The federal government wants to help more people enter the rural real estate market by guaranteeing 40% of their loan deposits as farm values ​​soar.

Agriculture Minister David Littleproud said a re-elected coalition government would act as guarantor for 40% (up to $1 million) of a commercial loan.

The $75 million Future Farmers Guarantee program would be tested over 18 months and is designed to attract more young farmers to the sector.

“Current owners are aging [and] the average farmer is 62 years old, and only 10% are under 47,” Mr Littleproud said.

The rural property market has become very active, with some farms doubling or even tripling in value and becoming inaccessible to new buyers.

Land prices have been pushed up by historically low interest rates, record commodity prices and exceptional seasonal conditions.

David Littleproud says applicants should meet criteria, including being an attractive loan prospect to banks.(ABC News: Che Chorley)

“Government sharing the risk means the bank can offer better terms to suitable applicants, lower interest rates and lower capital requirements,” Mr Littleproud added.

But he warned the scheme was “not free for all” and applicants would need to demonstrate “on-the-farm experience”, have a minimum deposit and be an attractive loan prospect for banks.

The program would open from January 1, 2023 and would be administered by the government’s Regional Investment Company.

Loans would be available for a maximum of 10 years, with the maximum loan-to-value ratio capped at 70%.

David Littleproud and Julie Collins
Agriculture Minister David Littleproud and Labor Agriculture Spokesperson Julie Collins.(ABC News)

Mr Littleproud planned to announce the program at the National Rural Press Club’s farm leaders’ debate in Canberra today as he faced opposition agriculture spokeswoman Julie Collins.

Ms Collins did not yet detail Labour’s agricultural policies, but said Labour’s policies on climate change, regional housing and telecommunications would help the rural sector.

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