The news of prominent wheat farmer and chairman of Rural Debt Roundtable working group, Rowell Walton, being placed into receivership reveals the irony of almost every Australian farmer and their debt with banks.
It also demonstrates the fragility of agriculture which depends on debt finance provided by often avaricious trading banks whose only social responsibility is to their shareholders.
Last Friday the ANZ bank sent in receivers Korda Mentha to take over Mr Walton’s four dress circle, black soil wheat growing properties in the Dulacca and Tara regions of the western Darling Downs.
Farm property values have seriously declined since the financial crash of 2008 and recent drought, which in turn eroded Mr Walton’s equity to loan ratio, making him, at least on paper, unviable, languishing with a $30 million debt.
For many years farmers and other rural interest groups have campaigned for the establishment of a national development bank that issues credit to primary industry at a minimum, low, fixed interest rate, in a similar mode to the original charter of the Commonwealth Bank. Low cost finance ensures food production security which is directly tied to the sovereignty of the nation.
Unfortunately the party duopoly is largely controlled by the financial and oil sectors and financial industry legislation drafted by the ALP/Liberal nexus over decades has always been in favour of the banks.
Seldom do individual farmers who have the fortitude to take on a bank, ever get a win in a court, and one only needs to hark back to the similar plight of Marlborough wheat farmer George Muirhead in the early 90’s
It should be noted that the Senate Inquiry into the establishment of the Australian Reconstruction and Development Board designed to buy toxic farm debt at a discount from trading banks has been reviled by Chairman of the Reserve Bank Glen Stevens and predictably by the Australian Bankers Association.
In fact in a veiled threat from the ABA in its submission to the Senate Inquiry, it promised to punish those borrowers with higher interest rates and other penalties should the ARDB be put into operation.
Total farm debt is said to be more than $66 billion which, in effect cannot be repaid even by the forced sale of every mortgaged property held in the banking industry portfolio.
We must set up the ARDB with its intended charter, not some watered down version acceptable to the banking industry and the ALP or Liberals.
I have been working closely with Mr Walton, Bob Katter and Dr Mark McGovern of the QUT Business School of Economics and Finance to ensure the ARDB is established.
Farmers don’t want more loans from the government or banks. They can’t pay off the huge burdens they have now! The ARDB presents the only way out for primary industries.
Dairy farmer and National Chairman, Katters Australian Party.