Thursday, 23 May 2024 09:55

Editorial: Rural banking probe overdue

Written by  Staff Reporters
There’s clearly disparity between rural and urban bank lending practices. There’s clearly disparity between rural and urban bank lending practices.

OPINION: If ever there was a need to look at rural bank lending, then this is it.

Federated Farmers' 30-page submission to the primary production select comittee last week makes a compelling case for an immediate independent inquiry into rural bank lending. There's clearly disparity between rural and urban bank lending practices.

What's shocking is that changes made to Reserve Bank (RBNZ) rules would cost farmers even more than He Waka Eke Noa (HWEN), the abandoned primary industry partnership to reduce emissions.

Feds refer to a briefing to the previous Minister of Finance where it is noted banks claimed the changes to RBNZ rules would result in a 0.5% and 1.2% increase in interest rates. To put a 0.5% to 1.2% increase in rural lending costs in context, with total rural lending of approximately $62 billion, this equates to an additional cost of $310 million to $720 million per annum of interest costs. HWEN policy was forecast to levy $220 to $290 million from the sector by 2030.

Rising interest rates combined with high inflation are putting many farmers under huge financial pressure. Some are even being forced out of the industry.

The primary production select committee is investigating rural banking. While this is a good start, what farmers need is a full-scale inquiry undertaken by MPs.

A survey the Feds did of farmers in May this year found farmer satisfaction with their banks was at an all-time low, and the number of farmers reporting they had come under undue pressure from their bank is at an all-time high.

The Commerce Commission has begun a market study on personal banking. Frustratingly, however, rural lending is outside the scope of the Commission study.

It's time for politicians to give rural businesses and rural families some certainty about the fairness of the interest rates they're paying and the services that they're getting.

An independent rural banking inquiry is the way to go.

More like this

Banks urged to withdraw from alliance

Farmers are calling for Kiwi banks and their overseas parent companies need to follow the lead of America's six biggest banks and urgently withdraw from the Net Zero Banking Alliance.

Relief for farmers on floating interest rate

ANZ says the latest cut to its floating rates will be welcome news to many of its business and agri customers still feeling the effects of high inflation and interest rates.

DairyNZ chair wants cross-party deal

New DairyNZ chair Tracy Brown says bipartisan agreement among political parties on emissions pricing and freshwater regulations would greatly help farmers.

Featured

Farmers urged not to be complacent about TB

New Zealand's TBfree programme has made great progress in reducing the impact of the disease on livestock herds, but there’s still a long way to go, according to Beef+Lamb NZ.

Editorial: Making wool great again

OPINION: Otago farmer and NZ First MP Mark Patterson is humble about the role that he’s played in mandating government agencies to use wool wherever possible in new and refurbished buildings.

National

Machinery & Products

Farmer-led group buys Novag

While the name and technology remain unchanged and new machines will continue to carry the Novag name, all the assets,…

Buhler name to go

Shareholders at a special meeting have approved a proposed deal that will see Buhler Industries, the publicly traded Versatile and…

» Latest Print Issues Online

The Hound

Make it 1000%!

OPINION: The appendage swinging contest between the US and China continues, with China hitting back with a new rate of…

Own goal

OPINION: The irony of President Trump’s tariff obsession is that the worst damage may be done to his own people.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter