Australian Dairy Farmers (ADF) has welcomed the Federal Government’s announcement of a new Drought Hardship Loan through the Regional Investment Corporation (RIC) as dairy farmers stare down the prospect of another difficult season.
ADF has strongly advocated for changes to the loan scheme over the past 18 months, with dairy farmers having already battled consecutive dry years.
Under the new loan, eligible farmers will be able to borrow up to $250,000 over five years, with interest incurred by repayments fully deferred for the first two years.
The loan is designed to help with short-term operating costs during prolonged droughts, when cash flow strain is most acute and traditional lending is often less flexible.
ADF President Ben Bennett said the announcement reflected the Government’s willingness to act on the concerns repeatedly raised by dairy farmers.
“This is a positive step and a direct result of the strong, consistent advocacy ADF has led throughout 2024 and 2025,” Mr Bennett said.
“Dairy farmers have endured rising costs, water shortages, and some of the harshest seasonal conditions in years.
“ADF has been the strongest voice – publicly and privately – calling for a hardship product that genuinely reflects the realities on dairy farms. This announcement shows that work has paid off and those calls have been heard.”
The government has also released its long-awaited response to the Craik Review of the Regional Investment Corporation (RIC). Of the 32 recommendations made, 21 were agreed in full, including improved collaboration with commercial lenders, and five-yearly reviews of maximum loan amounts.
ADF has long argued that RIC must be easier to access, better targeted to industry needs, and more responsive during severe drought. While the new hardship loan is welcome, Mr Bennett said the job was not yet finished.
“The structure of this new loan is a good start, particularly the deferred repayments,” Mr Bennett said.
“But dairy farmers still face significant red tape in the application process. Many tell us it can take months to navigate the paperwork, and coordination with their own bank is often slow and complex. That needs to change.
“Farmers are looking for genuine relief, not products that simply mimic the commercial market.
“If RIC is to be a meaningful tool in future droughts, it must offer terms that clearly outperform what is already available from banks—especially when multi-year drought has wiped out reserves.”
ADF has advocated throughout 2024/25 for:
- A dedicated drought operating loan, with deferred repayments (now delivered)
- Simplified application processes to cut administrative burden
- Better alignment between RIC and commercial lenders to avoid duplicated assessment, delays and inconsistent loan security requirements
- Clearer, farmer-friendly communication about eligibility, timelines and expectations
Mr Bennett said ADF would continue its work to ensure the final design of the new product delivers real value for dairy farmers.
“This announcement is a win for dairy farmers and shows the Government is responding to our concerns,” he said. “We now want to build on this momentum. The next step is making the system faster, simpler and more coordinated so that when farmers are doing it toughest, the support arrives quickly and with minimal stress.”