Farmers call on banks to pass on interest rate cuts

The National Farmers’ Federation (NFF) has welcomed today’s interest rate cut, calling on financial lenders to pass the full 0.25 percent cut to their agribusiness customers.
“For the second month in a row, we’ve seen a rate cut by the Reserve Bank of Australia (RBA) in the official cash rate, yet farmers and agricultural businesses are not reaping the benefits,” NFF CEO Matt Linnegar said today.
“Last month, the NFF Agribusiness Loan Monitor showed that in the week following the RBA decision, only one bank made any reduction in their agribusiness loan rates.
“This month, we hope that the Monitor will show a reduction in rates across the board from the financial lenders, taking into account the significant cuts made by the RBA during this period.
“Like all business owners, farmers cannot afford to miss out on interest rate cuts designed to boost the weakening economy and encourage spending growth.
“In fact, just this week we have heard reports that rural confidence has slumped in the last quarter as a result of lower commodity prices, a sustained high Australian dollar and an increase in farm input costs.
“And, with the Government’s carbon tax set to be introduced from 1 July, which the Government’s own ABARES has shown will add significant costs into our farming businesses, now is the time for some positive news for the farming sector.
“Today’s decision by the RBA is welcome news for farmers as it eases some of the pressure – but only if banks pass the rate cuts on. As we saw last month, a cut in RBA rates does not always translate into cuts in bank loans; and a cut in bank loans certainly does not always translate into cuts in agribusiness loans.
“Once again, it’s a waiting game for farmers to see which banks, if any, have passed the cuts on – and by how much. Today, we’re calling on the financial sector to pass the full rate cut on to farmers,” Mr Linnegar said.
The June NFF Agribusiness Loan Monitor will be released on Monday 18 June.