Federated Farmers launches campaign for rural banking inquiry at Fieldays

Wednesday, 12 June 2024

Richard McIntyre, from Federated Farmers, says the country needs to hold a rural banking inquiry as concerns mount over bank behaviour.

Federated Farmers has launched a campaign pressing for an inquiry into rural banking.

The campaign launch is timed to coincide with the start of the annual Fieldays show in Hamilton, and follows Federated Farmers research which revealed a increasing number of farmers feeling under “undue pressure” from their banks.

Richard McIntrye, Federated Farmers commerce and competition spokesperson, said: “I have been inundated with phone calls and emails from farmers, and even some former bankers, wanting to tell their stories.”

“And there’s been some pretty harrowing stories,” he said.

The worst of those involved farmers losing farms that their families had owned for generations, he said.

Farmers felt the way banks dealt with them had changed in the past five years, and even farmers with large amounts of equity in their farms were finding themselves under intense pressure from banks.

MPs thought it was 'ridiculous' how little time they had to inquire into lending to farmers.

There was also a perception that banks had become reluctant to expand their rural lending, preferring to lend to housebuyers in urban areas, which could starve the country’s leading export sector of the capital it needed to transition to a more sustainable future.

The concerns of farmers have been heard in Parliament, where MPs on the primary production select committee have been hearing evidence into whether to hold an inquiry into rural banking.

MPs were left frustrated by the amount of time they had to probe a topic they saw as being of national importance, and unsatisfied by the answers they got from bank lobbyists.

Committee chairperson Mark Cameron was unimpressed by the bank lobbyists who appeared before the committee claiming banks were “trusted advisers” to farmers.

Federated Farmers research found one-in-four farmers felt under “undue pressure” from their banks, compared to one-in-20 in 2015.

Only one-in-five farmers felt “supported” by their banks, Federated Farmers found.

The select committee has yet to report on whether it thinks an inquiry should be called, but speaking after one of the committee hearings, Cameron told The Post: “Across the Parliamentary divide there was universal agreement that the banks appear to have a degree of hubris, or self-congratulation.”

There was “an arrogance we felt the banks were offering”, he said.

Cameron himself spoke during the hearings of a farmer who told him about being defaulted on a loan of less than $100,000 despite having equity of around $5 million.

Federated Farmers would be launching a petition at Fieldays calling for an inquiry.

“The petition is to show the Government how important this is to rural people,” McIntyre said.