Share market dive causes fears of farmer debt

Monday, August 20, 2007

The plunge in global share markets is being felt across the farm sector, with fears a further increase in interest rates could now be on the cards.

As farm debt continues to rise and more farmers put money into off-farm investments, there is concern on two fronts, with higher interest rates and the falling share market biting into finances.

Farm consultant Mike Carroll says as debt increases, Australian farmers are in a precarious position.

"It's approaching somewhere around 45 billion, Australian farm debt now, and it's grown at between 15 and 20 per cent over the last three years," he said.

"That's why I say it's really important that the Reserve Bank moves to keep inflation under control so we don't get to very high interest rates, because the farm sector is more exposed than its ever been."

Sourced from ABC.