Sharemilkers most likely to face 'undue pressure' from banks, survey finds
The survey shows 80% of all farmers and 78% of dairy farmers were "very satisfied" or "satisfied" with their banks.
The survey shows 80% of all farmers and 78% of dairy farmers were "very satisfied" or "satisfied" with their banks.
Most New Zealand farmers are broadly happy with the relationship with their banks although more report feeling "undue pressure," according to a Federated Farmers survey.
The survey shows 80% of all farmers and 78% of dairy farmers were "very satisfied" or "satisfied" with their banks and reported an improvement in the quality of communications from their bank, the farmer lobby group said in a joint statement with the New Zealand Bankers' Association
Sharemilkers were most likely to feel the strain of their banking relationship, with 15.8% saying they experienced "undue pressure" in relation to overdrafts and 22.2% saying they felt pressure over mortgages.
Federated Farmers president William Rolleston said it wasn't surprising given the current economic climate that sharemilkers, who run their herds on other people's farms under profit-share arrangements, were the most exposed. "Sharemilkers continue to be most vulnerable when it comes to dealing with banks and the data shows they are the least satisfied," he said.
Yet the survey also suggests sharemilkers take the most care over the finances, with 84% saying they have detailed and up-to-date budgets for the current season and 42% having them in place for future seasons. That's ahead of total farms, where 63.5% have a budget for the current season and just 19.6% have them for future seasons.
Mr Rolleston did say his organisation is concerned about the possibility of higher risk margins being imposed on some farmers by their banks, "with the potentially perverse impact of making otherwise sustainable farms more vulnerable."
Other farming types, particularly sheep and beef, are not reporting nearly the same extent of bank pressure and their satisfaction levels remain relatively strong.
In relation to mortgages, 12% of all farms and 16% of dairy farms were coming under "undue pressure: from their banks, and 9.2% and 12.2% respectively are coming under "undue pressure" on overdrafts. The figures are up compared to the last survey in May.
(BusinessDesk)
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