Regional Investment Corporation (RIC) has released its inaugural Farm Loans Customer Insights Report 2023 which has revealed RIC farmers are confident in their farm business and the agriculture industry’s future, however concerns about rising interest rates, drought and income volatility are top of mind.
The main concerns identified were increasing interest rates (82 per cent), water security and drought (61 per cent) and income volatility (58 per cent).
At the same time, customers surveyed agreed their RIC loan had given them greater confidence in their farm business’ future (86 per cent) and the industry’s future (76 per cent), made drought and natural disaster recovery easier (88 per cent) and were now more drought resilient (83 per cent).
RIC chief executive officer, John Howard said the corporation exists to provide farmers with financial breathing space to better manage situations outside their control and even though farmers are facing serious challenges, their loan has helped boost confidence in the future of their farm business.
“It’s no surprise that the cost of operating a farm business and challenges faced by severe, prolonged weather disruptions are top concerns.
“Pressures from rising interest rates and declining commodity prices across most sectors are causing farmers to rethink their options and how they will continue to remain prosperous and grow,” Mr Howard said.
RIC loans are available to farmers hit by tough financial times outside their control from drought, natural disasters, biosecurity issues or other market disruptions.
“It takes courage and grit to keep operating after facing these severe events, yet 88 per cent of customers surveyed agree their RIC loan has made this recovery easier.” Mr Howard said.
The 2023 report is based on independent research commissioned by RIC and was completed by more than 500 current customers.
RIC had been completing independent research since 2020 and is able to see customer trends emerging from year to year.
While confidence had dipped since last year’s bumper agriculture year, RIC’s low interest loans are there to help customers through tough financial times.
“Our low-cost loans, low variable interest rate and interest only terms for the first five years have been a lifeline for thousands of farming families in times of drought, natural disasters or other major financial disruptions,” said Mr Howard.
“While there was a slight decline in customer confidence in the future of their farm business this year to 83 per cent compared to 86 per cent last year, we’re still pleased to see RIC customers are largely feeling confident about their outlook despite the challenges.
“It’s good for farmers to know RIC is an option to help make it easier to manage financially when faced with unforeseen severe business disruption.”
Since 1 July 2018 when Australian Government farm business lender RIC was first established, 2,974 loans have been settled valued at over $3.20 billion as at 31 October 2023. Loans of up to $2 million are available for Australian farm businesses over 10 years with the first five years interest only repayments followed by principal and interest for the remaining five years. The farm business loans variable interest rate is currently 4.52 per cent.