Farmers Weekly NZ August 26 2019

Page 1

3

Best trade/specialist publication and website – Voyager Media Awards 2019

Vol 18 No 33, August 26, 2019

Draconian water rules feared

farmersweekly.co.nz

$3.95

Incl GST

Credit crunch Hugh Stringleman

F

hugh.stringleman@globalhq.co.nz

ARMERS with average to heavy debt loads are very concerned about the new lending policies of banks coming on top of looming environmental compliance requirements. Federated Farmers national vice-president Andrew Hoggard has no doubt a credit squeeze is being applied in advance of the Reserve Bank’s change in capital requirements for banks. Banks need to give their farming clients more notice of new, restrictive policies and not just apply them across the board. “The Reserve Bank has only proposed the change in capital at this stage, not introduced it. “The banks need to show more honesty with their clients.” One farmer who contacted Hoggard was worried about nitrogen-loss requirements being imposed by his regional council at the same time as the bank edict – no new borrowing and pay down some of the loan principal. “His worry was, how is my farm going to remain viable?” As more environmental policies take shape farmers will worry about the costs of compliance and where that money is coming from. “Look at the noise about

winter grazing at present – all other options require more infrastructure and more capital.” Hoggard said there isn’t any point in arguing about how indebted farmers got themselves into that position. “The reality is they are there now so how do we deal with that without throwing them to the wolves?” His main concern is the fraught transition to a new debt reality without losing a whole lot of farmers, their assets, homes and families. The loss of about 40% in Fonterra share equity is very serious and compounding the balance sheet problems of dairy farms. Bank margins are now too high in many cases and less-indebted farmers should look around for a better deal, Hoggard advised. Federated Farmers Sharemilkers’ subsection chairman Richard McIntyre said his members are under a lot of tension. Their average debt of $1 million, plus about $150,000 seasonal overdraft, is 80-90% secured against cow values and the rest against plant and machinery. Any setback in dairying – a lower milk price, depreciating supply shares, weather problems – causes cow values to fluctuate and exposes sharemilkers to debt repayment concerns.

PROUD: Jon Pemberton says unity is the key and anyone with an agenda has got to put it to one side.

Ag Proud engages urban folk Neal Wallace neal.wallace@globalhq.co.nz SOUTHLAND farmers have formed a group to engage with their urban neighbours on what happens on farms and why. Ag Proud member Jon Pemberton says stress among farmers from a recent winter grazing media campaign by activists was the catalyst for its formation. It launched last week by hosting a free barbecue in Invercargill to engage with city people. It does not have an agenda other than to celebrate the rural

“The banks are keen to court sharemilkers when times are good because they are the future farm owners. “But now we are seeing proposals being turned down and young farmers concerned about

sector and to share that pride and information about what farmers do and why. The movement also hopes to highlight the issue of mental health among those in rural NZ. “It’s about being proud to be a farmer and to create awareness of the mental wellbeing and stress among rural NZ families.” Similar Ag Proud groups are forming in Otago and Canterbury and Pemberton, a dairy farmer, says the vision is to take it nationwide. Within 48 hours of footage gathered by the activists

getting funding if they want to enter the industry.” McIntyre said the bank refusals he had heard about are cases where sharemilking contracts were signed first before the banks were approached

surfacing in the media the group was formed and with support from 100 agricultural people hosted the barbeque. It aims to promote what is good about farming and farmers by talking to people in open and honest discussion. “Unity is the key on this and anyone with an agenda has got to put it to one side.” Ag Proud plans to host an evening farmers market in Invercargill in mid December.

MORE: SOUTHLAND STRESS

and farm budgets written. “My advice is talk to your banks before starting negotiations with farm owners.” He also welcomed the Farm Debt Mediation Bill, now at select committee stage in Parliament.

A NEW LOOK, A STRONGER FOCUS. It’s back to the future for us as we have re-branded away from Tru-Test Dairy Solutions back to what the market has known us as – DTS. As New Zealand’s leading milk cooling supplier and manufacturer of milk vats, we’re all about helping our customers grow through innovation. For smarter production and better rewards contact us www.dts.co.nz | 0800 500 387

P7


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.