April 19, 2011 Issue 490
www.ruralnews.co.nz
super-size maize silo page 13
SLASH THE TRASH
page 36
page 8
page 28
Milking management
farm succession
Banks deny lending rort PETER BURKE & ANDREW SWALLOW
LEADING RURAL lenders are denying they’re giving home owners a better deal than farmers. Most household mortgage rates tumbled immediately after the Reserve Bank’s March 10 Official Cash Rate cut to 0.5%. Now some farmers are asking when their loans will be lowered too. “They’re profiteering at the moment big time,” large-scale dairy farmer one large-scale dairy farmer told Rural News. “I thought the Reserve Bank rate cut was meant to stimulate the economy.” With farming such a large propor-
tion of GDP, and even more significant in export terms, surely it should be the sector to benefit, he believes. His concerns are backed up by Federated Farmers’ economics spokesman, Philip York. “The last thing we want to see is housing to go ahead, because that was where we got into the problem in the first place. The price of houses pushed up the dollar and before you knew it was affecting the export side.” York says his organisation is concerned banks are tightening farm credit criteria, while courting home buyers with low deposit and low interest rate loans. The Federation has spoken to the banks about this and is seeking a meeting with the Reserve Bank to get
policy changed. Last week, Real Estate Institute New Zealand released figures showing
“Farmers are not borrowing the same amount.” March house sales up 5.4% in volume and at a new record median of $365,000. Philip York York says farmers are not borrowing the same amount of money as they were before. “They are trying to pay off debt and certainly a few dairy farmers
are… That may be one of the reasons why the banks have got this cash and are trying to get it out to whoever will borrow it.” Ian Blair, general manager of business banking at Westpac, says it’s simply not true homeowners are getting preferential treatment. “Within minutes of the Reserve Bank announcing a cut of 50 basis points to the OCR, Westpac said it would pass on this reduction to all clients who have floating rate loans regardless of whether
they were business or housing borrowers.” Blair is unsure why there is confusion and says concerned farmers should contact their banker. “Certainly, if they’re a Westpac banker, they’ll have confirmed an immediate reduction in their rates.” Meanwhile, ANZ National’s managing director for agriculture and business, Graham Turley, says the effects of the reduction in the OCR will flow through slowly to rural and business borrowers. “I don’t expect the whole 50 basis points to be passed on immediately. But we operate in a very competitive world and I would expect something to be passed on in the next month or so,” says Turley.
PM confident on farm returns PETER BURKE
FARMING is the sector that will pull New
Zealand through the economic impact of the Canterbury quake and global recession says Prime Minister John Key. Speaking at a special briefing at Landcorp’s Achilles dairy farm, near Taupo, Key told Dairy Business Conference delegates the economy is under huge pressure because of the earthquake and it will be agriculture – and dairying in particular – that saves the nation. “What is booming is the agricultural
sector. It’s not just dairy as you know. Sheep farmers are making money for about the first time in 30 years. How they’ve managed to stay in business for the last 29 years is interesting, but they have managed to do it. Forestry is booming. Beef prices are very strong and so are fish prices.” Key says the ‘Asia effect’ is driving returns and the outlook for dairying is particularly bright. “In the seven hours you were in bed last night, we sold more product to China than we did in the whole of 1972. By the way if you think China is big, Fonterra
says India is just as big.” After his speech, the PM mingled freely with delegates. Geoff Spark, Rangiora, congratulated him on his leadership in dealing with the Canterbury earthquake then tackled him on water management issues in Canterbury – especially the need for better storage. Large Herds Association chairman Bryan Beeston asked about the Commerce Commission’s inquiry into the price of milk. And Allan Crafar sidled up and gave Key a piece of paper which he said was the blueprint for saving the economy. Key took it all in his stride.
Prime Minister John Key with Bryan Beeston - president of the Large Herds.
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