NSW Farmers’ Association Business, Economics and Trade Committee Chair Tom Smith says there is now a lot of pressure on the new Labor Government to show some fiscal responsibility and protect the economy from further increases.
“Farmers are in an impossible position. Not only will this latest increase hit us in the pocket on top of already high fertiliser, chemicals and fuel prices, but the Australian dollar is affecting our export markets,” Mr Smith said.
“The recent cuts to the federal funds rate in the US means that this increase has double affect on our farmers with the appreciation of the Australian dollar,” he said.
Since the drop in US interest rates on January 22 the Australian dollar has appreciated from US$0.8577 to US$0.9046
“In the last 5 years rural debt has increased by almost 70% to over $52,796 million as farmers have been forced to borrow to finance the next season or get their livestock through the dry,” Mr Smith said.
“This interest rate increase will not only affect households it will also impact on many of the income earning small businesses in rural NSW.
“With rural debt at all time highs, and extraordinary financial pressure coming from so many different sectors, farmers are in a very difficult situation,”Mr Smith said.
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