VFF president Emma Germano to big banks: ‘Cut the cute excuses’

Emma Germano says Australia’s big banks need to provide greater financial flexibility to drought-stricken farmers.

Banks need to provide greater financial flexibility to drought-stricken farmers and not hide behind “cute excuses,” the state’s top farmer says.

Victorian Farmers Federation president Emma Germano said reports of banking officials using a lack of ‘drought declaration’ in southwest Victoria as a form of deflection were disappointing.

The Weekly Times understands some farmers have been told by bank representatives that interest rate adjustments and other forms of financial relief were not possible due to the federal government not declaring the region a drought zone.

However, drought declarations or ‘exceptional circumstance’ regions were abolished in 2012 under Canberra aid reforms.

“The banks can’t say it hasn’t been ‘drought declared’ because that government policy no longer exists. They should know that,” Ms Germano said.

“If your waiting for something that doesn’t exist, it’s just a cute excuse.

“It’s a bank that sells up the farm, not the government. So whether that looks like interest rate relief in certain circumstances, whether that looks like deferred interest payments – banks need to take it seriously and not hide from their social responsibilities.

“We do need to see the banks supportive of farmers in what is a cashflow issue. Your farm asset doesn’t drop in value long-term just because there’s a drought, farmers have got to be supported to get to the end of a drought.”

Victorian Farmers Federation president Emma Germano Picture: Supplied

Australian Dairy Farmers president Ben Bennett said a number of southwest farmers had been told by banks that a lack of drought declaration had “tied the hands” of regional managers.

“There’s a lot of sympathy at the local level but they say head office can’t do anything without a drought declaration,” he said.

“The interest bill comes first and the banks need to step up. They’re saying the right things but in terms of action, they’re missing.”

The Weekly Times asked all four of Australia’s major banks whether ‘drought declaration’ was needed to provide farmer financial relief.

ANZ, NAB, Commonwealth as well as Rabobank all confirmed declarations were not necessary.

Westpac failed to respond to questioning.

NAB agribusiness executive Josie Zilm said the bank did not need a drought declaration from the government to provide farmer financial relief.

“We know that climate and seasonal events can happen at any time and in some cases may be very localised,” Ms Zilm said.

“We remain focussed on assisting customers through the various conditions seen across the country.

“In a situation where a customer may need extra support, our local agribusiness bankers will work closely with them to provide assistance based on the customer’s individual needs. My message to anyone finding things tough, please get in touch with your bank – we’re here to help you get back on track.”

Rabobank state manager Sally Bull also confirmed the bank did not need a drought declaration to provide drought relief.

“In these circumstances, the bank proactively works with impacted clients individually to provide a range of appropriate support measures,” Ms Bull said.

“(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.

“Rabobank’s (all in one) rural loans are also specifically designed for farmers to provide financial flexibility to manage through times of difficulty.

“They are flexible, interest-only facilities, which allow agricultural operators to opt to pay principal reductions when they choose, which is of particular benefit in times of reduced cash flow due to adverse circumstances, such as drought.”

A Commonwealth Bank spokeswoman said a formal emergency declaration “was not required in order for customers to access financial hardship support”.

“We are continuing to support business customers experiencing financial difficulty with flexible repayment plans and other programs, through our business financial assistance teams,” the CBA spokeswoman said.

An ANZ spokesman said customer assistance was “not necessarily dependent on drought declaration by government”.

“If farmers experience financial difficulties, we encourage them to speak with us as early as possible,” the spokesman said.

“Each farm’s circumstances are different, and we can consider a range of options to best support our customers.”