Dairy farmers happy with banks: survey

Banks have come to the party for New Zealand farmers requiring support during the dairy downturn, according to a new survey.

The Federated Farmers Banking Survey was completed by 1300 farmers throughout New Zealand (over half of them in the dairy industry) the week after dairy giant Fonterra's announcement on 7 August of a forecast payout to farmers of $3.85 per kilogram of milk solids.

Federated Farmers president William Rolleston said the organisation took the step because it was vital the industry knew exactly what level of support it was receiving. 

Only 6.6% of dairy farmers had come under undue pressure from banks over their mortgage, the survey showed.

Just 5.7% were dissatisfied with banks over their mortgages, while 3.1% were unhappy about the quality of communication from banks over the past three months.

Across all farming industries, the level of dissatisfaction over mortgages was 5.2%, with 5.5% saying they have come under undue pressure in this area and 3.5% unhappy with how banks were communicating.

"The support of banks is absolutely critical in these market conditions," Dr Rolleston said.

"They have the ability to make a significant difference to farmers, the industry and the economy if they work constructively and take a long term view."

The survey also found that 25% of dairy farmers do not have a detailed budget for the current season compared with 33% for all farmers.

"More than 10 percent do not have a mortgage and many more have very low levels of debt so this is not entirely surprising, however we remind farmers that, particularly in difficult market conditions, it is important to review your budgets and obtain expert advice from your bank, accountant and farm advisor," Dr Rolleston said.

New Zealand Bankers' Association chief executive Kirk Hope said banks were working closely with dairy farmers to help them manage through tough times.


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