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Funds are now flowing to drought-affected farmers after the South Australian government unveiled state government-funded targeted financing to drought-impacted farmers.
The South Australia Drought Loan Scheme supports drought-affected grain and livestock farmers in South Australia’s Murray Mallee, Riverland, and Upper North regions through access to urgent financial assistance through the provision of low-interest loans.
While the state has received rain recently, producers in some areas continue to face cash flow pressures due to drought.
The scheme, which is being managed by the Department of Primary Industries and Regions (PIRSA), which is working with Queensland Rural and Industry Development Authority (QRIDA), offers loans of up to $250,000 to drought-affected farmers in eligible production areas.
Loan terms are for 10 years and include a two-year repayment holiday.
Funds from the scheme may be used to meet the working capital expenses of the primary production business, such as:
- paying employee wages
- paying creditors
- paying rent and rates
- buying goods, including fuel, for carrying on the business
- direct cropping and livestock expenses.
The scheme has now approved its first four low-interest loans to farmers in regions hardest hit by drought.
Speaking of the first loans being settled, Minister Clare Scriven commented: “The most significant drought loans scheme in South Australian history has reached an important milestone.
“Funds are now flowing directly to drought-affected farming businesses in some of our hardest hit regions, providing much-needed financial assistance at a crucial time for the state’s agricultural sector.
“While some areas have started to see rain in recent months, many producers continue to face challenging seasonal conditions and cash flow pressures.
“The SA Drought Loan Scheme provides breathing room in the form of targeted assistance and helps farmers maintain operations as they recover from the impacts of drought.
“We will continue to monitor conditions closely and work with industry and regional communities to ensure support is reaching the people who need it most.”
The South Australia Drought Loan Scheme provides concessional interest rates that are 50 per cent of the Commonwealth 10-year bond rate in the first two years of each loan term. Over the last eight years of the loan term, the rate is based on the 10-year Commonwealth bond rate.
Over the life of the loan term, interest rates will be lower than the concessional interest rate of 5.18 per cent currently offered under the Australian government’s Regional Investment Corporation loan scheme and lower than commercial interest rates.
The South Australia Drought Loan Scheme is in addition to the Malinauskas government’s $97 million Drought Support Package, which continues to deliver support to drought-affected regions across the state.
Applications for low-interest drought loans are open until 31 December 2026.
[Related: Farmers hungry for investment despite input cost concerns]
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