RBNZ stats for Jan show farm lending fell NZ$7 mln; business lending rose NZ$267 mln; household lending rose NZ$320 mln

Makes a mockery of all the spin and bs the banks have published lately about how they are here to support rural sector . Rural lending down, so what are the banks going to do, force more sales to further reduce land values to 1970 values and then wait for new people to enter in the market. Who is going to be left to carry on farming?

Interesting spin on it Janette, seems to me that the biggest portion of the debt is in the Dairy sector and given the solid payout forecast and a season that in most areas while not great is not too bad, that farmers are generating a profit and paying down some debt. Surely this is a good thing for their balance sheets given that the bubble has burst in most property sectors.

I really would have thought this was a good thing, but obviously not only the evil banks that like to put spin on things.

Chuck I know what I am talking about as I have just sold my farm and If you are implying that I am putting a spin on things to do with rural sector debt have a good look at banks disclosure docs and see the level of impaired debt and despite the higher payout etc banks are still forcing farmers to sell. As usual people that have no knowledge of the rural sector think that farming in this country is only about Dairy sector business. What people like you don't understand is that as land prices fall more and more farmers have debt equity issues which compounds the problem.If you are interested in getting a good overview of things rural have a look at sector report Part one and two Country 99TV.While you are at it read Basel II accord and Basel III and maybe some reserve bank articles in the Bulletin.

The point I was trying to make was that there is a bigger picture here, the gfc, banks disclosures,the effect on the economy, uncertainty about future commodity prices, a sheep and beef sector still looking for better industry solutions, and rising costs of production. Banks were lending to get market share and yes some people over borrowed but there are a lot of farmers that are working extremely hard and are getting no where and bank pressure is making it even harder with clamps put on so their productive base is shrinking.

Had a phone call this morning 3 farms for sale and local bank managers put through offers for credit control to approve and all three turned down. The local guys thought they had put together a viable package.I know of many young people that are being turned of farming as an opportunity because of the lack of certainty in the job.Some of the tenders I got were scaringly low and if that is an indication of where farm values are going to fall too then famers will have lost 60% equity and as a country can we allow that to happen. People that have equity at 30% will then find their equity shrinking and another lot of landowners will have banks breathing down their necks.