The three f's - namely fuel, fertiliser and feed prices - led the pack in double digit on-farm cost increases over the last year.
The term loan, a SLL available to all farmers no matter the size of their farm or industry, offers interest cost savings for achieving environmental and social targets including: Greenhouse gas reductions; eco-system protection; improved care for staff; protecting waterways; improving biodiversity; and animal welfare.
It is the first time a SLL has been available as a loan product to all New Zealand farmers. Environmental and Social targets are set and agreed with BNZ and progress independently verified annually.
“New Zealand’s farmers are working hard to achieve environmental and social goals and we want to support and incentivise their efforts,” says Dana Muir, BNZ head of natural capital.
Muir says this is the first time lending that rewards both environmental and social ambition has been available to all New Zealand farmers.
“Reduced loan costs incentivise farmers to go harder and faster on environmental and social improvements while independent audits ensure the work is meaningful and contributes to a better future for New Zealand,” she says.
BNZ’s Agri SLL Product was developed off the back of individual SLLs with large primary sector customers. It is designed to be complementary to work underway across leading assurance programmes in the primary sector that also incentivise improved environmental and social outcomes on-farm.
Unlike previous versions which have supported farmers with one off environmental projects, an SLL can be used for any purpose on a farm. It is designed to work like regular term debt with cost savings only realised when environmental and social targets are achieved.
“Farmers can choose from a range of environmental and social measures which they want to tackle, but emissions reduction is a non-negotiable. It is crucial we reduce greenhouse gas emissions and the structure of our SLL reflects that,” says Muir.