Farmer Confidence in Banks Hits Decade Low
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- Farmer satisfaction with banks has dropped to 51 percent from 80 percent in 2018.
- More than 23 percent of farmers are dissatisfied or very dissatisfied with their banks.
- Farmers face high interest rates, inflation, and reduced incomes, increasing pressure.
Farmer confidence in banks has fallen to its lowest level in nearly a decade, prompting calls for an independent inquiry. A recent Federated Farmers survey of over 640 farmers revealed only 51 percent were satisfied with their banks, a significant drop from 80 percent in 2018. This marks a worrying trend as dissatisfaction and undue pressure from banks are on the rise.
Richard McIntyre, Federated Farmers’ commerce and competition spokesperson, highlighted that farmers are dealing with higher interest rates compared to urban counterparts. Alarmingly, one in four farmers reported experiencing undue pressure from their bank.
“Rural banking issues are nearing crisis point and farmers are quickly losing confidence,” McIntyre said. “Things have clearly gone from bad to worse, with consecutive surveys showing all the key metrics we track heading in the wrong direction.”
He emphasized that these issues extend beyond statistics, profoundly affecting rural communities. “These numbers represent real Kiwi farming families who are clearly under huge pressure from high interest rates, rampant inflation, and reduced incomes,” McIntyre stated.
A new question added to this year’s survey asked farmers if they believed New Zealand banks are showing a positive commitment to support farming during high interest rates. Disappointingly, only one in five farmers responded affirmatively.
“At a time when farmers are really struggling, I would have hoped to see our banks stepping up to help, but instead, they seem to be tightening the screws,” McIntyre remarked.
Federated Farmers has submitted a proposal to the government, urging an independent inquiry into rural banking. The issue was discussed at Parliament’s Primary Production Select Committee on Thursday morning, signaling the urgency of addressing these widespread problems in the rural banking system.