RIC loans helping farmers reduce debt and prepare for drought
REDUCING farm business debt and improving drought preparedness are the top ways Australian farmers have used their Regional Investment Corporation loans, according to new independent research released in the RIC Farm Loans Customer Insights Brief 2025.
The top five uses for RIC loans in 2025 also included improving on-farm sustainability, managing during drought, and strengthening financial positions to negotiate better interest rates with commercial banks.
While most RIC loan recipients were focused on managing through significant unforeseen events rather than growth, nearly all reported greater confidence in their future.
RIC chief executive John Howard said this year’s research highlights a strong theme of consolidation, with farmers aiming to reduce debt and navigate financial volatility caused by extreme weather, rising operating costs and capital expenditure pressures.
“The customers who responded to our independent survey said they’re using their loans to pay down their debt, be better drought prepared, improve sustainability or manage through the drought they’re currently in,” he said.
“Last financial year, new RIC loan customers experienced an average 2.26 per cent discount on their interest rate compared to their commercial loan — saving more than $20,000 each year in interest payments on an average $1 million RIC loan.
“That’s money farmers can inject straight back into their businesses.”
RIC customers also advised they are using — or plan to use — their improved financial position, gained through lower interest rates and interest-only payments during the first five years, to implement sustainable practices and better prepare for future disruptions.
Mr Howard said RIC has conducted this research for five years, and the latest results reflect farmers’ focus on strengthening their financial foundations rather than expanding operations.
“Just over half of farmers (55 per cent) agreed their RIC loan enabled business growth.
“However, this is down from 71 per cent last year, most likely due to factors such as drought and other challenging market conditions.”
Encouragingly, 86 per cent of respondents said they feel more confident about the future of their farm or farming small business with a RIC loan.
For more information and to view the RIC Farm Loans Customer Insights Brief 2025, visit ric.gov.au/about/reporting/customer-insights-report.
Regional Investment Corporation is an Australian Government provider of low-interest loans for farm businesses and farm-related small businesses.
