AS the new year unfolds, we take a look back at the issues that defined agriculture in 2014. This week, the ongoing rural debt crisis which farmers fought to have addressed:
One in three in debt
In February 2014, the banks insisted Australia's rural debt meltdown didn't exist, but others close to the farm finance sector said at least one in every three farming enterprises was now in trouble with a debt blowout, or soon would be.
Drought in eastern Australia had made a precarious situation worse in the past year, but the big dry wasn't the only problem. Farmers had spent the past decade losing the terms of trade battle against rising farm costs while struggling with poor earnings, higher cashflow expectations from their banks and static or sliding land valuations.
Debt-stressed farmers pinned their hopes on proposals for the Reserve Bank of Australia (RBA) to offer a low interest alternative to the nation's deep-seated rural loan problems.
The banking industry was not convinced the idea of the Australian Reconstruction and Development Board (ARDB), proposed by Senators Nick Xenophon and John Madigan, was a realistic answer to dealing with problem debts.
But four of the big rural lenders had changed their tune by March, conceding the need to re-examine debt management policies at a crisis forum in drought-fatigued North Queensland with assistant federal Treasurer Arthur Sinodinos and State management representatives from National Australia Bank, Westpac, Rabobank and the ANZ Banking Group.
Banks get real
In April, the banks came under increasing pressure to impose a moratorium on penalty charges for rural enterprises and farms.
The Liberal National Party (LNP) Senator Barry O'Sullivan weighed into the debate that month, calling on the federal government to initiate a national survey into rural debt because the banking sector was refusing to divulge State-specific or regional breakdowns.
A message for Canberra
By August, Queensland LNP Senator Matthew Canavan was calling for a federal parliamentary inquiry into rural debt, which he said was an urgent issue being "ignored" by his urban colleagues.
Sick of waiting for government to act, Queensland graziers Barry Hughes and Rob Atkinson took a no-nonsense message to Canberra about the worsening social and economic conditions. With 70 per cent of their State now drought declared, it was impossible to separate drought and debt in the ongoing debate.
Politicians and lenders were soon to claim a need for data, and the unambiguous results of a survey by the Gulf Cattlemen’s Association showed there'd been a 28pc decline in property values since the Indonesian live export suspension in June 2011, coupled with a 22pc increase in debt.
Government responds
A rural debt roundtable meeting was finally held in Canberra during late September, chaired by federal Agriculture Minister Barnaby Joyce and involving 40 key stakeholders, including rural banks, farm groups and government departments.
Mr Joyce said collecting factual data to ascertain the scale of the debt problem - from the gulf of Queensland down to northern NSW - would be handled by the Australian Bankers Association (ABA), National Farmers Federation (NFF) and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), with input from the Gulf Cattlemen's Association.
He committed to a “re-tweak” of the $700 million drought and farm viability loans and said he would give the issue his “best endeavours … knowing full well that approval doesn’t just rest with me”.
In October, a new economic publication urged Canberra to immediately address the rural debt crisis before too many more farmers were forced off the land.
By the middle of November, rural lenders had undergone a major transformation in attitude and were now “listening” to farmers’ concerns, according to Barry Hughes of the Gulf Cattlemen's Association.
Amid calls for a moratorium on banks foreclosing on struggling farms, Agriculture Minister Barnaby Joyce and outspoken radio host Alan Jones attended a rural debt crisis meeting in Queensland in early December.
The forum at Winton was also attended by Queensland independent MP Bob Katter, who said the meeting was not designed for politicians to “shoot their mouths off” but for “the people to have their say to the Australian nation”.
Foreclosure fears end the year
The intensifying heat from the farm debt debate prompted a flurry of December activity from bankers trying to quell fears of farm foreclosures and ballooning debts across drought-stressed rural areas.
The Australia and New Zealand (ANZ) Banking Group was praised by the National Farmers' Federation (NFF) for promising a 12-month moratorium on farm repossessions in drought-troubled northern and western Queensland and North West NSW.
Big farm sector lenders National Australia Bank (NAB) and Rabobank also scrambled to allay concerns about the extent of bank foreclosures.
by ANDREW MARSHALL
THE banks insist Australia's rural debt meltdown doesn't exist, but others close to the farm finance sector dispute that view.>>>Read more...
by ANDREW MARSHALL
BANKS say there's no farm debt blowout to panic about, but four of the big rural lenders have conceded the need to re-examine policies.>>>Read more...
by ANDREW MARSHALL
SENATOR Barry O'Sullivan says banks are deliberately stonewalling farm sector efforts to release figures on Australia's rural debt problem.>>>Read more...
by COLIN BETTLES
A FEDERAL parliamentary inquiry into rural debt is desperately needed, says LNP Senator Matthew Canavan. >>>Read more...
by COLIN BETTLES
INTENSIFYING drought sparked a heated debate in Canberra this week about escalating rural debt and calls for an overhaul of bank lending.>>>Read more...
by COLIN BETTLES
THREE key resolutions have been agreed on at the rural debt roundtable, including restarting the national rural debt mediation process.>>>Read more...
by COLIN BETTLES
RURAL lenders have undergone a major transformation in attitude since a high-level rural debt roundtable meeting was held in late September.>>>Read more...
by ANDREW MARSHALL
