increase font size
In any downturn, banks will always be very supportive of farmers through the first year, but come the second year, things may start to change.
Farmers are at the mercy of Australian banks as they navigate through low prices and high input costs, says accountant Pita Alexander.
He points out that the first thing to remember when talking about banks is that Australian banks control about 85% of New Zealand's total bank lending.
"In other words, we are at the mercy of the people on the 36th floor of a building in Melbourne," he told Rural News.
In any downturn, Alexander says the banks will always be very supportive of farmers through the first year, but he says come the second year, things may start to change.
He says a lot will depend on the existing financial circumstances of individual farmers or horticulturists. In some cases, he says banks will help those who have been to hell and back, but others may not be so lucky.
He points out that banks' first priority is always their shareholders. He says there has been some criticism about what is seen as the huge profits that banks are making but he argues that the country needs strong, profitable banks.
"The last time I looked at the ANZ accounts in 2022, they were making about 11% on shareholders' funds which wasn't out of line," he says.
The other issue hanging over NZ, says Alexander, is the tax take from the agri sector.
He says Treasury has over estimated this over the last two years and this may have implications for government spending.
A Few Tips
OPINION: The good fight against "banking wokery" continues with a draft bill to scrap the red tape forcing banks and financial institutions to make climate-related disclosures, by repealing Part 7A of the Financial Markets Conduct Act 2013.
OPINION: Noted economist and self-promoter Cameron Bagrie took one look at KPMG's recently released Financial Institutions Performance Survey on banks and zeroes in one key number that suggests banks are so risk averse in this country that they are probably stifling growth and innovation.
ASB's new head of food and fibre, Kristen Ashby, believes that there’s “heaps of opportunity” in the agriculture sector.
OPINION: Shane 'Matua' Jones, crusader against all things woke, including "woke banks", couldn't have scripted it better when his NZ First colleague Andy Foster had his Members' Bill drawn from the ballot recently.
Dairy and beef farmers could be eligible for lower interest lending options for financing Halter on their farms, with ANZ, ASB and BNZ now offering a pathway to sustainability loans for New Zealand’s largest virtual fencing provider.
Newly elected Federated Farmers meat and wool group chair Richard Dawkins says he will continue the great work done his predecessor Toby Williams.
Hosted by ginger dynamo Te Radar, the Fieldays Innovation Award Winners Event put the spotlight on the agricultural industry's most promising ideas.
According to DairyNZ's latest Econ Tracker update, there has been a rise in the forecast breakeven milk price for the 2025/26 season.
Despite the rain and a liberal coating of mud, engines roared, and the 50th Fieldays Tractor Pull Competition drew crowds of spectators across the four days of the annual event.
Nationwide rural wellbeing programme, Farmstrong recently celebrated its tenth birthday at Fieldays with an event attended by ambassador Sam Whitelock, Farmers Mutual Group (FMG), Farmstrong partners, and government Ministers.
Six industry organisations, including DairyNZ and the Dairy Companies Association (DCANZ) have signed an agreement with the Ministry for Primary Industries (MPI) to prepare the country for a potential foot and mouth outbreak.
OPINION: ACT MP Mark Cameron isn’t everyone’s cup of tea, but he certainly calls it how he sees it, holding…
OPINION: Did former PM Jacinda Ardern get fawning reviews for her book?
