Farmers will receive interest-free loans of up to $ 2 million, while Australia is fighting the worst drought ever recorded, Daily Mail Australia can reveal.
Prime Minister Scott Morrison will announce on Thursday that struggling graziers will receive emergency funds to feed their cattle and sheep, irrigate their crops and pay their farm laborers.
They also do not have to pay back two years before a reduced rate starts.
Farmers will receive interest-free loans of up to $ 2 million, while Australia faces the worst drought ever. Prime Minister Scott Morrison has announced that those on land will receive money to feed and transport their cattle and sheep, to irrigate their crops and to pay their farm laborers (photo is Mr Morrison on the left, with farmer David Goodingt in Dalby, Queensland)
How drought credits will work
Farmers are entitled to a maximum of $ 2 million without interest for two years
Small businesses in drought-affected cities are eligible for a loan of up to $ 500,000
Both farmers and small businesses would only pay back the interest in the years three to five
They would pay principal and interest from six to ten years
The government's regional investment company delivers $ 1 billion over four years
& # 39; Farmers do not have to pay a cent for the next two years, and even after that only interest on a discounted rate, & # 39; said Morrison.
& # 39; We will continue to provide more support as the drought continues. & # 39;
Under existing drought credits, with a duration of 10 years, farmers have to pay back immediately, but they only pay interest for five years.
As part of the new scheme, small businesses in cities affected by drought can borrow up to $ 500,000, even with a two-year interest-free period.
Just like the farmers, they will only be able to repay the loan in years three to five, before repaying both the principal and the interest from year six to ten.
The Australian Government's regional investment company will be charged with assessing whether a farmer or a small business in a drought-affected community should be eligible for the loan.
Farmers in drought-affected communities (owned at Bollon in Queensland, photo) are being saved for two-year repayments
What is a drought?
The Bureau of Meteorology defines a drought as an acute water shortage based on scarce rain.
The situation is serious when showers are within the lowest 10 percent band of recorded rainfall.
It is serious when the amount of rainfall is the lowest five percent ever.
The weather agency's record shows that the situation is particularly bad in New South Wales west of the Great Dividing Range.
Water flows to the Macquarie and Namoi valleys are the lowest ever, with rainfall at the worst level since 1920.
Both loan schemes are expected to cost taxpayers $ 1 billion for four years, depending on demand.
Financing of the loans comes from an existing pool of $ 2 billion within the government financing of the farm.
Morrison said the package was a recognition that the drought was hard, not only for farmers, but also for the cities associated with their fortunes, because graziers and small businesses were forced to look red on their bank accounts.
"We also know that the drought has been tough for small businesses that rely on agriculture," he said.
& # 39; Shaving contractors, harvesters and suppliers of livestock transport have seen their sales rise and in many cases struggle with survival.
& # 39; Rural communities cannot function without these small businesses, so we step in to provide this additional support. & # 39;
Morrison said the interest-free loans were designed to help farmers buy hay, transport their livestock, restore their fenders, and refinance their existing debt.
& # 39; Our drought plan has not been established and forgotten, & # 39; he said.
More than 99 percent of New South Wales is still in drought, with more than a third – or 34.7 percent – of the state suffering from an intense drought
& # 39; We have been back on the ground listening to farmers and their communities, and this package is a direct response to their feedback. & # 39;
More than 99 percent of New South Wales is still in drought, with more than a third – or 34.7 percent – of the state suffering from an intense drought.
The dam levels are at a dangerously low level, with the Keepit reservoir in the central west of the state with only 0.8 percent of the capacity.
The Burrendong dam is only 3.7 percent.
The situation is that poor towns and villages, including Dubbo, have tightened their water restrictions.
The residents there and in Orange are not expected to have any drinking water in the middle of next year.
The Morrison government increases funding to help drought-stricken farmers a month after former Nationals leader and vice-prime minister Barnaby Joyce suggested drought-stricken farmers should consider leaving the country if they had not made a profit in ten years .
A 2017 University of Melbourne research report concluded that Australia suffered from the worst drought in 400 years, based on a reconstruction of 800 years of seasonal rainfall patterns.
The Bureau of Meteorology has described the drought in Southeast Australia as the worst in nearly 100 years.
Precipitation levels in the Murray-Darling Basin, west of the Great Dividing Range, have been at the lowest level since at least 1920.
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