LOCAL farmers have the big banks in their crosshairs, with a radical plan for a new fund to drought-proof the country.
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Oura farmer Leigh Campbell has spruiked a new agricultural development bank – a farmer’s co-op for finance – to safeguard the value of produce and take on the big two supermarkets.
The timber miller and hardware store owner wants primary producers to wrest control from “a conga line of totally ineffective hangers on”.
“For finance we pay a premium because individually, we are little fish with big business issues, dealing with self-serving banks,” he said.
“Because of enormous variables, farmers are forced to pay interest rates well above what homeowners pay.
“It may be local banks could be interested, though their track record suggests they would quickly lay the boots in if they could see an opportunity to grub extra money from us.”
Mr Campbell’s grand vision goes beyond a line of credit, with plans for levies on produce to fund a national stockpile of fodder, private infrastructure and eradicate pests.
“(After drought) the first thing to happen is a big sell off of stock, which in turn affects every farmer in the country by lowering prices,” he said.
“I propose we pay an additional 1 per cent, which will go into a fund to be used to cover any borrowers unable to pay their interest because of drought, flood, and fire, so the lender is in a position to give better rates.”
President of the Murrumbidgee Valley Food and Fibre Association Debbie Buller lauded the initiative, harking back to the days of Rural Bank of New South Wales before it was “gobbled up” by the Commonwealth Bank.
“Under normal banking practices, farmers are often forced to sell goose that lays golden egg at the wrong time to pay back loans,” she said.
“A development bank wouldn’t force farmers to sell and when things turn around – which they always do – they can pay loans back way faster.
“Modern banks don’t understand farming is a long-term investment, which doesn’t work to the financial year calendar.”
Wagga councillor and Borambola farmer Alan Brown backed “anything to change the lending landscape” but warned of risk exposure.
“It comes down to banks adding additional interest to mitigate risk, which is something they have to do, otherwise bad debts can become sufficient to ruin entire organisations”.