Federated Farmers says the overdraft interest rates that banks are charging are still too high.
It says farmers' overdraft rates may have fallen by the same amount as wholesale interest rates but they still do not reflect cuts to the Official Cash Rate set by the Reserve Bank.
The Reserve Bank is due to review its rate again on Thursday.
Federated Farmers' latest interest rate survey shows farm business overdraft rates have fallen by an average of 2.68 percentage points since December last year.
The Official Cash Rate dropped by four percentage points over the same period.
The federation's economics and commerce spokesperson, Phil York, says that if the Reserve Bank lowers the Official Cash Rate on Thursday, the real issue will be whether it filters through to farm businesses.
Mr York says those businesses are also being squeezed by reduced milk payments and rising inflation costs.
