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Seasonal finance essential for farms after SCF receivership

Fuseworks Media
Fuseworks Media

Wellington, Aug 31 NZPA - Seasonal finance is the biggest issue for farmers following the announcement that a significant rural lender South Canterbury Finance (SCF) has gone into receivership, Federated Farmers says.

SCF owes 20,000 investors about $1.7 billion and went into receivership today after being unable to find a buyer. However the company is part of the Government's Retail Deposit Guarantee Scheme so investors will get their money back.

Farmers should seek trusted and credible advice to ensure seasonal finance continued, Federated Farmers vice president Don Nicolson said.

"Right now just happens to be the period in the year when there is no cashflow ... we need anyone, hopefully the trading banks, to step up and fill the vacuum," he told NZPA.

Land was the "genesis of the economy" and if farmers did not secure seasonal finance there would be a "significant" impact, he said.

SCF today announced it had been unable to complete a recapitalisation and restructure and called in receivers.

Mr Nicolson said that while receivership was tough for all involved, receivers could find "a lot of salvageable parts".

"I'm still calling for calm and patience today because you actually need to get a better understanding of the ramifications of what receivership means."

Mr Nicolson this morning wrote to Finance Minister Bill English and Agricultural Minister David Carter, suggesting some farmer support systems be put in place.

"Let's not have a road block here because the deck of cards will fall. If we don't get seasonal finance the cascade effect will be significant."

He also suggested rural debt mediation guidelines, such as those used in Canada and Australia.

"(Because) when you (the farmer) are faced with going to the wire or the wall, you'll have a proper process being embarked upon by your lenders and you as a borrower have some way of ... exiting with dignity."

While the company founded by Alan Hubbard is in receivership, he and his wife Jean remains in statutory management and another of his companies is being investigated by the Serious Fraud Office (SFO).

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