increase font size
Richard McIntyre, Federated Farmers says farmers’ trust in their banks is still fragile.
Farmers are feeling more satisfied with their banks, but the situation remains fragile, says Federated Farmers.
Nearly 700 farmers responded to Federated Farmers' May survey, with 60% of them 'satisfied' or 'very satisfied' with their bank. That's up from 53% in the November 2024 survey but well shy of the 80% peak rating recorded in 2017.
In the survey, 61% of farmers rated their bank's communication as good or very good - the best result since 2020.
Just on 18% of farmers said they were feeling undue bank pressure, down from 24% six months earlier and the lowest rating recorded since 2018.
Federated Farmers banking spokesperson Richard McIntyre says it's good to see things are improving but farmers' trust in their banks is still fragile.
"Where farmers have given positive feedback in the survey, it's usually about their individual managers, not bank policy. When those individual staff leave, that trust can erode quickly," he says.
"It's helped that over the last year, banks have been grilled by the select committee inquiry on banking competition that Federated Farmers pushed for," McIntyre says.
He says that there has been a lot of scrutiny and banks have been feeling the pressure.
"So, it's good to see them start to lift their game as a result.
"Many farmers said bank pressure has eased over the past six to 12 months, with some noting their bank had become more understanding or backed off earlier demands," McIntyre says.
However, for those still under pressure, the situation remains serious.
McIntyre says a few farmers shared difficult stories with them, including being forced out of farming altogether.
The survey shows interest rates on farm mortgages have also eased by about 1% since late 2024 to an average of 6.52%.
"Even so, we're still very concerned that, compared with average residential mortgage interest rates, farm mortgage interest rates are around 0.92% higher - and were about 1.12% higher late last year," McIntyre says.
From 2016 until 2021, the margin of difference hovered between about 0.6% and 0.35%.
"These don't seem like big differences, but when total agricultural lending is around $61 billion, a 1% margin difference puts $600 million of extra interest costs on the sector each year.
"It's crazy how much more money farmers are having to shell out to the banks in interest payments.
"Part of the problem is the unnecessarily conservative Reserve Bank capital requirements, and the recent decision to review those settings is very welcome," McIntyre says.
Federated Farmers says new legislation replacing the Resource Management Act will cut red tape, unlock investment and help grow New Zealand's export-led economy, after the Planning Bill and Natural Environment Bill passed their third reading in Parliament yesterday.
Leading figures from the major political parties will be questioned on their primary sector policies at the Rural Issues Debate at Mystery Creek Events Centre, Hamilton, on 30 September.
Will the good times last? That's one of the key issues to come out of the latest Federated Farmers confidence survey.
Mid Canterbury Federated Farmers arable chair, Bevan Lill, said Beef + Lamb NZ data indicated that for the last six years, the average arable return on investment was about 0.8% while inflation ran about 4% - so the average arable farm was going backwards at about 3% a year.
For the first time in a quarter of a century, Federated Farmers has something positive to say about the Labour Party’s climate change policy leading into a general election.
Ravensdown shareholders have elected Jane Montgomery and Kate Acland to the Ravensdown Board for three-year terms, following a closely contested director election.
Federated Farmers says new legislation replacing the Resource Management Act will cut red tape, unlock investment and help grow New Zealand's export-led economy, after the Planning Bill and Natural Environment Bill passed their third reading in Parliament yesterday.
Leading figures from the major political parties will be questioned on their primary sector policies at the Rural Issues Debate at Mystery Creek Events Centre, Hamilton, on 30 September.
OPINION: Have a plan in place now!
Beef + Lamb New Zealand (B+LNZ) says it welcomes the passage of the Natural Environment Bill and Planning Bill, calling the bills a positive step for sheep and beef farmers.
A spate of southerly winds bringing cold temperatures has presented challenges for Taranaki dairy farmers.
