Farmer concerns are grounded in reality, not 'no-hope narratives'
OPINION: The 'Save Our Sheep' campaign is built on a foundation of structure, integrity, and evidence from the Federated Farmers Meat and Wool Council.
There are calls for the Reserve Bank to drop its banking capital rules, which Federated Farmers says is costing farmers a fortune.
Federated Farmers banking spokesperson Richard McIntyre says the Reserve Bank's rules are among the strictest in the world and are a handbrake for economic growth.
"They've unnecessarily driven up the cost of rural lending to the point they're bleeding farmers dry - for no good reason," McIntyre says.
In 2019, the Reserve Bank introduced new rules requiring banks to hold enough capital to withstand a one-in-200-year financial event, adding 50 to 120 basis points to agricultural loans.
Prior to the rule change, banks were only required to hold enough capital to withstand a one-in-100-year financial event.
Now, Federated Farmers are calling on the Reserve Bank to revert to that standard.
"In terms of the total cost to farmers, we're talking about $600 million of unnecessary extra interest payments each year," McIntyre says.
He says that at the farm level, that equates to $44,000 of extra interest payments for the average farmer.
"That’s a huge sum of money being sucked directly out of our rural communities that otherwise would have been reinvested in growing our agricultural sector."
This week, Bank of New Zealand chief executive Dan Huggins told Parliament's banking inquiry that the Reserve Bank rules have driven up farmers' interest rates by 1%.
This means that a 6.5% loan is now 7.5%.
McIntyre says the Reserve Bank needs to open its eyes to the damage the policy is creating for farmers, rural communities, and the wider economy.
"These capital rules have been a real focus for Federated Farmers throughout the banking inquiry. In fact, they’re one of the main reasons we called for an inquiry in the first place," he says.
"All the rules have done is driven up the cost of borrowing and made it harder for farmers to get loans when they need them.
"Federated Farmers will keep pushing hard for a fairer banking system for farmers - and with a change of leadership at the RBNZ, the door is certainly open to achieving that."
A Chinese business leader says Chinese investors are unfairly viewed as potential security risks in New Zealand.
In the first of two articles focusing on electrification in New Zealand, Leo Argent talks with Mike Casey, operator of the 100% electric-operated Electric Cherries orchard and founder of advocacy group Rewiring Aotearoa.
A Foundation for Arable Research initiative which took a closer look at the efficiency of a key piece of machinery for arable farmers - their combine harvesters - has been recognised at the Primary Industry NZ Awards.
Prime Minister Christopher Luxon has reiterated New Zealand’s ‘China And’ policy, adding that it wasn’t about choosing one market over another but creating more options for exporters.
A long running trade dispute between New Zealand and Canada over dairy access has been resolved.
New Zealand Police is urging rural property owners to remain vigilant and ensure their property is secure.
OPINION: Spare a thought for the arable farmer, squeezed on one side by soft global prices and on the other…
OPINION: Labour leader Chris 'Chippy' Hipkins is carrying on the world-class gaslighting of the nation that he and his cohorts…