As Australia recovers from the pandemic and businesses seek out new opportunities, new bank research reveals that lending to Australian agribusiness has increased by almost a third over the last year.
According to new bank data in the Australian Banking Association Agribusiness Report 2022, in the 12 months to February 2022, ABA member banks lent an average of $4.2 billion to agribusinesses across the country every month, a 29% increase in the average of $3.2 billion lent per month the previous year.
On top of that, average monthly lending to small agribusinesses grew 7% to $280 million from $261 million in the 12 months to February 2022, compared with the 12 months to February 2021.
Australian Bank Association (ABA) Chief Executive Anna Bligh said that while the global economic environment did remain uncertain, the picture for the Australian agribusiness sector, supported by Australian banks, looked healthy and the industry was forging ahead with confidence.
Positive outlook for the agribusiness sector
“Australian agriculture, and the vibrant agribusiness sector it supports, pushed though COVID-19 relatively unscathed and the sector is now well positioned to play a leading role during this longer-term recovery period,” Ms Bligh said.
“Macroeconomic conditions across the agribusiness sector are very positive, and as the farming sector recovers from recent years of drought, ideal seasonal conditions have resulted in bumper crop yields and strong prices are being experienced across a range of agricultural commodities.
“Further, ABS data released this week highlights that the nation’s economy is also recovering more broadly, rising 0.8% in seasonal terms over the March quarter, with GDP up 3.7% and terms of trade also growing by 5.9%. This follows a rise of 3.6% in the overall economy in the previous December quarter.
Banks & agribusiness: strong relationships
“But this support and lending to agribusiness is more than just the numbers. This is a sector built on strong relationships between local people built up over many years and based on respect and trust.
“Agriculture has long been the backbone of the economy and Australian banks are deeply invested in the success of Australian agribusinesses and in regional customers and communities more broadly.
“Whether it’s support alongside government incentives to purchase new farm machinery or loan deferrals during COVID and more recent floods, Australian banks stand by their customers and their communities.
“As we put the worst of the pandemic behind us and we continue the recovery journey through 2022 and beyond, banks will continue to collaborate with the sector, governments and industry stakeholders to ensure product and service offerings support the needs of Australian agriculture long into the future.”
