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The Federated Farmers latest banking survey, conducted by Research First, shows of more than 1300 farmer respondents, 71% were satisfied with their banks. That was a decline of 3% in six months and the lowest level since the twice-yearly survey began in 2015.
According to the researchers, dairy, sharemilker and arable farm groups are likely to be the grumpiest with their bankers.
''The perception of pressure from banks has jumped, with 16% of farmers perceiving they have come under undue pressure. The arable and dairy sectors are feeling this particularly, with more than one in five dairy farmers citing extra strain,'' Federated Farmers economics and commerce spokesman Andrew Hoggard said.
Some of this might seem counterintuitive, Mr Hoggard said, given that dairy farmers' income and profitability had been recovering since the 2014-16 downturn.
''But it's not a surprise that banks want the debt paid down now that dairy returns are better.''
During the same period, the average overdraft limit for all farmers climbed by $14,000 to $224,000, led by non-dairy farmers and in particular, arable farms, whose overdraft limits now hold at an average of $478,000.
Farms in Southland and Otago, along with those in East Coast of the North Island and Canterbury, had the highest overdraft limits, reflecting their higher number of arable farms.
The percentage of farms with mortgages had also increased by 4% to 81% over the past six months, with average mortgages across all farms at $3.75million, led by Canterbury which had the highest regional average mortgage level of $6.7million. Dairy farms are bearing the brunt of higher mortgages by a factor of two over non-dairy farms and nearly seven out of every 10 dairy farmers has a mortgage over $2million, compared with fewer than four in 10 non-dairy farmers.
Arable farm groups also had the highest mortgage percentage, at 92%.
Mr Hoggard said proposed increases in bank capital requirements had also served to erode bank satisfaction, as banks were telling farmers the increases in bank capital would result in tougher lending conditions and higher interest rates for borrowing.
''The Reserve Bank's very conservative stand on this is causing quite a bit of resentment,'' he said.
NZ Bankers' Association chief executive Roger Beaumont, said there would be an approximate $1.8 billion annual cost to the economy if the Reserve Bank Capital Adequacy Proposal proceeds as presented.
In its recent submission on the Reserve Bank proposals, Federated Farmers noted that farming would continue to rely on bank capital for investment to grow the business, become more productive and to respond to environmental requirements, both for seasonal finance and in some cases for survival.
''For some farmers, interest can be the largest single farm expense and with agricultural debt now exceeding $62 billion, a 1% in interest rates is worth over $620 million per annum.
''Dairy farmers hold more than $40 billion of debt, around two-thirds of total agricultural debt, considered by the Reserve Banks as one of the financial sector's key vulnerabilities.''
As part of its submission, Federated Farmers has asked the Reserve Bank to take a less risk-averse approach.
-By Brent Melville