The Federated Farmers’ May 2024 Banking Survey showed the number of farmers satisfied with their banking relationship had dropped from 80% to 51% in five years.
Federated Farmers Southland president Jason Herrick is calling on the region’s MPs to throw their support behind the organisation’s calls for an inquiry.
"Our local rural communities are really hurting at the moment and banking issues are their number one concern," he said.
"Banks are making record profits, but many of our farming families are struggling to make ends meet, with rising interest rates and low payouts.
"The interest rates have doubled. We are talking about paying hundreds of thousands of dollars more in interest."
Mr Herrick found it "completely outrageous" that some farmers were paying between 11% and 18% on their overdrafts.
Reinforcing those hardship claims, the Otago Daily Times spoke to a Southland farming couple forced into jobs away from the farm.
The couple, who declined to give their names, said there was "no accountability as to why they [banks] were charging farmers more interest than the commercial or housing markets".
The farmers felt that the message they were getting from their bank was "to pretty much shut up and pay up".
After working in dairy support and beef farming for 10 years, the couple had now resorted to doing off-farm work.
"Basically we’ve had to go off-farm and get jobs to get any sort of income and still run the farm at the same time."
Despite their dire circumstances, the couple loved farming and could not envision a life doing anything else.
The couple said there was a perfect storm in the farming industry at the moment with interest rates and costs skyrocketing, while their income had decreased and the banks had not acted to support farmers.
"Their excuse for charging exorbitant rates is they are holding more money as security against us in case something does go wrong."
