Bank support for Agribusiness grows to $104.7b

Bank lending to Australian agribusiness has increased by almost a third during the past year to $104.7 billion as of September this year as the sector bounces back from the drought years and is buoyed by strong global commodity prices.

The ABA Agribusiness Report 2022 shows new bank lending to Australian farmers hit record levels with a 29% increase in average monthly lending to $4.2 billion in the 12 months to February 2022.

Speaking ahead of National Agriculture Day on Friday 18 November, ABA Chief Executive Anna Bligh said the picture for the Australian agribusiness sector, supported by Australian banks, looked healthy and the industry outlook is positive despite the global uncertainty and recent flood events.

“Australian agriculture, and the vibrant agribusiness sector it supports, pushed through COVID-19 relatively unscathed and the sector remains well positioned to contribute to growth in the economy,” Ms Bligh said.

“As we enter a new era of economic challenges, banks will continue to collaborate with the agribusiness sector.”

ABA CEO Anna Bligh

“Macroeconomic conditions across the agribusiness sector are very positive, and as the farming sector recovers from recent years of drought, and experiences favourable seasonal conditions in parts of Australia not affected by floods, the industry is expected to continue its growth with strong prices across a range of agricultural commodities,” she said.

“Despite coming off all-time highs, the value of Australian crop exports remained significantly above the long-term average in September 2022. This is an indication of the continued demand for goods produced by Australian farmers”.

Invested in success

Australian banks are deeply invested in the success of Australian agribusinesses and in regional communities more broadly. Support provided by Australian banks to the agribusiness sector includes:

• Access to finance for property purchases and working capital;
• Financial support to help farmers prepare for drought;
• Provision of finance to participate in government programs to purchase new farm machinery;
• Access to farm management deposit accounts to assist primary producers manage cash flow fluctuations.

Helping communities

Banks are also working to help communities impacted by recent natural disasters. This week, the ABA visited flood impacted communities to learn more directly from customers impacted by floods. Measures to help customers impacted by natural disasters include:

• Deferring scheduled loan repayments, on home, personal and some business loans for up to 3 months;
• Waiving of fees and charges, including for early access to term deposits;
• Debt consolidation to help make repayments more manageable;
• Restructuring existing loans free of the usual establishment fees;
• Offering additional finance to help cover cash flow shortages;
• Deferring upcoming credit card payments;
• Emergency credit limits.

Continuing to collaborate

“As we enter a new era of economic challenges, banks will continue to collaborate with the agribusiness sector, governments and industry stakeholders to ensure product and service offerings support the needs of Australian agriculture long into the future,” Ms Bligh said.

The Report found that average monthly lending to small agribusinesses also grew 7% to $280 million from $261 million in the 12 months to February 2022.

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