Federal agriculture minister Barnaby Joyce has ccongratulated the ANZ bank on its’ decision today to introduce a 12 month moratorium on new farm repossessions until December 2015.
“I would like to congratulate ANZ on responding to the well held concerns of farmers in drought affected parts of Queensland and New South Wales and the concerns held by the public in general that these farmers are treated fairly,” Mr Joyce said in a statement this afternoon.
“As we have stated, we much prefer the banks to manage their own situation rather than the government having to intervene. And these are precisely the actions that show how a bank has the capacity to assist in these difficult times.”
ANZ has announced a comprehensive support package for drought stressed farm businesses including a 12-month moratorium on new farm repossessions until December 2015 among other practical measures.
“We must allow for the orderly transition from drought to the strong cash flow that we have worked for by the opening of new markets and the expansion of the live cattle and live sheep trade.
“Cattle and sheep production have a great future in these areas of Queensland and New South Wales as does cropping and grain sales with the lower Australian dollar.
“This government has been committed to getting a better return to the farm gate, keeping Australian farming families on the farm and making sure that people are treated with dignity as they do their bit for our nation, feeding our cities and earning our export dollars.”
We will ‘name and fame’ banks: Katter
Katter Australia Party leader Bob Katter updated his pledge to “name and shame” banks that foreclose on farmers over the next four months, following the announcement by ANZ Bank this afternoon.
Speaking in Cairns, he said he will now “name and fame” the ‘good guys’.
“Our name and fame goes to the ANZ,” he said.
“To the others, we warn you, we’re starting now.
“Every time you do sell up a farmer, we’ll name you.
“To sell a property at the end of the dry season, before the wet season and before the Chinese and Indonesian markets kick in next year, it is a bastard act.”
“There are now many commentators putting enormous pressure on the Federal Government, including Alan Jones. There have been over 2 million hits on the Dr David Pascoe Facebook page containing his heart breaking open letter – that is 10pc of the Australian public.
“From now on it’s Name and Shame and also Name and Fame.”
AgForce welcomes moratorium
AgForce Queensland also welcomed ANZ Bank’s move to implement a new support package for farmers affected by drought in northern and western Queensland and northern NSW.
Producers in these areas will have a reprieve from their loans until January 2016, in an attempt to address the current farm debt challenges within the state.
The announcement includes a moratorium on new farm repossessions until December 2015, a 12-month commitment not to increase interest rates on distressed farms, interest rate relief in cases of extreme distress, financial assistance to support farmers choosing to relocate off the land and increased funding for rural counselling focussed on towns hardest hit by drought.
AgForce General President Grant Maudsley said this move from ANZ has come after Federal Agriculture Minister Barnaby Joyce handed the banks an ultimatum to cease forced repossessions or risk government intervention.
“This stand from Minister Joyce follows a farm finance forum held in Canberra in September, involving the major lenders and industry groups, including AgForce, to address debt challenges within agriculture” Mr Maudsley said.
The announced package goes towards a number of the immediate actions proposed by AgForce at that forum, including:
- The urgent additional resourcing of the Rural Financial Counselling Service
- Developing agreed plans with lenders for challenged businesses to achieve a reduced risk profile and enable non-viable businesses to exit with maximum capital and dignity
- Lenders and government to develop exit and adjustment packages
- Lenders to undertake a review of current agricultural lending policies and practices, including proactive management of distressed agricultural loans
View the full list of AgForce recommendations here.
Mr Maudsley said the unexpected move by ANZ will provide time for producers to either hopefully recover after some long awaited rains or make the decision to sell and exit their businesses with dignity.
“We have been in the grips of drought for three consecutive years, which now continues across 80 per cent of Queensland, and this has added significant, ongoing financial pressures on many producers,” he said.
“We hope the other banks will follow suit in providing some breathing space for farmers with distressed loans, and urge the government to continue to work with lenders to develop more farmer friendly lending practices.”
Despite welcoming the response from ANZ, Mr Maudsley said there are some practical considerations about how the announcement will take effect.
“AgForce looks forward to seeing how ANZ and other banks taking similar steps will ensure that any increased costs to the lender are not passed on to other borrowers, and how farm capital will be preserved over the next year while the moratorium applies,” he said.
AgForce continues to engage with the state and federal governments about a whole range of practical assistance measures that will be required to address the current severe drought and debt challenges.
Barry O’Sullivan proposes legislative protections for drought-impacted farmers
Queensland Nationals Senator Barry O’Sullivan has begun seeking support from his parliamentary colleagues for a Private Senator’s Bill that will stop major rural lenders from enforcing penalty interest rates and foreclosing on drought impacted farmers.
Senator O’Sullivan said the bill, which is called the Drought Affected Farm Business Bill, states that whilst a farming property was under declared drought (based on the definition of a one in twenty year drought event), a bank or financial institution cannot;
- Apply penalty interest rates.
- Foreclose on an agricultural business simply due to a collapse of the loan value ratio (LVR) covenant of the terms and conditions of the loan agreement.
Additionally, if a bank or financial institution decides to foreclose on a borrower for any other breach of a covenant, term or condition, they cannot bring effect to the foreclosure until one year after the business is no longer declared to be in drought.
“Landowners across Western Queensland are hand feeding cattle in this drought while they also fend off plagues of kangaroos and wild dogs,” he said.
“Yet every time these farmers put their hands in their pockets, they find their bankers’ fingers there.
“Some people across the bush are on their knees due to the worst drought in a century – and the banks continue to kick these people when they are already down.
Senator O’Sullivan’s announcement comes following strong warnings from Federal Agriculture Minister and Deputy Leader of The Nationals Barnaby Joyce in The Australian that government intervention may be necessary to force the banks to be more fair, decent and patient with rural landholders.
It also comes days after the release of the Murray Report, which has recommended several significant reforms to the banking sector.
“The Drought Affected Farm Business Bill will reduce an abuse of power by the banks and allows landholders to keep some of their dignity,” Senator O’Sullivan said.
“I have been working on this Private Senator’s Bill over the past couple of months because government needs to intervene to protect family farms and rural communities.
Senator O’Sullivan said he had written to the Australian Bankers Association, which would “leave them with no doubt about my resolve on this issue.”
“I have actively campaigned since taking my Senate position for the major banks to end its sledgehammer approach to dealing with rural debt loans.
“The banks have continued to be obstructionist and have denied almost every reasonable request. I warned them some months ago that time was up!
“All the while more and more farmers have been driven to the wall.
“The banks are living up to their reputation of being unreasonable bastards.
“The banks could reprieve their position by ending its application of debilitating measures, such as penalty interest rates, that only serve to drive people further down the road to financial and emotional collapse.”
Source: Federal Agriculture Minister Barnaby Joyce; Katter Australia Party leader Bob Katter; AgForce president Grant Maudsley; Qld Nationals Senator Barry O’Sullivan