Manawatu-Rangitikei Federated Farmers are throwing their weight in behind calls for an independent inquiry into rural banking - and they’re asking their local MPs to do the same.

"Concerns about rural banking are the number one issue we’re hearing about from our local members," says the Federated Farmers Manawatu-Rangitikei president Ian Strahan.

"Many of our local farming families are struggling to make ends meet with reduced incomes, rising interest rates, and other cost pressures weighing heavily.

"Farmers want to know our local MPs understand the pressures we are under and to have confidence they’re doing something to help lift that weight."  

Strahan says an independent inquiry into rural banking should be a non-partisan issue that politicians from across the spectrum can get in behind and support.

"Supporting an independent inquiry into rural banking won’t cost them a thing, but it would mean the world to our local farming families who are really hurting," Strahan says.

"Farmers are asking some really fair questions, and I think they deserve some straight answers.

"In particular I think an inquiry needs to consider whether there is enough true competition in our rural banking system, and how banks treat farmers once their business becomes distressed.

"There also needs to be a very close look at things like the Reserve Bank’s capital requirements and the effect they are having on the interest rates farmers pay.

"Those rules are amongst the toughest in the world and seem to be adding significant costs behind the farm gate".

The Federated Farmers’ May 2024 Banking Survey showed the number of farmers satisfied with their banking relationship has nose-dived from 80% five years ago to just 51% today.

The survey also found that a record high number of farmers feel they have come under undue pressure from their banks.

Alarmingly, only one in five farmers feel they have been adequately supported by their banks during this time of high interest rates.

"We’ve been hearing some real horror stories since Federated Farmers started banging the drums calling for an independent inquiry," Strahan says.

"That ranges from young farmers who are struggling to get a foot in the door right through to older farmers who have faced huge pressure to sell up their farms.

"We’ve even heard that in some cases, farmers have been encouraged by their bank to use their overdraft to pay down their loan principal.

"There are clearly some serious issues in our rural banking system that need to be closely looked at and urgently addressed."

Parliament’s Primary Production Select Committee are currently deliberating whether to launch a full probe into rural banking.

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