If the Government's expectation was for banks to pass on drops in the OCR to lenders, it should make that very clear "and be very firm about it and should remind banks that it does have powers the banks don't have".
Finance Minister Bill English said there was an expectation the banks would pass on those cuts, but that could take time. Primary Industries Minister Nathan Guy said farmers would be watching how the banks responded to last week's cut.
"Right now farmers will be watching this space very closely. What tends to happen in a situation like this is public pressure builds and that's something the banks will be very very mindful of."
He said interest rates were at a 50-year low and farmers were "fortunate" that it was so low. "I'm sure in time that will flow through to the banks."
Mr Little also called on the banks to show "forbearance" towards farmers struggling to cover their mortgages because of the low milk price.
NZH