DARLING DOWNS grain grower Scott Moore has welcomed changes to Farm Management Deposits (FMDs) outlined in the white paper, but says they haven’t gone far enough to benefit his business.
Mr Moore and his wife Kirra purchased a 550ha farming and grazing block outside Macalister in 2010 and run a contract spraying business to help pay off the property.
Mr Moore said he would like to access FMDs but was excluded because his off-farm income exceeded the $100,000 limit.
“For an established farming family where farming is their only income then the changes are all well and good but for others like us, who are trying to enter the industry, there is no way a young couple can buy a farm without off-farm income, and that’s going to rule us out of using FMDs,” he said.
“The spray contracting business that I operate precludes me from utilising FMDs but it comes with the same drought risk and income fluctuations as any farm.
“I would like to see the off-farm income limit increased dramatically or abolished for those primary producers who fall into the category of small business.
“I think any income that is derived from a direct service to a primary producer like contract planting, spraying and harvesting should be exempt from the off-farm income limit.
“There are also a lot of rural businesses out there that do it really tough during the drought and they don’t get any kind of drought assistance.
“They should be able to receive at least five-year income tax averaging that all primary producers are entitled to.”
Under the changes announced in the white paper, producers will be able to double their FMDs to $800,000 from July 1, 2016. They can also use FMDs as a loan offset to reduce interest costs on commercial loans and won’t lose their tax concessions if they withdraw money from their FMD during a drought. Mr Moore said being able to use FMDs to offset interest was a major breakthrough.
“That’s a fantastic idea because the thought of putting money away in an FMD when you were still paying interest on another amount didn’t really make sense,” he said.
When he’s not busy with his spray rig off-farm, Mr Moore is tending to his own cultivation at Cable Hole, Macalister.
He currently has 40ha of Suntop wheat, 80ha of Oxford and Sheppard barley and 200ha of Hattrick chickpeas planted.
“Everything is looking pretty good at the moment,” he said.
“We had really good stored moisture under them when we started and if we could get a 20 to 25mm rainfall event then we would be assured of a 2.5t/ha crop, which would be great.”