Credit squeeze getting worse as pressure intensifies
The wider banking crisis and the plight of homeowners unable to meet their mortgage repayments is rightly a matter of much discussion in the media. It tends to mask, however, the difficulties caused by a general credit squeeze on business and farming.
The main banks have been quick to argue that they have ring-fenced hundreds of millions for farm loan consolidation, farm development and land purchase. This is true, but the funding tends to be more readily accessed by a small cohort of the most progressive or financially strong farmers. In any event, the credit squeeze is not all about banks; it is also linked to the relationship between farmers and their other traditional creditors, such as merchants who supply them with feed, fertiliser and hardware, and co-ops.
