Farmers thrilled at rural banking inquiry

Southland Federated Farmers president Jason Herrick. PHOTO: SHAWN MCAVINUE
Southland Federated Farmers president Jason Herrick. PHOTO: SHAWN MCAVINUE
Last week, the Southland branch of Federated Farmers started a campaign against rural banking practices.

Less than seven days later, the Minister of Finance Nicola Willis has approved a select committee inquiry into banking competition, focused on the rural banking sector.

It will be run jointly by the Finance and Expenditure and Primary Production committee.

Southland Federated Farmers president Jason Herrick said it was welcome news for a lot of rural folk.

He was stoked that something the group had started had been picked up by the government so quickly.

"Basically, we want equity right across the board because at the moment the rural sector is unfairly treated when it comes to interest rates, application fees and also the amount needed on equity against borrowing," Mr Herrick said.

Minister Willis wrote to the chairs of the Finance and Primary Production committees, calling for the inquiry, saying that "New Zealand deserved a banking sector that was as competitive as possible".

"Growing the rural economy is critical to rebuilding New Zealand’s economy and with farmers’ satisfaction with banking services dropping in recent years, it’s critical we better understand the role of bank competition in that sector," she said.

She requested the committees review the findings from the Commerce Commission’s draft report on banking services and consider examining the state of competition in the banking sector, including business and rural lending, barriers preventing further competition in the sector, and any possible impact of the regulatory environment on competition and efficient access to lending.

Mr Herrick said the rural sector was struggling and needed things to be fair for all.

"The government understands that the rural sector is the backbone of the country but we also need one another, so it needs to be fair and equitable across the board.

"The rural sector provides a lot to the economy and in these current economic times a lot of them are really struggling."

The government’s announcement was considered well overdue and the organisation was disappointed that it got to this point but there was hope that the inquiry was a positive step and a way to move forward.

"When you’ve got businesses out there really struggling and banks reporting high profits every year.

"For the good of all New Zealanders I really hope the inquiry will bring about a good outcome."



Rural Conversations - ‘What steps are you taking to stay competitive and resilient in the face of domestic and global challenges’