AgForce Queensland treasurer Charles Burke says the rate reduction is the third in as many months and takes the official interest rate to 5.25pc, its lowest since May 2006.

“Providing the interest rate cut is passed on by rural lenders, it will improve business confidence and provide room to move in reducing debt or redirecting interest savings towards on-farm development projects,” Mr Burke says.

“For those carrying significant debt from expansions to provide economies of scale, or as a result of drought, the downward trend in interest rates will provide relief.

“It will also help ensure lenders can continue to gain access to money as part of their strong link in a sustainable and viable agricultural industry.

“It must be business as usual in the bush, even in the face of ongoing global financial turmoil.

"We can’t do that without finance being available for equipment and reinvestment.

“But we urge banks and lenders to pass on this interest rate cut in a timely manner because there is no justification not to do so.

“We congratulate the Reserve Bank on its decisive action in demonstrating it is in-tune with what is required to keep Australia’s economy on track.”