Country's biggest rural lender launches workshops on farming corporate governance

Country's biggest rural lender launches workshops on farming corporate governance

The National Bank, the country's biggest rural lender, is launching a series of workshops aimed at improving farmers' business skills.

The bank, part of the ANZ New Zealand group, says its "Tools for Business Growth” programme will feature workshops run by James Lockhart, Massey University’s Associate Pro Vice-Chancellor for Executive Education. It says the workshops will provide expert advice including on governance and management, strategic planning and implementation.

Initially piloted in Palmerston North and Christchurch, the workshops will be taken to 11 other regions before year's end targeting leading farmers already running successful businesses looking to grow further. BNZ has also been running similar corporate governance guidance programmes for farmers.

They come at a time of growing concern about rural debt levels highlighted by the plight of the Crafar farms, which were placed in receivership last October with Westpac, Rabobank and PGG Wrightson Finance owed about NZ$200 million.SBS Bank CEO Ross Smith told this week his bank was probably turning down more business opportunities than it was approving in the rural sector because of debt related stress.

Smith said although SBS's exposure to highly geared parts of the industry wasn't high, debt in the agriculture sector was of concern more broadly for the country.

"There is significant volatility in pricing mainly because we're so reliant on the overseas markets and the underlying currencies that they're buying in," Smith said.

"And I guess those investing in the businesses have to be a little bit more cautious in the future and make certain that  they can service that debt. But in saying that I think some of the banks were probably a little over aggressive in wanting to lend to them as well,' Smith added.

Charlie Graham, the National Bank's managing director of rural banking, noted farms had become bigger and more complex. There was a widely recognised need to develop governance to complement farm management skills, he added.

"It is really important that farmers take a step back from time to time and work on their business as opposed to in it," Graham said.

The National Bank's workshops would better prepare farmers to establish the right business structures, making sure they had the appropriate financial and other systems in place to seize opportunities.

"If our rural businesses can grow, this in turn helps drive the agricultural industry forward,” said Graham.

The National Bank says it has lent more than NZ$2 billion to the rural sector over the past year.



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