Lobby group notes the results strengthen their call for an independent inquiry
Federated Farmers has released the results of its latest Banking Survey, which was conducted in mid-November. According to the survey, farmers are feeling pressure from their banks, with satisfaction rates with their banks at record lows.
About one in four (25.8%) felt they had come under “undue pressure” from their bank in the last six months, up 2% compared to data in May. While more than half are reporting to be “satisfied” or “very satisfied” with their bank, the figures are down by 0.7% compared to the results in May.
Call for an inquiry renewed
Richard McIntyre, domestic commerce and competition spokesperson at Federated Farmers, said the results add weight to the call for an independent inquiry into rural banking.
“Farmers are already under huge financial and mental pressure with high costs, falling commodity prices and extreme weather events. As if that wasn’t bad enough, now they also feel like they’re getting a raw deal from their bank,” said McIntyre.
“This is exactly why Federated Farmers has been calling on the Government to support an independent inquiry into rural banking, so farmers can have confidence the banking systems are operating in a fair and proper way.”
The average mortgage interest rate in the survey was 8.26%, up from 7.84% recorded in May 2023. The average overdraft interest rate increased to 10.52% in November from 10.07% in May 2023, up from a record low of 6.28% from two years prior.
The lobby group highlighted how the banks appear to be charging far higher interest rates for farm lending than for home loans, describing it to be “raising eyebrows” in farming households across the country.
“Farmers deserve to know why farm lending rates are so much higher than the rate on offer for things like urban home loans,” said McIntyre. “That came through loud and clear in the responses. There was concern about the state of competition in rural lending and some blamed the impact of regulation, such as bank capital requirements and risk weightings. Some also expressed concern about banks pushing for reductions in farms’ greenhouse gas emissions.”
McIntyre notes that high interest rates continue to pressure the farming community. The survey also found 44.3% of farmers are reporting their mental wellbeing is affected by their debt levels, interest rates, changing conditions, or other forms of pressure.
The lobby group is also encouraging farmers to ensure they are maintaining detailed and up-to-date budgets as the survey also revealed only 64.5% of farmers have budgets for the current season. McIntyre emphasised the importance of keeping in touch with their bank, rural professionals, farm discussion groups, and other experienced farmers to work through issues.
“Only 18% have budgets so far for next season, and although there’s still a lot of uncertainty about next year, we encourage farmers to plan for it too,” said McIntyre.
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