Bank upbeat about farming clients’ financial state

DROUGHT WORRIES: Farmer Ryan Matthews surveys a field of dried maize plants in a field in North West
DROUGHT WORRIES: Farmer Ryan Matthews surveys a field of dried maize plants in a field in North West

FIRST National Bank (FNB) said yesterday it remained optimistic about the financial wellbeing of its farming clients, despite statements from agricultural interest groups and unions about the effect of the drought on farmers.

This‚ the bank said‚ was because the true severity of the current drought would only be realised in the coming year.

For now, it appeared that FNB was expecting the recent rains to allow Mpumalanga maize producers, who had already completed 75% to 80% of the planting, to finish the job soon‚ while farmers in North West and Free State still had time to plant.

Good rains within the next month‚ with follow-up rain later during the production cycle‚ could see farmers harvesting a reasonable crop‚ the bank said.

“However‚ if dry conditions persist‚ the outlook for an average to good crop will undoubtedly deteriorate,” FNB Business Agriculture’s Dawie Maree said.

“FNB continuously consults with various industry experts to get an indication of possible changes in weather patterns and planting conditions in order to proactively assist clients.”

The bank said it was not overly concerned about a substantial increase in farmers who may not be able to meet commitments.

“Our book is very healthy‚ well diversified and many farmers have the ability to increase gearing levels slightly.

“This will enable the bank to review individual needs on merit with the view to possibly restructure or refinance facilities of farmers in need‚” Maree said.

He said the impact would be much wider than just the agricultural sector.

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