Two weeks after the Reserve Bank of Australia’s (RBA’s) interest rate cut and the call from the National Farmers’ Federation (NFF) to pass on the full rate cut to farmers – and just one week out from Christmas – only four banks* have passed some rate relief to their agribusiness customers. The NFF’s December Agribusiness Loan Monitor shows that BankSA Agribusiness, BankWest Agribusiness, Commonwealth Bank Agribusiness and Westpac Agribusiness have passed on rate cuts since the RBA’s decision to reduce rates to three percent – yet none by the full 25 basis points. NFF President Jock Laurie acknowledged the cuts, which range from 0.15 percent to 0.20 percent for agri-term loan customers and 0.05 percent and 0.20 percent for overdraft customers, yet urged financial lenders to do more to pass the full benefits of the RBA cut on to farmers. “The December rate reduction was the sixth such cut made by the RBA since November 2011, bringing the cash rate down to three percent – a reduction of 1.5 percent in just 13 months. “Yet agricultural lenders have shaved an average of just 1.02 percent off their agricultural term loans during this time. ANZ has been the bank to pass on the highest rate cuts to agricultural customers since November 2011, with a total reduction of 1.15 percent in its term loans, followed closely by Suncorp Agribusiness on 1.14 percent. “Meanwhile, in overdraft loans, Westpac is a clear standout, passing on a 1.58 percent reduction to agricultural customers in the last 13 months – over the 1.5 percent RBA interest rate cuts – while the average for all financial overdraft lenders is 1.07 percent. “However, since the latest RBA cut earlier this month, we’ve only seen four banks pass on any rate reductions, and then, not to the level set by the RBA. We encourage all financial lenders to not only follow Westpac’s overdraft example and pass the full RBA interest rate cut for the past 13 months on to farmers, but also to act quickly in passing this latest cut on in time for Christmas,” Mr Laurie said. The December NFF Agribusiness Loan Monitor shows agri-term loans tracking at approximately four percent higher than the RBA cash rate, and at around one percent higher than standard variable mortgages. The full December Loan Monitor, and a summary of the November 2011 to December 2012 results, are available http://www.nff.org.au/publications.html#cat_2119[here]. The Monitor is compiled each month by leading money market monitor Canstar and published by the NFF as a tool for all Australian farmers. Given the RBA does not meet to review its fiscal policy in January; the next NFF Agribusiness Loan Monitor will be released in mid-February 2013. *Note, the December Agribusiness Loan Monitor contained an inadvertent data error regarding NAB’s interest rate reductions for December 2012. NAB reduced it’s term loan and overdraft rates by 0.20 percent in this time period, and this change has been captured in the updated December Loan Monitor, available http://www.nff.org.au/publications.html#cat_2119[here]. As a result of this rate reduction, NAB was the bank to pass on the highest rate cuts to agricultural customers since November 2011, with a total reduction of 1.18 percent in its term loans, followed by ANZ on 1.15 percent and Suncorp Agribusiness on 1.14 percent. NAB ranked third in overall overdraft reductions during this period, behind Westpac on 1.58 percent and ANZ on 1.28 percent. The full November 2011 to December 2012 summary is available http://www.nff.org.au/publications.html#cat_2119[here]. Canstar apologises for any inconvenience caused. For more, read the Canstar correction release, available http://www.nff.org.au/read/3796/canstar-release-nab-rates-correction.html[here].