Farmers want to see rate cuts passed on
The NSWFA wants to see the cut, which has reduced the base rate to 3.25 per cent, passed on to farmers and agribusiness customers soon and in full. NSW Farmers' Association President Jock Laurie said agriculture needed these incentives to continue contributing some $36- billion annually.
“Recent revisions in economic forecasts indicate that Australia is likely to have negative growth of -0.2 per cent this year, so there has never been a greater time or need for the cuts to be passed on,” Mr Laurie said.
Today's interest rate cut is the fifth cut by the RBA in as many months, totalling 400 base points. At the same time, repeated calls from rural Australia to pass the cuts on to farmers appear to have fallen on deaf ears, with many commercial borrowers in the farming sector failing to announce corresponding reductions in their loans.
“A failure to pass on interest rate cuts is a failure by lenders to support farmers and the agricultural industry,” Mr Laurie said.
He said while most variable home loan rates had been reduced in the past five months, most commercial borrowers in the farming sector had not passed on the cuts in full, despite the economy being on the verge of recession, a situation most of our major trading partners, including the US, Japan and Europe, were already in.