Editorial: Sensible move
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
A survey from Federated Farmers has revealed that only 6.6% of dairy farmers say they have come under undue pressure from banks over their mortgage. Just 5.7% are dissatisfied with banks over their mortgages and as little as 3.1%, are unhappy about the quality of communication from banks over the past three months.
Across all farming industries the level of dissatisfaction over mortgages is even less (5.2%), with 5.5% saying they have come under undue pressure in this area and 3.5% unhappy with how banks are communicating with them.
The survey was conducted the week following Fonterra’s announcement on 7 August of a forecast payout to farmers of $3.85/kgMS. Federated Farmers president William Rolleston says the organisation took the step because it was vital the industry knew exactly what level of support it was receiving.
“The support of banks is absolutely critical in these market conditions. They have the ability to make a significant difference to farmers, the industry and the economy if they work constructively and take a long term view,” says Rolleston.
“The high levels of satisfaction our survey has identified are extremely encouraging for the dairy industry, but at the same time it’s concerning that some farmers are coming under pressure from banks. We are following this up and continue to urge banks to stand by the industry. A repeat of this survey in November will tell us whether they have.”
The Federated Farmers survey also found that 25% of dairy farmers do not have a detailed budget for the current season. This compares with 33% of all farmers.
“More than 10% do not have a mortgage and many more have very low levels of debt so this is not entirely surprising, however we remind farmers that, particularly in difficult market conditions, it is important to review your budgets and obtain expert advice from your bank, accountant and farm advisor,” says Rolleston.
New Zealand Bankers’ Association chief executive Kirk Hope says it is helpful to have the survey by Federated Farmers confirm that banks are working closely with dairy farmers to help them manage through tough times.
“There’s a range of measures available across the banking sector, and banks will continue to provide assistance according to the particular circumstances involved.”
“Two-way communication in times of financial stress is essential, and the survey overwhelmingly shows that’s happening on the ground. This helps farmers facing challenges to act early and have a plan and a budget in place, which is what’s needed to get through,” says Hope.
The Federated Farmers Banking Survey was completed by 1,300 farmers from around New Zealand (over half of them in the dairy industry).
