Bank of NZ offers 6% overdrafts for drought-hit farmers
March 5 (BusinessDesk) – Bank of New Zealand has announced a 6 percent overdraft facility up to $100,000 for farmers affected by drought.
Economists are gauging the impact of dry conditions in the North Island, which are driving up feed costs, curbing milk production and are likely to be a brake on economic growth this year.
The bank’s head of Agribusiness Richard Bowman said the deal is on offer to all of its agri-customers suffering from dry weather. It is also offering $10,000 in emergency family funding. That's down from a base rate of 9.8 percent.
The government declared drought in Northland and said Waikato and the Hawkes Bay may follow.
“Right now farmers need fast access to funds as they’re coming under enormous pressure with the challenge of feeding their stock,” Bowman said in a statement. “This could result in increased feed costs, reduced production and reduced stock prices as they off-load surplus stock, placing further strain on cash flows.”
He said because drought conditions were widespread in the North Island farmers may have more difficulty obtaining supplies of supplementary feed. Against that, the dry conditions have emerged later in the season than previous droughts, meaning pasture would recover if there’s meaningful rain in the near term.
BNZ’s relief package is initially on offer for six months.