Govt vows to help young farmers buy land by guaranteeing 40pc of loan

Agriculture Minister David Littleproud, who announced the $75-million policy at a live debate against his Labor counterpart Julie Collins, said the scheme would be capped at $1 million, and would give young farmers access to lower interest rates and lower equity requirements.

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Access to capital was the number one barrier to people establishing their own farm business, he said.

"Existing landholders are ageing - the average broadacre farmer is 62 years old, with only 10 per cent aged under 47," Mr Littleproud said.

"Rising land values and the typical 40 to 60 per cent equity deposit required by commercial banks without this Government guarantee mean that getting access to a bank loan to start a viable business is very difficult."

Mr Littleproud said applicants would need at least three years of on-farm experience, a minimum deposit and be a sound lending prospect from the banks to be eligible for the scheme, which would start on January 1, 2023.

Loans will have a maximum term of 10 years, with an option to extend the loan term by two years for applicants who are experiencing significant financial hardship. The maximum loan-to-value ratio will be capped at 70pc.

Ms Collins said many farming families were struggling to break into the market, however she had only just heard the policy and would need to look at the details before declaring whether Labor would support the scheme.

"On the surface of it, my first natural instinct is don't trust a former banker [in Mr Littleproud] on some of these things," Ms Collins said.

"We need to be really careful that what we are not doing here is replicating some of the other financial services that are already being provided by some of our financial institutions in these areas, so we will have a good look at it."