As part of Farm Finance, the non-primary production income threshold under the Farm Management Deposits (FMD) Scheme has been increased from $65 000 to $100 000 and existing eligible FMD accounts are able to be consolidated.
FMDs are an important risk management tool to manage fluctuations in income. Increasing the non-primary production income threshold will allow more primary producers to access the FMD Scheme to prepare for and manage future risk. It will also provide farmers with greater flexibility in managing their finances, while still retaining access to this risk management tool. Consolidating existing eligible FMD accounts will reduce the administrative burden on farmers, financial advisors and financial institutions.
What is the non-primary production income threshold?
To be eligible to make a deposit in an FMD Scheme account, an individual’s income generated from non-primary production activities must be below a certain amount. This threshold has been increased to $100 000 as part of Farm Finance.
What income is classed as primary production income?
Primary production income is any income derived from primary production activities, which includes:
- cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment; or
- maintaining animals for the purpose of selling them or their bodily produce (including natural increase); or
- manufacturing dairy produce from raw material that you produced; or
- conducting operations relating directly to taking or catching fish, turtles, dugong, bêche–de–mer, crustaceans or aquatic molluscs; or
- conducting operations relating directly to taking or culturing pearls or pearl shell; or
- planting or tending trees in a plantation or forest that are intended to be felled; or
- felling trees in a plantation or forest; or
- transporting trees, or parts of trees, that you felled in a plantation or forest to the place:
- where they are first to be milled or processed; or
- from which they are to be transported to the place where they are first to be milled or processed.
How does increasing the non-primary production threshold help primary producers?
Increasing the non-primary production income threshold from $65 000 to $100 000 allows more primary producers to manage risk through diversifying their income.
How does consolidating existing FMD accounts help primary producers?
Consolidating existing FMD accounts that have been held for 12 months or more reduces the administrative burden on farmers, financial advisors and financial institutions.