Farmers Weekly has reported in recent weeks on the change in approach by the major banks. They’re less inclined to throw money at the sector as they once did and are insisting on capital repayments from farmers.
In one sense it is understandable. Banks will feel they helped heavily-leveraged farmers through the commodity downturn of five years ago. Prices are now very good and the banks are probably thinking it’s time for farmers to knock a chunk or two off their loans while they can. While the global outlook is good, at home the regulators have the industry a little spooked and the cost of compliance is unknown.
But as Scott Wishart states across the page, farming is a long game. When one stakeholder blinks it can pull down the whole house. The mediation scheme will provide a necessary check when things get really bad. It should ensure every avenue is pursued before a farming family has it’s legacy taken from it. One hopes it won’t be called into use too often.
The fundamentals of New Zealand’s primary sector are fantastic, though, and with some further work it’s well-placed to prosper in a world that demands sustainable and ethical food production systems. Realising that potential will take everyone’s commitment, from the farmers on the land to the support services through to those who provide the capital. The country and the world are demanding more from those who emit greenhouse gases and affect water quality. The industry should be excited to meet those challenges and exceed expectations but to do that it needs everyone on board.
Bryan Gibson
