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Australian farmers invest $630 million in Farm Management Deposits.



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HON WARREN TRUSS MP MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY

AFFA01/160WT 18 June 2001

Australian farmers invest $630 million in Farm Management Deposits

Federal Agriculture, Fisheries and Forestry Minister Warren Truss said today Australian farmers have invested more than $630 million in the Federal Government's Farm Management Deposits Scheme.

Mr Truss said that the number of farmers holding Farm Management Deposits increased by more than 60 per cent in year 2000, to 15,721 deposits.

"This strong level of investment is a strong vote of confidence in the Coalition Government's new Farm Management Deposits scheme introduced as a part of the Advancing Australian Agriculture (AAA) package," Mr Truss said.

"The scheme allows authorised financial institutions such as banks, credit unions and building societies to offer Farm Management Deposits to primary producers at market rates interest. The deposits also attract tax benefits if investments are held for more than 12 months."

Mr Truss said the rate of investments until the end of year 2000, reflects strong approval of Farm Management Deposits as a cash flow and risk management tool.

"Primary producers operate in a relatively high-risk environment, but by embracing Farm Management Deposits they are able to manage that risk by balancing their income over good and bad years," Mr Truss said.

"Farmers want more certainty in running their businesses. Farm Management Deposits are a tool that allows them to achieve better control of their cash flow. Farm Management Deposits are easily accessible and simple to use and producers clearly appreciate this."

Mr Truss said Farm Management Deposits:

must be held by a single financial institution; and ● can only be opened in an individual primary producer's name, who does not have an off-farm income of more than $50,000 when the deposit is made; ●

only primary production income can be invested in Farm Management Deposits, and a minimum deposit of $1,000 is required; and ●

an individual's total Farm Management Deposits holdings cannot exceed $300,000 at any time in any period of income. ●

If you would like more information on the Federal Government's AAA Farm Management Deposits scheme, please call 1800 686 175 toll free or visit the web site at: www.affa.gov.au/fmds. A table showing the value of Farm Management Deposits in each State and Territory since June 1999 is provided below.

Value of Farm Management Deposits

 

DATE

NSW

($000)

VIC

($000)

QLD

($000)

SA

($000)

WA

($000)

TAS

($000)

NT & ACT

($000)

Total Value of FMDs ($000)

*30 Jun 99 47,595 40,237 54,477 53,278 30,161 2,089 810 228,647

*30 Sep 99 66,098 51,627 79,558 71,270 38,439 3,280 1,949 312,221

*31 Dec 99 88,866 67,305 92,334 81,396 46,774 3,953 2,408 383,036

31 Mar 00 101,978 75,378 138,960 83,387 47,510 4,615 2,539 454,367

30 Jun 00 143,265 99,922 183,668 89,522 64,703 6,431 2,865 590,376

30 Sep 00 143,560 99,249 179,297 89,667 63,759 7,062 2,664 585,258

30 Dec 00 158,000 111,800 185,000 95,000 67,000 7,200 6,200 630,200

*Statistics for the period from April 1999 to 31 December 1999 include both transfers from the former Income Equalisation Deposit and Farm Management Bonds schemes and new account holders.

From April 1999 to 31 December 1999, IED and FMB deposit holders were given the option of either redeeming their holdings or rolling them over into the Farm Management Deposits scheme.

It was estimated that, during this period, approximately 80 per cent of IED and FMB deposit holders transferred their holdings to the Farm Management Deposits scheme.

 

Minister's office: Yvonne Best (02) 6277 7520 or 0418 415 772

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Last updated 18 June 2001

URL: http://www.affa.gov.au/ministers/truss/releases/00/0160wt.html Commonwealth of Australia 2001