Rural Debt Crisis Demands Government Action

[icyfroth]

Barnaby Joyce’s empty threat to the banks over farm foreclosures, and his pathetic offer of $100 million roll-over loans to farmers, will not solve the rural debt crisis. Neither will ANZ’s announcement of a 12 month freeze on foreclosures—the crisis is too big.

Unless the government takes real action, the debt crisis will trigger mass foreclosures of family farms and leave only corporate agribusinesses involved in Australian agriculture.

A paper by economist Ben Rees presented to the 2012 Rural debt Roundtable entitled Rural Australia: Crisis 2012, illustrates the essence of the crisis with a graph showing the relative growth of total Rural Debt and total Net Value Farm Production (NVFP) since 1969.

Click here to view the graph.

The government must use its power to issue credit to refinance the rural debt that is legitimate, while the balance should be written off. In many cases, farmers have copped not just above average interest rates, but usurious penalty rates as high as 20 per cent on top, which has made their debt burden impossible. Consequently they have often repaid more than they borrowed, but are still under crushing debt. In those cases the debt should be written off.

Otherwise, the government can immediately announce it will guarantee debt refinancing, just as it di..., so that farmers can borrow at the government bond rate of 2-3 per cent. Through legislation, the government could either convert the Reserve Bank into a national bank, or establish an entirely new National Bank, and direct it to issue long-term low-interest credit for agriculture.

The volume of credit required is in the tens of billions of dollars, not the token $400 million that the Gillard government offered in low-interest loans, or the even more pathetic $100 million that Barnaby Joyce announced this week.

http://cecaust.com.au/releases/2014_12_12_Rural_Debt_Crisis.html

[icyfroth]

[gleee58]

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@icyfroth wrote:

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Bluddy disgusting is what that is. No person does anything to earn that type of money. 

[village_person]

It's all about priorities.

Discussion of evidence:  The Australian government allocated $5.7 billion to foreign aid in the latest budget.

http://www.factsfightback.org.au/365/

If you owned a property in the bush somewhere you'd get more attention from our gov't if you renamed your property to "Welcome to Africa" or something like that.

It's all about priorities.

[cherry*135]

It's all about the following

Barnaby Joyce’s empty threat to the banks over farm foreclosures, and his pathetic offer of $100 million roll-over loans to farmers, will not solve the rural debt crisis. Neither will ANZ’s announcement of a 12 month freeze on foreclosures—the crisis is too big.

Unless the government takes real action, the debt crisis will trigger mass foreclosures of family farms and leave only corporate agribusinesses involved in Australian agriculture.

It's all about the above. Note that Barnaby Joyce is the Minister for Agriculture in the Abbott Ministry.