AUSTRALIAN farming is facing a "subprime" banking crisis threatening output and livelihoods across vast swathes of the nation's rural communities, according to agricultural specialists, financiers and farmers.
"Basically, the industry needs recapitalising – across all types of capital"
Spiralling debt and stumbling incomes are creating a crippling mix of forced sales and falling productivity that is sapping the confidence of a key industry already facing profound structural and demographic issues.
"This is the Fannie Mae of the bush," claims fourth-generation Queensland wheat grower Rowell Walton, referring to the collapse of a Washington-based US government mortgage agency that heralded the scale of the US subprime crisis.
Mr Walton, chairman of the federal government's National Rural Debt roundtable, claims he is battling to "save his family" after his bank declared his five-property farm bankrupt.
"Basically, the industry needs recapitalising – across all types of capital," said Mark McGovern, a senior lecturer at Queensland University of Technology, who has been monitoring the sector's debt. "Continuing denial of rural realities will serve no one well, be they farmers, bankers or others supposedly interested in the well-being of those in the bush."
Veteran financiers are alarmed at the strategic response of bankers and liquidators involved in highly profitable administration and sale of properties. This routinely sees farmers losing assets that took generations to acquire and nurture.
"At what point does a bank take responsibility for overlending?" asked a senior agricultural financier, who requested anonymity. "No farmer can force a bank to lend money to them. . . there must be shared responsibility."
Cattle farmers across the north of Australia, wheat farmers in Western Australia, dairy farmers in south-east Victoria, horticulturalists in central NSW are facing unprecedented levels of debt and forced sales. The financial toll on rural communities and industries, from farmhands to providers of specialist services, has been devastating and is growing, according to dozens of submissions to the recent Senate economics committee on the proposed Australian Reconstruction and Development Bill.Author : DUNCAN HUGHESSource : The Land
Banks are only there to make money. They don't care about customers. It is all performance driven, the front line staff are judged by how much business they can sell for the bank. The management don't care about people only profits. Unfortunately many farmers are easily blind sided when it comes to loans and tax deductibility of items. You need to pay tax to reap the rewards of tax deductibility. They need to talk to Rural Financial Counselors or equivalent who are a free service totally independent and there for the farmers. Save our local farms before it is too late.Report