Drought Ready and Resilient Fund Loan

The program is offered to eligible primary production enterprises for eligible activities that support the primary production enterprise to implement their Farm Business Resilience Plan (or equivalent), as detailed in the program guidelines (PDF 763.49KB).

An eligible primary production enterprise:

• is a sole trader, partnership, trust or private company in NSW where the work is to be carried out
• has an Australian Business Number (ABN) and declares itself for tax purposes in Australia as a primary producer
• is not a public company under the meaning of the Corporations Act 2001 (Cth)
• at least one owner (sole trader, partner, shareholder or beneficiary) contributes part of their labour to the enterprise
• in at least 1 of the last 3 financial years has generated annual gross income (the total income earnt before any tax deductions) from eligible primary production income of at least:
  • $75,000 and no more than $5 million in total gross income
  • or 50% of its gross income is from eligible primary production income.

Note: Eligible primary production income:

• includes income from the ANZSIC Codes for Agriculture, Forestry and Fishing
• includes income from value-added products (e.g. wine) made directly from raw produce grown by the enterprise
• includes gross income from carbon abatement projects deemed eligible primary production gross income by the Australian Tax Office
• excludes gross income from activities that involve animals that are not bred for farm work, food or fibre; hunting and trapping activities; or agriculture, forestry and fishing support services.

Where eligible primary production income is less than $75,000 or 50% of total gross income, the applicant can demonstrate that in the ordinary course of business they would meet that requirement, but:

• their primary production gross income is currently reduced due to seasonal conditions or biosecurity events
• due to long lead times to full production, in the opinion of the RAA they will earn such an amount of gross eligible primary production income within a reasonable period (taking into account the nature of the industry).

Bona fide primary production enterprises may be considered eligible by the RAA, if the business:

• has a significant commercial purpose or character
• has more than a mere intention to engage in primary production
• has an intention to make a profit or a genuine belief that a profit will be made
• has repetition and regularity in the activity
• is the same kind and carried on in a similar way to that of similar primary production enterprises
• is organised in a business-like manner.

Applicants must have a farm business resilience plan (or equivalent), deemed suitable by the RAA.

Applicants must provide the RAA with satisfactory security in accordance with the security requirements in the program guidelines (PDF 763.49KB).

Applicants must demonstrate that the business has long-term viability and has the capacity to repay the loan sought (this will include an assessment of related directors and owners).

Activities that commenced (ordered, purchased or installed) on or after Saturday 1 July 2023.

The DRRF loan can be used to fund a broad range of purchases, activities and services as listed below:

Animal Welfare:

• purchasing and transporting fodder up to a maximum value of $100,000
• purchasing and transporting stock and domestic water
• purchasing livestock feed storage, mixing and feeding equipment
• transporting stock to sale or agistment
• veterinary/professional nutrition or animal welfare advice
• genetic banking where destocking of stock is demonstrated
• fencing for rotational grazing, exclusion and cluster fencing, construction of containment feeding pens, stock shade structures
• planting of trees.

Farm Preparedness:

• on-farm water infrastructure (tanks, stock water systems, pumps, new dam construction, drilling bores, irrigation efficiency upgrades, water conservation infrastructure)
• on-farm grain and fodder storage infrastructure (silos, grain bunkers, hay sheds, silage pits)
• livestock feeding equipment
• infrastructure repairs/maintenance (dams, channels, fencing)
• upgrades and additions to planting machinery (moisture seeking points and minimum til conversions).

Income diversification:

• income diversification funding to promote and finance diversified income streams within the farm gate
• funding to promote and finance alternative primary production income streams within the farm gate.

Environmental:

• pest and weed control
• on-farm solar power conversion to mitigate the impacts of drought
• soil conservation and earthworks (including erosion control, contour banks, overbanks (keyline), water ponding and the management of vegetation and maintaining groundcover)
• soil biology, or compost making equipment.

Training and Business Development:

• training and professional development activities that improve business resilience to drought
• professional consulting services directly related to drought preparedness, for example, animal nutrition consultation and planning.

Activities that cannot be supported by a DRRF loan include:

• activities that commenced (ordered, purchased or installed) prior to 1 July 2023
• activities that do not support the primary production enterprise to implement its farm business resilience plan (or equivalent)
• all residential farm premises/buildings and/or improvements to the residential farm premises/buildings
• activities beyond/outside the farm gate
• own labour costs and employee wages
• activities that have been used to secure funding under any other NSW State Government scheme, including funding administered by the RAA (this includes past and future programs).

The DRRF loan can be used to fund the activities that support the primary production enterprise to implement its farm business resilience plan (or equivalent).

The plan should identify who prepared the plan and provide details of any consultation and advice sought (accountant, Rural Financial Counsellor, government advisor, education or professional development)

At a minimum the Farm Business Resilience Plan (or equivalent) must include:

About the business:

• business details – include details of business structure; ownership; management; plant, equipment, and property
• current status/state of business and goals – including state of production and future goals and state of business and future goals.

The future of the business:

• financial plan – include key financial objectives
• Farm Business Resilience Plan (or equivalent) – including:
  • drought impact statement – what impact does drought have on the enterprise
  • strategies to prepare for drought
  • strategies to manage drought including trigger points for actions and how management strategies address enterprise specific risks
  • strategies to recover from drought
  • actions already implemented (if any) to prepare for, manage and recover from drought.

Interest rate:

• interest rates change monthly, apply from the date the loan is first drawn down and are fixed for the term of the loan. Current rates are published on the RAA website
• interest accrues from the first draw down of the loan.

Term:

• the maximum loan term is either five (5) or ten (10) years and is determined by the purpose of the loan and amount borrowed, at the discretion of the RAA
• loan repayments of principal and interest are due as agreed, either monthly, quarterly, biannually or annually and commence when the loan is fully drawn down or 6 months from the signed date of the acceptance of offer letter, whichever comes first.

Security:

• charge and registered caveat over the property on which the proposed activities are to be carried out
• alternative security may also be considered
• if you have an existing mortgage on the property, your mortgagee will need to sign and stamp the mortgagee consent form to support your application
• the charge is specific to the activity being completed and a new charge is required for each approved advance
• funds will not be released until all security requirements have been satisfied and a statutory charge or caveat is registered over the security property.

Fees and charges:

• there are no establishment or account-keeping fees, however, costs for registering security documents and Government Stamp Duty will be borne by the applicant
• as part of the assessment process, the RAA will obtain title searches to confirm ownership of the land offered as security as well as credit and bankruptcy searches. This cost will be borne by the applicant whether or not they take up the loan.

Loan draw down:

• the loan must be fully drawn down within 6 months from the signed date of the acceptance of offer letter
• payments will be made on receipt of valid tax invoice and the RAA (or an agent engaged by the RAA for this purpose) may inspect the works as per above to ensure it is eligible and compliant
• invoices submitted in relation to the application may not be used or have been used to secure funding under any other NSW State Government scheme (this includes past and future programs).