ANZ, bowing to pressure, offers relief to drought-hit farmers

Written By Unknown on Kamis, 11 Desember 2014 | 16.47

SYDNEY Thu Dec 11, 2014 12:36am EST

SYDNEY Dec 11 (Reuters) - Australia and New Zealand Banking Group on Thursday announced measures to ease financial burden on drought-hit farmers in Queensland and New South Wales states, bowing to government pressure to stop farm foreclosures.

Federal Agriculture Minister Barnaby Joyce issued an ultimatum to the country's major banks, telling them to stop throwing drought-stricken farmers off their properties or risk government intervention, the Australian newspaper reported.

Most of the country has seen below average levels of rainfall over the last two years, data from the Australian Bureau of Meteorology shows, with the eastern states of Queensland and New South Wales particularly hard hit.

The drought has forced record slaughtering of cattle and is likely to hit production of wheat, cotton and canola, while output of summer crops such as sorghum, hay and corn is set to fall to five-year low.

ANZ's package includes a moratorium on new farm repossessions until December 2015, a 12-month commitment to not raise rates on distressed farms and interest rate relief in cases of extreme distress.

It also includes financial aid to support farmers choosing to relocate off the land.

"While taking possession of a farm is always the last option after all other avenues have been exhausted, we feel it's prudent to take a pause on any new action," ANZ CEO Australia Philip Chronican said in a statement.

"While we don't know when this drought is going to break, we do know that many farming families have the capacity to be successful again in normal conditions," Chronican added.

Barry O'Sullivan, a senator from Joyce's rural based National Party, said he was seeking parliamentary support for legislation that will stop major rural lenders from enforcing penalty interest rates and foreclosing on drought-hit farmers.

"Some people across the bush (outback) are on their knees due to the worst drought in a century and the banks continue to kick these people when they are already down," O'Sullivan said.

ANZ, Australia's third biggest bank by market value, has lent A$30 billion ($25 billion) to the rural, fishing and forestry sector across the country, of which 2.5 percent was seen as under "financial stress" as of mid-September. ($1 = 1.2011 Australian dollars) (Reporting by Swati Pandey; Editing by Michael Perry)

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