Farmers ‘being slammed by banks’

Southwest Victorian farmers hit by drought are being squeezed by the banking sector, farmer leaders say, with the Premier urging financiers to show compassion.

Southwest Victorian farmers hit by drought are being squeezed by the banking sector, farmer leaders say, with the Premier urging financiers to show compassion.

High interest rates and a cut to the dairy farmgate on July 1 have hit many primary producers across southeastern Australia.

But Australian Dairy Farmers president Ben Bennett said the hip-pocket pain was acute in southwest Victoria, with the need to bring in fodder growing more expensive by the week.

“Few farmers want to go public about it but many are being slammed by the banks,” he said.

“The repayments come first and everything else comes second.”

Farmers have told The Weekly Times banks are taking a more cautious approach to extending credit, and have a lower appetite for risk given the combination of factors of poor seasonal conditions, higher interest rates and softening commodity prices.

One farmer, who did not wish to be named, said banks were more cautious in cases such as buying livestock to put on feed without sale contracts locked in.

He said the volatility seen in the past couple of years in livestock pricing contributed to financiers being more reluctant to extend credit.

A Commonwealth Bank spokeswoman said: “We know that our customers count on us to be there for them, particularly those finding it tough.

“So we are proactively reaching out to our business customers to check in on them and ensure that those who need support know how to access it and understand what measures are available and that we’re here to help.”

An ANZ spokesman said: “If farmers experience financial difficulties, we encourage them to speak with us as early as possible. Each farm’s circumstances are different, and we can consider a range of options to best support our customers.”

Rabobank state manager Sally Bull said: “In (drought) circumstances, the bank proactively works with impacted clients individually to provide a range of appropriate support measures, including waivers of break costs on early redemption of farm management deposits, deferrals of scheduled loan repayments, ‘carry on’ finance and waivers of fees on loan increases necessary for rebuilding operations.”

Representatives of Bendigo, National and Westpac were contacted by The Weekly Times for comment.