New service helps farmers meet environmental costs

The increasing need for farmers to meet compliance costs as they expand their operations has led the ASB Bank to launch a low-cost ''rural environmental compliance loan''.

ASB rural general manager Mark Heer told the Otago Daily Times the funding option was to help farmers get the balance right between productivity and environmental sustainability.

The new product was aimed at farmers looking to invest on-farm to upgrade their environmental compliance systems.

''ASB won't be the solution but we want to be part of the solution. We recognise the farming sector is the driving force of the New Zealand economy and that it is important that New Zealand's farmers get the balance right between productivity and environmental sustainability.''

If farmers had taken out the loan last week, the interest rate would have been 3.86%, the cost of the funds. The rate would be variable and would rise or fall with market costs, Mr Heer said.

Loans were available to New Zealand farmers for environmental purposes up to a maximum of $200,000 and a maximum five-year term.

Mr Heer, who worked in Dunedin with the Rural Bank 25 years ago, said the growing middle class in Asia had moved towards the Western high-protein diet and that created opportunities for the rural sector to provide value-added agricultural exports.

Agriculture remained an important part of the New Zealand economy, he said.

''Increasing value-added exports will have a positive impact across all of New Zealand but it provides challenges through the impact on the environment. We have to get the balance right.''

The loan was developed in response to feedback from ASB's rural customers, he said.

''Farmers consistently tell us they are doing their best to ensure their farms are operating to the highest environmental standards. However, the reality is that there can be considerable costs associated with upgrading systems, including the fencing of waterways, which are all part of operating in an environmentally responsible farm.''

At the same time, local government regulations for effluent management, nitrate leaching and water use on farms had been tightening, so farmers had to ensure they were compliant, or risk fines.

Farmers were facing all those pressure while at the same time trying to focus on the productivity and profitability of their business, Mr Heer said.

On the web: asb.co.nz/comply