Farmers are feeling slightly more satisfied and less under pressure from their banks, the Federated Farmers May 2020 Banking Survey shows.
Responses to Research First from nearly 1400 farmers found that the number feeling "satisfied" or "very satisfied" with their bank lifted slightly from 68 to 69 per cent inthe past six months, and those feeling "under pressure" dropped from 23 to 19 per cent.
"Satisfaction had slipped as a trend since we started this twice-yearly survey in August 2015 and this is the first positive change since then," said Federated Farmers vice-president and commerce spokesman Andrew Hoggard.
It has been tough for many farmers in the last few months, with widespread drought and the pandemic fallout.
Banks have been actively encouraged by the Government to support lending during the economic downturn through measures like the Business Finance Guarantee Scheme.
The Reserve Bank also delayed implementation of its tougher bank capital requirement, again to help banks support lending.
"This approach has probably also spilled over into rural lending even though farming has been less badly affected by Covid-19 than most other sectors of the economy" said Hoggard.
Arable was the group with the highest percentage of farmers feeling under pressure (28 per cent, down from 30 per cent in November) and they also had the lowest percentage feeling very satisfied or satisfied (58 per cent, down from 60 per cent in November).
Federated Farmers vice-president and commerce spokesman Andrew Hoggard. Photo / Supplied
Meat and wool farmers were relatively more satisfied than most other groups (72 per cent feeling very satisfied or satisfied) and they were also less likely to be feeling under "undue pressure"' (13 per cent).
"Another positive result from the survey is that average interest rates both for mortgages and for overdrafts have come down, by 0.4 per cent each, so it would seem that recent OCR cuts have been passed on" said Hoggard.
"However, it will also reflect people who have re-fixed at lower rates after a few years at higher fixed rates".
"There are significant challenges ahead, with the drought persisting, winter feed stores under significant pressure and uncertain global trading conditions, to name a few. Fortunately, the Farm Debt Mediation Scheme will come into effect on July 1" said Hoggard.
"As in the past, our survey underlines how important it is for banks to treat their customers fairly and for farmers and banks to be proactive in their communications.".
