Case study: New Zealand commercial banking and the agricultural sector lessons from economic restructuring

The restructuring of the New Zealand agricultural sector in the mid 1980s was an initial part of a total and ongoing restructuring of the whole economy and should be viewed in that context. Major macro-economic policy changes - devaluation and floating of the NZ dollar, deregulation of financial markets and the introduction of a new tax regime- provided a significantly different operating environment which complemented and reinforced the agricultural reforms. The Rural Bank, as a major creditor of the farming sector, played a pivotal role in leading a debt restructuring process that ensured that all parties involved bore their share of the cost. A "hard" decade later individual farmers normally deal with one financier only, are marker led in their decision making and have a number of competitive finance sources to choose from.