Rhymes with?
OPINION: The Feds' latest banking survey shows that bankers are even less popular with farmers than they used to be, despite falling interest rates, and the report still paints a damning picture of rural lending.
Farmers' relationships with their banks are “absolutely” having an impact on their mental health.
That’s according to Federated Farmers domestic commerce and competition spokesperson Richard McIntyre.
McIntyre says that 42.3% of respondents to the Federated Farmers Banking Survey said they felt their mental health and wellbeing were impacted by banking issues.
“That’s nearly half of farmers feeling as if their mental health is suffering as a result of their relationships with banks,” he told Rural News.
“The struggle is real, and this is a huge issue for farmers.”
He says a significant issue is that farmers do not receive enough support from their banks.
According to the banking survey, one in five farmers felt their banks were doing enough to support them during periods of high interest rates.
“In addition, the number of farmers feeling undue pressure from their banks has gone from one in 20 farmers in 2015, to one in four farmers today,” McIntyre adds.
“The pressure farmers are facing from their banks is real and is rapidly becoming the number one issue facing farmers today.”
He says that farmers have accepted that margins on their loans are “a bit higher” than home loans, as there is more risk associated with running a business.
“However, we think this margin is higher than it used to be, and higher than it needs to be,” McIntyre says. “The difference seems to be getting larger.
“The core issue is that banks seem to be pricing for risk, but not actually taking it,” he explains.
“In many cases we’ve seen millions of dollars in equity that should cover the risk of the loan completely, but banks still charging high interest rates.”
McIntyre’s comments come after a Primary Production Select Committee hearing late last month which saw committee members ask for their perspective on the issue of rural bank lending.
ANZ managing director business and agri Lorraine Mapu told the committee that there has been “a lot of discussion” surrounding the cost of borrowing for farmers.
“Interest rates for agri customers are influenced by economic conditions, regulatory settings, and monetary policy,” Mapu says.
She says the higher interest rates farmers have experienced in the past two years are largely due to a combination of the Official Cash Rate (OCR), wholesale rates, and funding costs.
“So, the increase in the amount of capital banks must hold against the lending also has an impact. Risks around the sector impact the amount of capital banks must hold against the lending and therefore the interest they charge.”
Mapu says these risks include volatility in the export market, farmgate prices and inflation.
She says ANZ remains “committed” to supporting farmers.
Ham has edged out lamb to become Kiwis’ top choice for their Christmas tables this year.
Dairy Women’s Network (DWN) has announced real estate company Bayleys will be the naming partner for its 2025 conference.
As New Zealand enters the summer months, rural insurer FMG is reminding farmers and growers to take extra care with a new campaign.
Hato Hone St John is urging Kiwis to have a safe summer this year.
Hawke’s Bay’s Silt Recovery Taskforce has received the Collaboration Excellence Award at the Association of Local Government Information Management (ALGIM) Awards.
Construction is underway at Fonterra’s new UHT cream plant at Edendale, Southland following a groundbreaking ceremony recently.
OPINION: It could be cod on your cornflakes and sardines in your smoothie if food innovators in Indonesia have their…
OPINION: A new study, published recently in Proceedings of the National Academy of Sciences, adds to some existing evidence about…