Rural Bank discount popular

Press, 17 December 1986, Page 2

Rural Bank discount popular

By

MARTIN FREETH

in Wellington

The Rural Bank has discounted the mortgages of more than 500 farmers under the Government’s debt restructuring scheme.

The Minister of Agriculture, Mr Moyle, yesterday extended the scheme for another six months because of an overwhelming response from farmers. Up to a week ago, 3322 applications for mortgage discounting had been received and in 502

cases, some debt to the bank had been written off.

The bank yesterday declined to disclose how much of the $9O million of mortgages in those cases had been written off. The life of the scheme, launched in the Government’s farm package in July, has already been extended from three to six months because of a slow response initially. Mr Moyle said that as more farmers successfully

went through a restructuring of their debt, others were attracted to the scheme and demand had built up.

Rural Bank discounts have been offered to entice other creditors to help farmers stay on their land by writing off some debt themselves, lowering interest charges, or deferring repayments. Mr Moyle said the scheme had now shown its real worth and no farmers should miss out because of an arbitrary

cut-off date. All applications received up to next June 30 would be considered by the bank. Dairy farmers in particular should have more time to apply for debt restructuring since their budgeting and hence awareness of financial problems was delayed until the start of their season, Mr Moyle said..

Of the total applications, 1095 have been from dairy farmers, 2022 from sheepfarmers, and

205 from others. Of the applications processed by the bank, 130 have not resulted in some discount being made, in many cases because all the creditors to a farmer could not agree on a restructuring package. The Minister said the bank had appointed 12 more people to deal with applications.

The extension of the scheme would now take some pressure off the bank and also off farm accountants.