Friday, July 8, 2022

Fieldays: Compliance loans on track

About 100 farmers have taken an ASB Rural Environmental Compliance Loan to improve their properties for compliance or industry good reasons, ASB rural banking general manager Mark Heer says.

Heer spoke to customers at an ASB breakfast on the opening day of the Fieldays. He told Farmers Weekly that ASB has been happy with the number of loans issued and said there are more in the pipeline.

For a lot of farmers, environmental compliance is a long-term project with two to three years planning involved before implementation.

The Rural Environmental Compliance Loan is a New Zealand-first which has been developed to provide a low-cost funding option for farmers looking to invest on-farm to upgrade their environmental compliance systems.

The loan is priced at ASB’s cost of funding with no additional customer margin applied.

While most of the loans have gone to dairy farmers, Heer said about 15% have been given to drystock and cropping farmers.

The loans have averaged $120,000 which is between the $100,000 and $200,000 estimated that farmers need to spend on environmental improvements.

The number of loans taken was what ASB expected and hasn’t been affected by the drought. Heer said there is confidence in the market despite a hard season for sheep and beef farmers.

There is a lot of positivity, especially for dairy farmers, with Fonterra announcing its $7 forecast payout and ASB predicating interest rates to remain low.

“We are probably still in for another year of reasonably favourable rates. We are really not forecasting any lift in interest rates, from an ASB point of view, until the end of March 2014.”

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