Westpac NZ data shows more and more farmers commit to sustainable ways of farming
Westpac NZ’s new Sustainable Farm Loan data showed that New Zealand farmers are turning to more sustainable ways of farming, determined to combat the ill effects of climate change on their livelihood.
“We’ve seen a number of extreme weather events impact farmers over the past few years, so it’s not surprising that our data shows customers are prioritising investment in flood and drought mitigation,” Westpac NZ head of agribusiness Tim Henshaw said.
Henshaw said that farmers using Westpac NZ’s Sustainable Farm Loan were required to tell the bank of their farming practices and what made them sustainable. He said that aside from investing in drought and flood mitigation, farmers are also cashing in on green farming technologies to ensure that their carbon emissions during farm operations are reduced.
“In addition, though, we’re seeing a second key theme of customers focusing on emissions reduction. It's positive to see that farmers are investing in new technologies and being a bit more strategic about farm management – whether that’s planting more efficient crops, choosing renewable energy sources or working to breed stock with higher body weights, we’re seeing a lot of thought going in to help bring emissions numbers down,” Henshaw said.
Westpac launched its Sustainable Farm Loan in June 2023, with more than $2.7bn worth of loans that have been released to growers and farmers who promised to meet the Westpac Sustainable Farm Standard. Bank customers who obtained the loan were given two years to work on meeting requirements stipulated in the loan agreement. These requirements were designed, according to Westpac, to complement other farm assurance programs, hence reducing the reporting commitments and duplications for farmers.
On the other hand, Henshaw disclosed that while profitability remains the top priority among farmers, supply chain requirements and regulations compliance put pressure on farmers – particularly on their finances. In 2022, the New Zealand government proposed taxing agricultural emissions as part of its effort to curb the effects of climate change, and this is set to take effect in 2025.
“Customers throughout the country continue to face a multitude of on-farm risks that are impacting them financially. Many of them are aware that they need to invest in sustainability to comply with regulations and supply chain requirements, as well as to future-proof their operations, but funding that investment can be challenging,” Henshaw said.
Knowing the issues, Westpac’s Sustainable Farm Loan has provided their agribusiness customers with discounted lending and guidance to ensure that they remain committed to sustainable agriculture.
