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Federated Farmers president Wayne Langford says interest rate and cost increases are making it tough for many New Zealanders and businesses and the rural sector isn’t immune.
Farmers' satisfaction with their bank relationship continues to slip and more perceive they are under undue pressure, the latest Federated Farmers Banking Survey shows.
Although a majority of the 1017 respondents to the May survey remain satisfied with their banks, with 56% very satisfied or satisfied, this was down three points from the previous survey in November 2022 and is the lowest since the biannual surveys began in May 2015.
“Interest rate and cost increases are making it tough for many New Zealanders and businesses and the rural sector isn’t immune,” Federated Farmers president Wayne Langford says.
But the survey results indicate the banking sector has work to do lifting the standard of their liaison and service to the agricultural sector.
Many respondents were complimentary about their banking relationships, but others highlighted the size and speed of interest rate increases on top of continued concern about banks’ tough lending policies for rural purposes.
“Also mentioned was less frequent communication, bank branch closures and consolidation of rural staff into larger centres more remote from rural areas, high turnover of bank staff and staff having less understanding of farming,” Langford says.
Arable farmers were the most satisfied of industry groups, while sharemilkers were the least satisfied, with barely half saying they were very satisfied or satisfied.
About 24% of farmers perceived they had come under undue pressure from their banks over the past six months, up six points from November 2022. All industry groups had higher proportions compared to six months ago and all were over 20%. Dairy farmers felt the most under pressure and meat and wool farmers felt the least pressure.
Some 44% of farmers felt their mental wellbeing had been affected by their debt levels, interest rates, changing condition, or other forms of pressure, up three points from six months earlier.
“With banks making healthy profits, we don’t want them to be forgetting our rural communities and suggest reinvestment in extra customer service at this time,” Langford says.
“When times are tough, good communication is even more important, but our May survey shows farmer satisfaction on that front has slipped a bit more, continuing the decline of the last five years.”
Other key results from the Federated Farmers survey:
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