Bank­ing on it

Banks are be­gin­ning to back the long-term sus­tain­abil­ity of our ru­ral sec­tor, launch­ing loans and ini­tia­tives to as­sist farm­ers to be en­vi­ron­men­tal ste­wards.

Element - - Planet - ADAM GIF­FORD Adam Gif­ford is an Auck­land free­lance writer with mul­ti­ple spe­cial­ties in­clud­ing busi­ness, tech­nol­ogy, arts and Maori news.

Change costs money, you can bank on it. Some­times. Banks are start­ing to lend for the en­vi­ron­ment. West­pac is fi­nanc­ing so­lar panels. ASB bank is help­ing farm­ers clean up their cow shed ef­flu­ent and plant river­banks.

The ASB’s ru­ral en­vi­ron­men­tal com­pli­ance loan gives farm­ers up to $200,000 for five years, with the in­ter­est rate set at the bank’s cost of funds – cur­rently 3.86 per­cent.

Mark Heer, the bank’s gen­eral man­ager of ru­ral lend­ing, says 120 projects have been funded since the loan was launched in Fe­bru­ary, with the aver­age loan be­ing about $120,000.

He says New Zealand pro­tein, its dairy and meat prod­ucts, are in de­mand around the world, but any in­crease in pro­duc­tion needs to be bal­anced by en­vi­ron­men­tal sus­tain­abil­ity.

“What we want to do is in­crease the level of com­mu­ni­ca­tion around get­ting that bal­ance of pro­duc­tiv­ity and en­vi­ron­men­tal sus­tain­abil­ity and pro­vide part of the so­lu­tion,” Heer says.

He says the loans are be­ing used both for com­pli­ance, such as ef­flu­ent man­age­ment sys­tems, and also for projects such as fenc­ing water­ways and tree plant­ing, which are seen as good for the in­dus­try.

They have funded farm bridges so an­i­mals no longer have to wade though streams to get to the milk­ing shed.

“The new clean wa­ter ac­cord is an in­dus­try good ini­tia­tive, so it’s not com­pli­ance in terms of re­source con­sent,” Heer says.

But good en­vi­ron­men­tal prac­tice is in­creas­ingly be­ing seen by wider so­ci­ety as part of the li­cence to op­er­ate.

“There are also peo­ple’s per­sonal mo­ti­va­tions around pro­tect­ing the en­vi­ron­ment and their sense of aes­thet­ics. Fer­ris: Kevin Fer­ris’ Waikato Farm has ben­e­fit­ted from the

ASB Ru­ral Com­pli­ance Loan. Photo: Ted Baghurst

“Also, what might meet com­pli­ance stan­dards this year might not next year. Com­pli­ance evolves. This is a jour­ney, not a des­ti­na­tion.

“I think our farm­ers and com­mu­ni­ties are at­tuned to what prac­tices are ac­cept­able and what is in­dus­try best prac­tice.”

Many of the loans have gone to ex­ist­ing cus­tomers but they are also bring­ing new busi­ness to the bank.

“A lot of farm­ers are in­vest­ing to pro­tect the en­vi­ron­ment at the same time they are in­creas­ing pro­duc­tion. “By na­ture farm­ers are cus­to­di­ans of the land.” Over at West­pac, it’s so­lar en­ergy that’s bring­ing a ray of green light to its ru­ral busi­ness.

The So­lar Shed ini­tia­tive with Merid­ian En­ergy, launched last month at Mys­tery Creek’s Field Days, is aimed at help­ing farm­ers in­stall so­lar panels – and po­ten­tially sav­ing them thou­sands each year on power bills.

The bank gives a three-year, no de­posit equip­ment fi­nance loan at a spe­cial in­ter­est rate.

The power com­pany pro­vides a smart me­ter, full in­stal­la­tion and a two tier tar­iff for elec­tric­ity, and equip­ment sup­plier What Power Cri­sis pro­vides 40 250W Renesola panels, roof mounts, ca­bling and a Steca or SMA 10kW in­verter.

When the farm isn’t us­ing all the elec­tric­ity pro­duced, it can go back into the grid for a credit.

Dave Jones, West­pac’s head of Agribusi­ness, says in the past farm­ers have been put off so­lar en­ergy by the cost and com­plex­ity of putting it in.

He says the So­lar Shed pack­age is de­signed to pay for the in­vest­ment in seven to eight years, giv­ing elec­tric­ity sav­ings of more than $3000 a year.

The set up will pro­duce about 14,500 kW/hrs of elec­tric­ity a year. So­lar dairy: West­pac’s So­lar Shed ini­tia­tive is about

pow­er­ing up New Zealand’s dairy in­dus­try.

“I think our farm­ers and com­mu­ni­ties are at­tuned to what prac­tices are ac­cept­able and what is in­dus­try best prac­tice.” MARK HEER, ASB

The En­ergy Ef­fi­ciency and Con­ser­va­tion Au­thor­ity (EECA) es­ti­mates around 140,000 kWh of so­lar en­ergy falls on the roof of a typ­i­cal farm shed each year, but many sheds con­sume more than this in elec­tri­cal en­ergy.

Bill Highet from Merid­ian En­ergy says at the mo­ment fewer than 1000 cus­tomers can send elec­tric­ity back to the grid, but the num­ber is quickly ris­ing. In Aus­tralia there are more than a mil­lion such so­lar cus­tomers.

So­lar power is also likely to be an im­por­tant com­po­nent in ru­ral broad­band net­works. BNZ has tied its Kauri Bonds to phys­i­cal kauri trees. When it ar­ranges such a bond, which is a New Zealand dol­lar de­nom­i­nated bond from a for­eign is­suer, it helps the Kauri 2000 Trust plant 100 kauri seedlings at Kuao­tunu on the Coro­man­del Penin­sula. On cur­rent progress than means about 1000 new trees a year.

Rabobank also claims a strong in­ter­est in sus­tain­able farm­ing. New Zealand CEO Ben Rus­sell says Rabobank is in­volved in a range of part­ner­ships and ini­tia­tives which pro­mote sus­tain­able farm­ing prac­tices and the pro­tec­tion of the en­vi­ron­ment, in­clud­ing a strate­gic part­ner­ship with the New Zealand Farm En­vi­ron­ment Trust.

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