Rabobank announces 'a range of support measures' for clients affected by drought; cites four specific deferrals and waivers

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Agribusiness banking specialist Rabobank has moved to reassure clients impacted by drought conditions in the North Island that it will work to support them through the current difficulties.

Rabobank regional manager East Coast George Murdoch said the bank would work alongside its farming clients affected by the current severe dry conditions in many areas of the North Island, to mitigate the impacts of the drought and ensure farmers were well positioned to rebuild production and their financial position when seasonal conditions improved.

The Hawke’s Bay area – which has experienced one of the driest summers on record – was officially declared a drought zone last week, along with South Auckland, Waikato and the Bay of Plenty, with Northland drought-declared late last month.

A number of other regions throughout New Zealand are also suffering very dry conditions.

Mr Murdoch said as a specialist in agriculture, Rabobank took a long-term view and understood that climatic extremes, like the current drought conditions, were part of the business of farming.

“We’re committed to supporting clients wherever we can through periods of difficulty, such as major weather events, and, as we have done in the past, we’ll work on an individual case-by-case basis to assist them through problems resulting from these events,” he said.

Mr Murdoch said clients in applicable circumstances would be eligible for a range of support measures, including:

• deferral of scheduled loan payments

• waiving of break costs on early redemption of deposits

• waiving of fees on loan increases necessary to assist in rebuilding operations and

• waiving of fees for equipment finance variations.

Rabobank’s rural loans were also specifically designed for farmers and offered financial flexibility to help manage through times of difficulty. “Loan products, such as the interest-only Rabobank All in One facility, are designed to maximise cash flow availability during adverse circumstances, including drought,” he said.

In addition, the bank was investigating other practical initiatives to assist farmers on the ground with hardships resulting from the drought.

Mr Murdoch said stock prices were falling rapidly and supplementary feed costs had risen sharply in recent weeks and, while the financial impact of the drought would be felt for some years to come, the immediate concern was for farmer wellbeing.

Mr Murdoch said Rabobank employees had been contacting clients in drought-affected areas to offer the bank’s assistance.

He called for impacted clients who have concerns and had not yet spoken to the bank to contact their local rural manager or branch. The bank’s support measures would be extended to clients in all regions of New Zealand impacted by drought.

Rabobank said it was experienced in working with farmers around the world in drought conditions, including long-term droughts in Australia through the last decade, and more recently in the United States and parts of South America and Europe.

“We understand that as devastating as these conditions can be, they are a fact of life for agriculture,” he said. “And these short-term challenges notwithstanding, the longer-term outlook for New Zealand agriculture is very sound.”