Tuesday, July 30, 2013

Farmers facing debt crisis

Vanguard August 2013 p. 5
Duncan B.


Many Victorian farmers are facing financial hardship.

During July, hundreds of farmers contacted the Rural Finance Corporation when a new farm finance deal between the Federal and Victorian governments was announced.

The scheme will make concessional loans, up to $650,000, available to farmers so that they can
re-finance existing farm debt.

The loans will cover about 50% of a farmer’s total debt at an interest rate of 4.5%.

There are strings attached to these loans however.

Farmers receiving the loans must demonstrate that over the next three to five years they will be able to resume profi table trading and be able to manage the debts. What a lot of hoops to jump through!

A combination of dry weather, low milk costs and high fodder costs has meant that many dairy farmers have had to borrow money to buy fodder and grain to feed their cows.

Dairy processors such as Fonterra and Murray Goulburn are owed many millions of dollars in loans by their farmer suppliers.

In Fonterra’s case, their suppliers owe $18 million dollars, up $14 million from this time last year.

What can farmers do?

Small farmers must realise that their real interests lie with the working class, not with the big farmers and agribusiness corporations.

It is essential that they unite with the working class and recognise that workers and farmers have the same enemies. Small farmers are part of the United Front of Australians against imperialism.

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