Farm Management Deposit improvements now effective

Sheep Central, July 4, 2016

Improvements to the Farm Management Deposits (FMD) scheme took effect last Friday, July 1, 2016.

The changes give farmers more flexibility in managing their finances, especially during periods of hardship, such as drought, according to Federal Agriculture Minister Barnaby Joyce.

The changes strengthen the FMD scheme, managed by the Department of Agriculture and Water Resources, the Treasury and the Australian Taxation Office. The scheme aims to assist farmers to better manage fluctuations in cash-flow and provides a way for farmers to set aside pre-tax income during good years, which they can later draw on to help them manage through lean years.

From today, a range of improvements to FMDs take effect, making them an even more effective tool for farmers in managing their businesses.

Early access provisions have been re-established for farmers affected by drought, who will now be able to withdraw their FMDs early without losing the tax concessions they have claimed.

Farmers considering this option can use the online tool on the Bureau of Meteorology website to help them assess their eligibility.

Farmers will now be able to set aside twice as much in their FMDs, with the deposit limit doubling from $400,000 to $800,000.

The restriction on FMDs being used as loan offsets has been removed—meaning farmers will now be able to put this money to work to help them pay off their farm business loans quicker.

Rural Bank has already announced it will offer farmers the option of using their FMD to offset their farm loan interest and it is expected that other financial institutions will follow suit. Farmers are encouraged to contact their bank to find out whether they’ll be offering this option.

Source: Minister for Agriculture: For more information visit To access the online tool for assessing eligibility for early access to FMD funds during drought, visit


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