Queensland agriculture minister John McVeigh says he is closer to reaching agreement with new Federal agriculture minister Joel Fitzgibbon on a deal that will free up access for the State’s hard hit farm businesses to $60m in concessional loan assistance.

It has been almost three months since the Federal Government announced its $420 million national farm finance package, which makes concessional loans of up to $650,000 available to farm businesses in each state and the Northern Territory that can demonstrate both financial need and capacity to repay the loans.

While the federal Government is funding the assistance, State and territory-level Governments are responsible for the roll-out of the package in their jurisdiction.

The availability of loans is therefore contingent upon the Federal Government and its state counterparts reaching agreement upon how loans should be delivered.

The Government of Queensland, where more than 40pc of the state is now drought declared, has been publicly wrangling with the federal government over the issue since the loans were announced in late April. 

In a press release issued on Friday, Queensland agriculture minister John McVeigh accused former federal counterpart Joe Ludwig of withholding important paperwork needed by Queensland to make decisions on delivery arrangements.

However, he said discussions with new agriculture minister Joel Fitzgibbon were proving far more fruitful.

“I welcome the determination from Mr Fitzgibbon that he is ready to sign a deal with Queensland and allow the funds to start moving,” Mr McVeigh said.

“It finally looks like we are going to get somewhere and Canberra will finally provide the relevant paperwork so Queensland can actually sign-up to a deal.”

Mr McVeigh said the $60m package for Queensland ($30 million per year over two years) was  exactly the same as that being offered to Tasmania and South Australia.

His department had estimated that the funding available will allow only 150 Queensland farm businesses to access low cost loans, which are being offered at 4.5pc interest.

“Queensland, with the nation’s largest beef herd and more than a third of the state suffering drought, really deserves a bit more than Tasmania, but I’m more than ready to sign-up if Mr Fitzgibbon is true to his word that he wants this sorted out before the (Federal) election,” he said.

He said the Queensland Government had acted months ago to assist drought-affected graziers, through an $11.2m package H Heof support for producers in drought declared shires.

The measures included land rent relief, freight subsidies on fodder and water cartage, and $20,000 grants to drought declared producers to invest in water infrastructure for stock.

Federal Government still working with states

Asked how many state and territory governments have now signed up to the package, a spokesperson from the Federal Department of Agriculture told Beef Central on Friday that work was continuing with each Government to tailor the concessional loans for the individual requirements of their farming sectors..

“The types of loans available, including the term of loans, loan amounts and whether for debt restructuring or productivity enhancements, may differ between states and the Northern Territory as the program will be tailored to meet the needs of each jurisdiction,” the spokesperson said.

“Senior DAFF officials have been to every state capital and to the Northern Territory in recent weeks to discuss the details of concessional loans delivery in that jurisdiction. Following discussions in Queensland last week, senior DAFF officials have been in Western Australia this week to further progress these discussions.”

Cost to people's lives 'sickening'

Bob Katter, the Federal member for the north western Queensland seat of Kennedy, which contains some of the most severely drought affected country in Queensland, helped to organise a rural finance summit with treasurer Wayne Swan in Brisbane last year that ultimately led to the Farm Finance package.

He said that in the nine weeks that the State and Federal Governments have argued over the delivery of Farm Finance assistance loans, thousands of cattle have died and families had been ripped off the land.

“Whilst we’re into our third month of what can only be described as playing politics, the cost to people’s lives has been sickening.

“We thank the Federal Government for the $60m but we say with aggression that really, some $300m would be needed to address this situation.”

He said he was also bitterly disappointed that both governments have not moved to a reconstruction board approach, as advocated by Rural Finance Working Group chair Rowell Walton at last year's debt summit in Brisbane. “The reconstruction board approach would, over two years, provide $200m at 2 per cent interest, and a $2m subsidy for two years.”

Queensland agriculture minister John McVeigh accused Mr Katter of carping from the sidelines and using the issue to "raise his own profile".

Is Govt trying to profit from farmers?

Meanwhile the Victorian Farmers Federation has accused the Federal Government of trying to profit from farmers’ misery by requiring farmers to pay a higher interest rate for loans than the level at which the finance was secured. .

VFF president Peter Tuohey said Federal Treasurer Wayne Swan was borrowing the money at close to 3 per cent but lending it to hard hit farmers at 4.5 per cent interest.

“That’s a 1.5 per cent margin, delivering the Federal Government a $6.3 million a year profit,” Mr Tuohey said.

“Traditionally, the Federal Government has passed the margin across to state and territory governments to administer the concessional loans schemes, via state-owned Rural Finance Corporations.

“But for the first time we’re seeing the Federal Government hoarding the margin and attempting to force the states and territories to cover the administrative cost of the loans.

“The end result is a deadlock, with the states quite rightly refusing to accept the cost of administering the concessional loans. It would set a new and grossly unfair precedent that all future federal governments would be tempted to follow.”

The VFF said it wants the Federal Government to pay the administrative costs of the loans and free up much needed assistance for hundreds of farmers across the nation.