19 Jul Loan interest costs becoming a burden
According to an analysis by Neil Clark & Associates (NCA) of ABARES data, loan interest payments in the agricultural sector have risen to almost $5 billion per annum, equating to 12% to 14% of farm income.
NCA consider the associated level of debt to be unsustainable, especially if land values remain subdued or fall.
Robinson Sewell Partners recognise that a percentage of this overall financial commitment is due to agricultural producers adopting borrowing packages that are inefficient and inflexible to meet the changing financial needs and fundamental dynamics of their business. A financial health check can easily restructure these borrowings to a more streamlined cost efficient package to the benefit of the producer by a material margin.