RADIO INTERVIEW TRANSCRIPT
FARMX, LONGFORD TASMANIA
ABC NORTHERN TASMANIA LAUNCESTON BREAKFAST PROGRAM
ADAM GREENHILL, RIC CUSTOMER: Yeah, we're a mixed farming enterprise on the East Coast. We have been mainly sheep with a bit of seed cropping and cereal cropping. We've recently diversified into vineyards to share the risk a bit.
KIM NAPIER, ABC REPORTER: Let's go back a few years ago. What kind of position was your business in?
GREENHILL: 2018 and 2019 were very tight. We were drought-lotting all our ewes, we'd moved our wethers and we had all of our lambs adjusted on 2 other farms. So, it was very tight. That's when we first heard about the RIC finance option and went from there.
DREW CARTER, RIC CUSTOMER: I'm Drew Carter from Ringarooma. We're dairy farmers, we milk 2,000 cows in the northeast. And the effect that the drought had on us in respect to the RIC loan was that our cost of production through grain, which is a pretty strong part of our business, went up significantly for the couple of years leading up to our loan. We'd just invested in a farm next door and invested in irrigation as well. And it was just a way of helping us through that time after significant cash flow effects of high inputs on our business.
NAPIER: What effect did that have for you, getting that interest, that RIC loan?
CARTER: Well, it was purely giving us a bit of breathing space in our business after going through a growth phase. It enabled us to invest cash flow elsewhere into our business so that we could keep moving forward in the direction that we always wanted to go prior to having a huge increase into our costs through higher grain prices.
JOHN HOWARD, RIC CEO: I'm John Howard from Regional Investment Corporation.
NAPIER: For the average audience member who might be listening, who's not necessarily a farmer, what is a RIC loan?
HOWARD: So, we're a federal government entity that's there to do a concessional loan product to firstly help manage through drought or natural disaster events with a lower interest rate. So, currently at the moment, we're at 5.18 per cent. And the whole aim of that is helping people through examples of what Adam and Drew have actually touched on today: help people get back on their feet, but also it's a 10-year loan. Of that, 5 years is interest only before a principal and interest stage. But given the length of that loan and the concessionality of the interest rate, it's not just managing through those initial years of where they're being impacted, but helping to get back on their feet, but also invest back into their operations. Because unfortunately, in Australia there will be another drought or event that will come through that will have a significant impact, and therefore whatever we can do to help people set up and prepare for that after they've recovered through the initial one when they've got our loan is what we're about.
NAPIER: Adam, what did getting this loan help you achieve or what did it do for you?
GREENHILL: Yeah, we were on the cusp of building another vineyard. We were trying to diversify our farm, share the risk a bit, and we were at the stage of moving forward or stopping, and finance and time were really hurting during the drought, so it gave us the incentive to move on. And we planted another 17 hectares of vines and put in 100 megalitres of water. The loan has really covered us right through to when the first grapes were picked. So, we weren't financing a new venture - RIC were financing it for us, which was fantastic. We're now up and running and can afford the debt we have.
NAPIER: You said before there will be another drought, there will be another flood, there'll be something. Is there just a risk that people are going to have to keep borrowing and borrowing and borrowing?
HOWARD: I think there's a recognition in farm businesses of, that is going to be pending. So, what we're seeing, and one of the requirements, people actually build rigour into their businesses now so that it doesn't become, or debt doesn't become, a noose around their neck.
NAPIER: Where do your businesses sit now? What's happening at the moment? What have you been able to do?
CARTER: We're pretty much in a consolidation phase at the moment. The RIC loan has enabled us to just basically get to a point where we can maintain the status quo and carry on business as usual.
GREENHILL: Yeah, look, first of all, it encouraged us to go ahead with the developments we were doing. We've finished developing that vineyard and it's online and looking after itself. And we've gone on to do other water developments. We've come out of that drought well, and it really was the injection we needed when things were at a low.
ENDS