Better Risk Management for Farmers – FMDs

The Australian Government has made improvements to the Farm Management Deposit (FMD) Scheme.





Farm Management Deposit Scheme

The FMD scheme enables primary producers to better manage risk by building up cash reserves in good years which can then be drawn on in a downturn. Income deposited in an FMD Account is tax deductible in the year the deposit is made. The FMD becomes part of the primary producer's taxable income in the year it is withdrawn.

The following changes came into effect on 1 July 2016:

  1. The cap on FMD deposits doubled to $800,000
  2. An early access trigger for primary producers affected by drought was re-introduced
  3. FMDs are now allowed to offset the interest costs on farm business borrowings (subject to banks offering these products).


FMDs are useful for:
  • smoothing fluctuating incomes
  • offering possible tax benefits
  • maximising profits
  • strengthening financial sustainability
  • restocking and replanting when conditions improve
  • building up cash reserves

For more information, visit or Australian Taxation Office Business Tax Enquiries 13 28 66


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