Farmer satisfaction with banks has worsened over the past six months, according to a survey carried out by Federated Farmers.
The latest Federated Farmers Banking Survey, conducted by Research First, found the number of farmers who feel under pressure from banks has risen from 16 percent to 23 percent from the previous survey.
Farmers who reported being 'satisfied' or 'very satisfied' with their banks, slipped from 71 percent in May this year, to 68 percent in the November survey.
Feds economics and commerce spokesperson Andrew Hoggard said it was the lowest since the twice-a-year surveys began in August 2015.
"This is disappointing but not at all surprising given what we have been hearing over the past several months of banks getting tougher and changing conditions as they seek to contain or even reduce their exposure to agriculture, and also as they respond - prematurely - to the Reserve Bank's proposals on bank capital," he said.
He said examples of changed conditions putting farmers under pressure include new or increased margins, shifting from fixed to floating interest rates (or vice-versa), selling assets to repay debt, requiring principal as well as interest to be paid, and more information or security being required.
Arable was the group with the highest percentage of farmers feeling under pressure (30 percent) and they also had the lowest percentage feeling very satisfied or satisfied (60 percent), although they also had the highest proportion feeling neutral.
"This might reflect a combination of some poor to average recent harvests, competition from cheap imported grain reducing demand and prices, and the fact arable farmers, because of the very nature of their businesses, have very lumpy farm incomes and thus need bigger overdraft facilities compared to other farm types," Hoggard said.
Sharemilkers, which were often the farming group who in past surveys had felt under comparatively greater pressure from banks than others, expressed higher than average satisfaction rates in the November survey.
Hoggard said a contributing factor was that the average sharemilkers' interest rates are now only marginally higher compared to other farming groups.