CQ region has largest rural debt across QLD, report reveals
THE Central Highlands and Western Downs region alone makes up about one third of Queensland’s total rural debt.
According to the 2019 Queensland Rural Debt Survey tabled in parliament earlier this month, the total rural debt in Queensland is $19.10 billion, a rise of 10.75 per cent since 2017.
In the survey, rural debt is defined as the total indebtedness of all farmers and rural enterprises throughout Queensland, where the servicing of the rural debt relies primarily on rural generated income.
The full report shows the Western Downs and Central Highlands region represented $6.27 billion or almost 33 per cent of total rural debt in Queensland, followed by the Southern Coastal Curtis to Moreton region at $4.46 billion or 23 per cent and Eastern Darling Downs region at $2.59 billion or 14 per cent.
Although the three highest debt regions also have among the highest number of borrowers compared to other regions, with 4343 borrowers in Western Downs and Central Highlands and 5422 in the Southern Coastal region.
Queensland’s beef industry represented the largest proportion of rural debt in 2019 at $10.67 billion or 56 per cent of total rural debt, followed by the grain industry at $1.28 billion or seven per cent.
These were followed by the grain/grazing industry at $1.20 billion or six per cent and the sugar industry at $1.11 billion or six per cent.
Queensland Rural and Industry Development Authority economist Corrie Feldman said while rural debt had increased, the quality or rating of that debt had remained proportionally the same as the 2017 survey, with a majority (93 per cent) of borrowers and value of rural debt rated viable (‘A’) or long-term viable (‘B+’).
Ms Feldman said the results reflected the resilience of primary producers even in challenging years.
“The increase in overall debt levels reflects the very tough circumstances faced by rural businesses throughout the 2017 to 2019 survey period including the ongoing drought impacting a majority of the state which had the twin effect of eroding farm incomes due to decreased cropping and livestock production and increasing rural debt levels,” she said.
“This impact was further amplified by the North and Far North Queensland Monsoon Trough event in early 2019 which saw losses of over 500,000 head of livestock including core breeding herds, crops and pastures inundated, and topsoil removed.”
Since the survey was conducted in December 2019, Ms Feldman said Queensland and Australian agriculture had recorded a generally improved seasonal outlook, however, at the same time was experiencing more uncertainty due to the coronavirus pandemic.
“The impacts are yet to be fully realised and the effects of it may be seen in the 2021 survey,” she said.
The 2019 Queensland Rural Debt Survey conducted as at 31 December 2019 was undertaken by the Queensland Rural and Industry Development Authority in collaboration with the Queensland Government Statisticians Office and with the support of all major rural lenders and insights from agricultural industry associations.
Ms Feldman said the 2019 Rural Debt Survey provided a comprehensive breakdown of the value, movement and quality of rural debt and the number of borrowers by industry and regions across Queensland.
Click here to see the 2019 RDS overview and full report.