Bipartisan commitment for banking reforms vital for future of farming

Published: Comments:
Australian Government Business Business & Economy Money & Finance Political Primary Industries Queensland Government


AgForce CEO Michael Guerin says the extraordinary weather events being experienced across Queensland - with many producers still suffering from long-term drought while others watched their properties and livestock being washed away - underlined just how critical was reform of the banking sector.

Mr Guerin said AgForce was fully supportive of the underlying intent of many of the Banking Royal Commission recommendations to ensure banks involved in rural lending demonstrate fairness, compassion, patience and knowledge of the industry.

AgForce said the much-needed reform offered by the recommendations was critical to ensure recovery from natural disasters, continued strong growth in the sector and to safeguard the livelihoods of farmers.

"We hope both the Government and Opposition will now demonstrate the leadership and strength of character to commit to their implementation," Mr Guerin, a former banking professional, said.

"It is impossible to overstate the importance to the future of this sector of farmers being able to have confidence in our banking sector."

Nationally, the agriculture industry has a target of increasing farmgate production to $100 billion annually by 2030, a significant 33 per cent increase on current levels.

"To achieve this stretch goal, we need to have a transparent, fair, consistent and collaborative relationship with the banking sector and the essential services it provides," Mr Guerin said.

"Debt financing is critical to the Queensland agriculture industry. Without good access to fair debt finance, many farmers would not be able to finance investment in their property or maintain working capital."

Nationally, 96 per cent of agricultural lending is with banks.

"In particular, we support the establishment of a national farm debt mediation scheme to ensure co-operative resolution of financial problems as they arise, with access for farmers to affordable professional support to negotiate the best outcome," he said.

"We strongly support an end to the charging of default interest when there is no reasonable prospect of recovering the amount charged. This practice has been the source of much angst for farmers with failing loans.

"Increased transparency around asset valuation processes is also important, to ensure the fair value of assets, including property and equipment, is realised if it has to be sold."

Mr Guerin said the industry recognised the vital role of banks in their industry, but just asked for fairness and understanding.

"The prolonged and severe drought - not to mention other natural disasters our producers have recently or are currently experiencing - has taken an enormous financial, environmental and emotional toll on farming families across Queensland.

"Farmers will need the support of their lenders to ensure their recovery, a process that will take years, not months."

"We need banks to understand the unique characteristics of agricultural businesses and the highly variable environment they operate in," Mr Guerin said.

However, despite the constantly changing conditions like we are currently seeing, farmers have worked hard to manage their risks and improve their financial resilience and the industry has an appetite to continue to invest and develop further.

Queensland government data from 2017 (1) showed that about 95 pc of the total value of rural debt is viable or potentially viable in the long term, a solid foundation given a seven-year severe and widespread drought.

"We must ensure that the partnership between banks and farmers is respected and characterised by ethical conduct and strong communication.

"In achieving this we must set a framework that also maximises access to finance and a level of risk taking that allows for innovation and industry and individual growth.

"It is a fine balancing act but one we must succeed at."

(1) Queensland Rural Debt Survey 2017

AgForce Queensland :
Level 2, 110 Mary Street, Brisbane Qld 4000, Queensland Wide
07 3236 3100
AgForce Queensland
Showing 10+ recent articles for this business
Bipartisan commitment for banking reforms vital for future of farming 05 February 2019 | AgForce CEO Michael Guerin says the extraordinary weather events being experienced across Queensland - with many producers still suffering from long-term drought while others watched their properties and livestock... More information...
AgForce mourns the loss of former Grains President Lyndon Pfeffer 29 January 2019 | The AgForce family expresses its deepest condolences to Lyndelle Pfeffer and the whole Pfeffer family on the passing of Lyndon Friday evening. More information...
AgForce welcomes Federal Parliamentary Inquiry into vegetation management 07 December 2018 | AgForce Queensland Farmers has welcomed the Federal Government's announcement of a Parliamentary Inquiry into the role of vegetation management in Queensland's devastating bushfires. More information...
Best and brightest sought to drive agricultural policy 28 November 2018 | AgForce is seeking experienced, enthusiastic and creative thinkers to help drive policies that ensure the continued sustainability and growth of Queensland agribusiness. More information...
Molasses arrives from overseas to assist drought-stricken farmers 19 November 2018 | The first container shipment of molasses from Vietnam arrives at the Brisbane Port today with the cattle feed supplement to be distributed throughout Queensland amid concerns local supplies were running out due to... More information...
Queenslanders urged to celebrate National AgDay 12 November 2018 | National AgDay provides an opportunity for all Queenslanders to celebrate farmers' role in sustainably feeding and clothing the world, AgForce CEO Michael Guerin said today. More information...
Impact of drought laid bare in survey of Queensland farmers 25 October 2018 | A survey of Queensland farmers has revealed about half had lost more than half their annual income due to drought and about 60 per cent had less than half their potential water supply. More information...
Farmers unite to call for ag education program to continue 23 October 2018 | The Queensland Farmers' Federation (QFF) and AgForce have united to call on the Palaszczuk Government to maintain funding for a hands-on agricultural education program that showcases where food comes from and... More information...
Cattle producers urged to have their say on lay preg testing 19 October 2018 | Cattle producers are being urged to let the State Government know that lay pregnancy testing is a key herd management tool that can help producers to lift fertility rates and in turn the productivity and profit... More information...
Wild dog fencing funds boosting regional communities 10 October 2018 | AgForce has welcomed the opening of applications for the next round of wild dog exclusion fencing funding, and urged the Queensland Government to ensure the money gets out on the ground as soon as possible. More information...

comments powered by Disqus

All articles submitted by third parties or written by My Sunshine Coast come under our Disclaimer / Terms of Service