ANZ New Zealand, the country's biggest rural lender, says it has doubled its support package for start-up loans for young farmers to NZ$120 million over five years after an "overwhelming" response to the initiative it launched last November.
ANZ, whose Australian parent said in its recent first quarter trading update that New Zealand lending contracted 0.7% in the three months to December 31, says an "overwhelming" response to its initiative means about 100 new farmers are expected to take up packages by the start of the next farming year in June, with the package assisting new farmers get started in their first independent farming position such as contract milking or leasing land. Up to NZ$50,000 of an applicant’s loan may be unsecured.
The initiative comes with Reserve Bank sector credit data showing agriculture debt fell 0.5% to NZ$47.332 billion in 2011, which is a long way from lofty levels of growth in recent years peaking at 23% in early 2009.
With the average age of a New Zealand farmer topping 50, ANZ analysis suggested in November that the amount of capital required by the next generation to buy a farm had risen above NZ$1 million, forcing many to seek other careers with the bank warning New Zealand faces a lost generation of young farmers who can't raise the capital to take the first step towards a farming career. Because of this, ANZ says it launched the start-up package to help farmers take their first steps towards farm ownership.
“Since ANZ (which includes the National Bank) launched the package in November we’ve had over 200 aspiring farmers attend six start-up workshops, with up to 20 more workshops planned around the country between now and June. Some 55 packages are already approved or in process, meaning new farming careers are already underway,” ANZ’s commercial and agri managing director Graham Turley said.
“Young farmers need capital to buy livestock or for seasonal finance to cover the first months of a milking contract. However, many don’t have the security to raise the necessary cash. Without help they have little choice but to turn their backs on the industry they want to be a part of, and in which they could have built a successful, long-term career. That isn’t good for young farmers, and it isn’t good for the future of New Zealand farming.”
Turley says demand is expected to exceed the initial NZ$60 million ANZ earmarked for the programme.
“It’s fantastic to see enterprising young farmers stepping up to help bridge the generation gap emerging in New Zealand agriculture. We will respond by doubling the amount available for farm start-up loans to NZ$120 million over five years," he says.
“We see this as a further investment in New Zealand as we help skilled young people take a first step as they seek to develop business skills, accumulate capital, and take over as older farmers retire.”
Turley says the offer is designed to help new farmers get started in their first independent farming position, for example as a contract milker or in leasing land, as a first step towards raising further capital and buying a farm.
ANZ/The National Bank - Farm Start-up Package
A major commitment to new lending to farmers taking their first steps into agriculture – offering at least NZ$120 million over five years
Up to NZ$50,000 of an applicant’s loan may be unsecured
A free business and personal account for the first 12 months of the business
Expert coaching from ANZ and The National Bank Agri Managers on submitting an application, including budget, cash flow, and business plan
Seminars across New Zealand on achieving long-term farming goals, such as getting onto your own farm or running a large-scale share milking operation.
Turley says the seminars focus on achieving farming goals, such as getting onto your own farm or running a large-scale sharemilking operation.
"The loans can be used to provide income in the first few months of a milking contract, for example until a seasonal payment kicks in, or towards livestock and essential farm machinery such as a tractor or farm bike. Many of the packages are expected to be taken up for contract milking. But they are available to young farmers be they sheep, beef, dairy or horticulture."
5 Comments
I went to a bank meeting years ago and I was the youngest in the room. The area manager went on to note that the average age of a farmer was over 50, 10 years later they told me it was 58, 5 years on and its back to 50. I am 50 and often the youngest in the room, it's great to still be called a young farmer. I suspect that the average landowner is over 60.
I have talked to various bankers and they are all worried that when the present batch of farmers retire there will be no young farmers and other idiots prepared to pay the ridiculous price for land and slave away for a %2 return until their bodies give out. Now day's the wife shoots through with half the farm while she is still young enough to enjoy the windfall. As they say, adultery is the way we half the value of our assets.
Its a big problem for the banks but an easy fix is to let industrious young Chinese in, I hear the peoples bank of China is happy to support its young onto the land and the banks get to keep the loot.
It will be interesting to see whether 'NZ Young Farmers' have the guts to inform young farmers...if they find any...to stay well away from the filthy credit...No way will National risk an open door farm sale to foreign interests policy after the Crafar farce and the 014 elections closing in...so the best option for Kiwis is to sit tight and watch the values plummet...Only the stupid will kiss the bankers ring.
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