With the Bureau of Meteorology warning of a dry summer and rainfall at record lows in 2024, the NSW Government is hoping to get on the front foot with the creation of a $250 million Drought Ready and Resilient Fund (DRRF).
The fund will enable eligible primary producers to access low-interest loans of up to $250,000 to both prepare for the impacts of drought and respond to the dry weather when it starts to bite.
“This is a significant investment which demonstrates our commitment to the resilience of farmers across our state, particularly as they enter drier and warmer weather conditions,” said NSW Premier Chris Minns.
“We know being disaster prepared is more important than ever before. This is a commonsense initiative that allows farmers to get ahead of the dry season and protect their livelihoods.”
In its latest drought statement, the Bureau of Meteorology revealed that the past six months have seen “areas of rainfall deficiency” in every state and territory.
NSW Farmers president Xavier Martin has given the fund the thumbs-up, saying the timing will give farmers clarity early in the drying cycle.
“These loans, announced before the drought hits hard, help farmers to make proactive decisions,” he said.
“Farmers are always subject to climate variability, and having faced significant drought and disaster impacts in recent years, know that having a plan and some certainty as to how best to prepare for adverse conditions is critical.”
Farmers will be able to fund more than just capital investment and put the money towards core activities.
“For the first time, farmers will be able to access the loans for operational activities, including purchasing fodder and stock transportation costs,” Mr Martin said.
“There are communities in NSW who fortunately are not as yet drought-affected, but the DRRF is incentivising farmers in these communities to participate in planning and preparedness measures to improve response and recovery times.”
Citing research from the NSW Rural Assistance Authority, the NSW Government said the five to 10-year loans offered through the DRRF would save farmers an average of $40,000 compared with other similar loans.
“The aim of this Government initiative is to give farmers access to operational funding so they can get assistance to work through a challenging period,” explained the Minister for Agriculture Tara Moriarty.
“This is a commonsense approach to ensuring farmers and livestock producers across NSW have the resources they need in the event of drought.
“We will continue to monitor the drought indicator closely and ensure that farmers receive the support they need.”
The $120 million Farm Innovation Fund has also been “refocused”, with the money placed under the Drought Infrastructure Fund offering loans of up to $1 million, at a low interest rate of 2.5 per cent.
It is hoped that the two types of funds will give farmers more flexibility and support across livestock, cropping and horticulture.
“This will aid the grain sector to increase farm storage, and also potentially support the horticulture sector to expand their critical water infrastructure and storage needs,” said Mr Martin.
Applications are now open for the Drought Infrastructure Fund, and the DRRF will accept applications from 1 December, 2023.
You can find out more here.