Farmer satisfaction with banks at record low - Federated Farmers survey

Federated Farmers spokesman Richard McIntyre says farmers say they are dissatisfied because interest rates are too high. Photo / RNZ / Nate McKinnon

RNZ

Farmer satisfaction with their bank is at record lows, according to a Federated Farmers survey.

The number of farmers still satisfied with their banking relationship had gone down nearly 1 per cent to 56 per cent - the lowest since the survey began in 2015.

Nearly 26 per cent of the 947 farmers surveyed felt they had come under undue pressure from their bank over the past six months.

The average mortgage interest rate farmers are paying is up 8.26 per cent from 7.84 per cent in May - a long way off the lowest point of 3.79 per cent in May 2021.

The average overdraft interest rate increased from 10.07 per cent in May to 10.52 per cent in November, up from a record low of 6.28 per cent two years earlier.

Federated Farmers spokesman Richard McIntyre said farmers reported their dissatisfaction was due to interest rates being too high - and much higher than those for residential borrowers.

High interest rates were “raising eyebrows in farming households across the country”, McIntyre said.

“Farmers deserve to know why farm lending rates are so much higher than the rate on offer for things like urban home loans.”

Many reported their high interest rates were imposed at a time when banks were reporting record profits, McIntyre said.

Listen to Jamie Mackay interview Richard McIntyre on The Country below:

“Farmers are already under huge financial and mental pressure with high costs, falling commodity prices and extreme weather events,” he said.

“As if that wasn’t bad enough, now they also feel like they’re getting a raw deal from their bank.”

The survey results added weight to the group’s call for an independent inquiry into rural banking, McIntyre said.

- RNZ