21 Jul 2014

Farmers want action on interest rates

7:41 am on 21 July 2014

Farmers want the Reserve Bank and the Government do more to curb interest rate increases and reduce the overvalued exchange rate.

That message has come through in Federated Farmers' latest confidence survey.

It reveals a big turnaround in farmers' outlook, with pessimists outnumbering optimists on prospects for the economy and farm profitability.

While sheep and beef farmers are still feeling relatively optimistic, dairy farmer confidence has slumped on the back of falling prices.

Federated Farmers president William Rolleston said all farmers were feeling under pressure from the high dollar and rising interest rates and the Reserve Bank Governor needed to take note of that when he next reviewed interest rates.

Dr William Rolleston

Dr William Rolleston Photo: Supplied

"The drop alone in dairy prices through the Global Dairy Trade auction site, is going to mean that there's several billion dollars less circulating around the economy next year than there was this year. And so I think he certainly needs to have a very careful think about whether he's going to be raising interest rates in the near future."

"Certainly an increase has been forecast, but even an 8.9 percent drop in dairy prices over the last two weeks is a significant alarm bell, I would have thought," Mr Rolleston said.