NAB pledges $5m to provide immediate support to bushfire-affected farmers

NAB says there will be no foreclosures on bushfire-affected farmers as it works with its customers during the crisis.

Farmers who had not experienced livestock losses were still suffering, having suffered damage to farm or dairy equipment. Picture: Mark Stewart

Australia’s biggest farming lender, NAB, is pledging $5m to provide immediate support to bushfire-affected farmers in an attempt to help stave off bad debts and the forced selling of farms.

The package is aimed at providing immediate relief to farmers and is in addition to longer-term measures including deferring interest and repayments for up to three years and $1bn in concessional loans.

It comes as poor behaviour from banks was exposed during the banking royal commission last year, including criticism of the leadership of former NAB chief executive Andrew Thorburn and chairman Ken Henry, leading to both their resignations in February.

In announcing the bushfire support package, NAB chief customer officer - business and private banking, Anthony Healy, committed there would be no foreclosures on bushfire-affected farmers as it worked with its farming customers throughout the crisis.

So far about 1000 of the bank’s farming customers in NSW South Coast and Gippsland in Victoria had experienced bushfire damage and Mr Healy said he expected that number to rise in the weeks ahead.

“There have been significant stock losses, cattle killed or shot and we expect there will be pretty wide demand for these grants,” Mr Healy told The Australian.

“One in three farmers in the country bank with us and this (the grants) is aimed at providing immediate relief. We expect it will be a difficult couple of years.”

However, Mr Healy said he didn’t expect the level of bad debts to rise as a result of the bushfires, given the measures the bank has introduced, particularly the deferral of interest and repayments.

“What you’ll see is impairments which is different to debts being written off. That’s why we put in place the deferrals.

“That (the three years) is normally the length of time to put in place arrangements to help minimise bad debts so they (farmers) can come out the other side.”

The fires have devastated dairy farms across NSW’s South Coast and in eastern Gippsland. Bega Cheese shares fell more than 9 per cent on Monday, before slightly recovering on Tuesday, after it confirmed a number of its milk suppliers had experienced fire damage.

The NSW Department of Primary Industries said so far 3900 head of livestock had been euthanised or killed in bushfires across NSW this season. But the full extent of devastation may not be known for weeks.

But Mr Healy said even farmers who had not experienced livestock losses were still suffering, having suffered damage to farm or dairy equipment - or spilling milk because it could not be collected.

“So there is still damage to income producing assets.

“We want to help those affected start to rebuild, with some immediate assistance to help our customers and colleagues deal with the impact – as well as support the long-term recovery effort.”

The $5m comprises NAB injecting $3m into its Disaster Relief fund (to a total of $4m), extending its $2000 emergency relief and recovery grants to impacted business owners and farmers. The fund will also support longer-term efforts to help impacted communities recover and rebuild.

“This is about supporting our customers over the long run, restructuring and investing in on farm resilience,” Mr Healy said.

He said some farms might choose to invest in more sustainability programs such as better water management. He also said that, over the longer term, debt levels could decline as farmers sold property or decided to move to less intensive farming practices.