Corangamite Shire councillor Peter Harkin said while in theory the $555 million federal government package, announced by Agriculture Minister Barnaby Joyce in May, was a good idea, it was now in need of review.

Cr Harkin said loans were available from just one financial institution – Rural Finance – and he called on the system to be changed to allow farmers to access federal assistance loans from their own banks.

“I’m asking the federal government review this system and allow farmers’ banks to have that money put through their own system rather than have one bank and one distributor,” he said.  “That will free up the eligibility and the criteria and give young farmers and all farmers the chance to get access to this money, otherwise it’s not going to be taken up and the ones who really need the loans won’t get them.”

Cr Harkin said he expected take-up of the loans to be low as the eligibility criteria put them out of reach for many farmers.

“If you’ve got low equity, low cashflow, the chances of securing a new loan is difficult, particularly if you’ve got to do it through another bank,” he said. “The farmers’ banks already know their customers so why do these farmers have to go another bank to get these low interest loans from the package?”

Murray Goulburn’s lower-than-expected milk price announcement this week has again put the issue in the spotlight.

“There’s people really, really worried now,” Cr Harkin said. “If they have a major breakdown on their farm… they won’t be able to afford to fix them and these are the problems they’re facing. This money is vital to get to them and they should be able to access it through their own banks.”

The federal dairy support package allows farmers affected by the Murray Goulburn and Fonterra milk price cuts to apply for loans of up to $1 million.