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Farmers not in crisis, say banks

Farmers not in crisis, say banks

ABC Rural    Lisa Herbert    Apr 30, 2013
Responding to the Federal Government's farm finance assistance package, the Australian Bankers' Association says Australia's farming sector is not in crisis.

The package will offer $650,000, 2-year, low interest loans to struggling but viable farmers who have been hit hard by the high Australian dollar and depreciating land values.

Steven Carroll, a Director at the Bankers' Association, claims 'things aren't too bad', and that the government is now filling the void that's been left after the removal of the Exceptional Circumstance assistance scheme.

"ABARE report about four percent of all broadacre and dairy farmers have equity less than 70 percent and negative cash incomes. This is below the 20-year average of five per cent, so, based on that, things aren't too bad.

"There are obviously a number of farmers that are in financial difficulty. There are geographic locations where people are hurting financially. This does happen from time to time, year in, year out. And some industries go through cycles that debt builds up and they are not in a position to manage either a shock to commodity prices or adverse seasonal conditions.

"Agribusiness across Australia is not in crisis. There are some areas that are under financial pressure but it's not all agribusiness across Australia."

But a rural valuer in northern NSW tells a different story.

Ben Green, from Opteon Valuers in Tamworth, says he's seen property values drop and the number of mortgaged farms for sale increase.

"There's definitely been declining values in recent years. The market peaked in 2008-09 and we've seen the market decrease over the last three to four years.

"Values have declined up to 30 per cent for your second tier grazing properties and larger recreational properties.

"The second tier, non-viable producers are probably really feeling it because of the seasonal conditions at the moment and the flat cattle market."

Mr Green thinks taking on more debt might get some farmers into trouble.

"I think so. There's quite a few cases of mortgaged properties selling with possessions. There are more cases than five years ago."

Last modified onSaturday, 29 June 2013 07:40

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