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Farmers are in debt, and more debt won’t help

Garnett, A.M. (2014) Farmers are in debt, and more debt won’t help. The Conversation, 6 February 2014 .

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Farm debt in Australia has increased by almost 75% over the past decade, from A$40.3 billion in 2004 to an estimated A$70 billion in 2014. Barnaby Joyce, the Federal Minister for Agriculture, has argued the government should take on $7 billion of the riskiest proportion of this debt.

The suggestion by Joyce is that a government Rural Reconstruction and Development Bank be established to buy up bad loans, making the government joint owner of some farm businesses until the loans are repaid.

The federal budget is in deficit by A$47 billion dollars, total net debt is approaching A$200 billion and interest repayments will soon exceed A$10 billion per year. It will be a hard sell to convince the government to take on $7 billion of risky debt, and Treasurer Joe Hockey has already poured cold water on the idea, arguing “there are swings and roundabouts in agriculture all the time”.

Publication Type: Non-refereed Article
Murdoch Affiliation: School of Management and Governance
Publisher: The Conversation Media Group
Copyright: The Author
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