be the odd man out in this government. His Treasurer, Joe Hockey, couldn’t get on radio quick enough this week to shut down Joyce’s proposal.
People in the bush would be scratching their heads at the choices this government is making.
On one hand they can happily throw $16 million for the multinational Cadbury in a marginal seat in Tasmania and another $20 million for marriage advice handouts, they even found $8 billion for the Reserve Bank, but can’t seem to find a dollar for rural Australia.
Barnaby has proven himself to be very effective at making plenty of noise, but he hasn’t turned it into results.
If he applied the same determination to the bush that he has to rolling Warren Truss then farmers might have a fighting chance with this government.
In the meantime though Minister Joyce’s latest Don Quixote moment will be cold comfort for farmers.