Farm lenders ‘near limit’

Press, 24 April 1986, Page 4

Farm lenders ‘near limit’

By

MARTIN FREETH

in Wellington Pressure is building on the Government to deliver policies which will ease the cash problems of debt-burdened farmers. Stock and station companies warned yesterday that they would limit lending to farmers if high interest rates and low product prices continued. “If this trend continues it will stretch company liquidity and client lending will have to be curtailed,” said the general manager of the Stock and Station Agents’ Association, Mr Vince Connolly. The companies were seriously worried about the level of advances they had had to make in recent months, due in part to problems in the meat industry but mainly to the wider economic climate,

Mr Connolly said. The companies would be reluctant to limit lending because of the impact on the rural sector, but the limit to their capability to lend was now in sight. The Prime Minister, Mr Lange, indicated this week that the Govern-ment-appointed working party on farm debt financing would make proposals next month, but he warned that new policies would not provide simple solutions. Sources suggest the working party is examining overseas borrowing by the Rural Bank as a source of funds to refinance private sector debt in the farming sector, and also guarantees on the deficits being run in the business budgets of farmers.