A GENUINE show of support or feel-good publicity spin?
Regardless of their motives, the big banks that have publicly declared to stand by WA farmers struggling through the dry season, have put themselves a step above the rest in the eyes of many.
Westpac led the way when it kicked off its regional tour of WA, hosting forums with local and interstate speakers offering advice on coping with the season, while the bank's representatives took the opportunity to reassure clients as well as non-clients who attended that Westpac would continue to stand by them in this dry season.
One farmer commented that the forums were on the back of continued pressure from clients, but it was still effective in reassuring existing clients and left non-clients wondering why their banks did not offer the same level of support.
Perhaps that was the reason behind Bankwest following suit, having recently extended its support for WA farmers "struggling through the worst drought in living memory".
Bankwest unveiled its Drought Assistance Initiative, which included a commitment to fund the 2011 cropping program for all Bankwest farming clients who were working to address cashflow problems.
The bank promised to prioritise all 2011 cropping program finance approvals, which Bankwest's head of rural and regional banking Jamie Ritchie said highlighted the bank's deep understanding of the seasonal variability.
Mr Ritchie said he was "alarmed" at a 20 per cent spike in farm sale listings as an increasing number of WA farmers look to leave the land.
"While the rest of Australia has experienced good seasonal conditions, more and more WA farmers are watching the farms they spent their lives building up, struggle on the back of consecutive poor growing conditions," Mr Ritchie said.
"That's why we are introducing our Drought Assistance Initiative so farmers can rest easy on their 2011 cropping program.
"We need to stand by our farmers, which is why we are committing to support every WA customer who actively works with us to identify medium term solutions to cash flow issues caused by the drought.
"We will not be foreclosing on any of these customers.
"Not many banks can make that commitment and I am very proud Bankwest can."
While it had not made any big announcements, the Commonwealth Bank said it had been working with clients throughout regional Australia for many years and in recent times assisted many clients through the long drought experienced in the Eastern States.
Regional and agribusiness banking executive general manager Brendan White said as part of the bank's ongoing commitment to the regional and agribusiness sector, it continued to offer a special assistance package for customers in drought-declared areas.
"This is designed to help alleviate the associated financial stress that can be caused as a result of prolonged periods of dry conditions," Mr White said.
"We know that WA is now experiencing what appears to be the worst drought on record.
"In the same way we did on the eastern seaboard, we will continue to support our clients in these drought-declared regions and we will work closely with all of our customers through our dedicated relationship management team.
"We know how vital this assistance can be during these particularly difficult times.
"It remains clear that no one customer situation is the same.
"As such, we will continue to review the needs of individual clients so that we can determine the right kind of assistance that will truly make an impact for their business.
"I would urge customers who are experiencing difficulty as a result of the drought to get in touch with their relationship manager, who will be able to talk through with them the sorts of assistance that can be provided to help them through this difficult period."
But what does the banks' sudden public display of perceived sensitivity and selflessness really mean?
According to RSM Bird Cameron rural accounting services director Geoff Hall, their actions may not be as selfless as they seem.
Mr Hall said while he was surprised to a degree that the banks had announced they would not foreclose on any farming clients, it was not a total shock.
"If there are a lot of farmers out there that are borderline from the bank's perspective, I don't think they could go in hard and sell, because that would potentially push the value of farmland down," Mr Hall said.
"That would have implications for a lot more farmers throughout the Wheatbelt.
"It's a matter of maintaining the value so most of the farmers out there have a reasonable equity and hopefully when things return to a better situation, the land values will be maintained.
"I think it's a commercial decision on their part because it doesn't serve them or the industry any good for them to be heavy-handed."
ANZ was expected to join the ranks and announce its own drought policy later this week. But Mr Hall said he expected other banks heavily involved in the agribusiness sector to be thinking along the same lines.
"We know generally that there is criticism of the big banks in Australia that one leads the way and all the others follow, so I think this is another example of that," Mr Hall said.
"It's a competitive environment and banks are definitely in agribusiness for the long term and I'd expect it has been a very profitable part of their operations over many years."
Mr Hall said there were clients out there that had been through more than just one bad year and another major failure may force the banks to take a different view on quite a few of those farmers.
For the moment, he encouraged farmers to make the most of what the banks were offering.
"Banks do have other initiatives during this time which are positive from a farmers' perspective," he said.
"Things such as not penalising people for cashing out term deposits early and they're not chasing extra fees for restructuring loans.
"My advice is to get the information to your bank manager sooner rather than later and work through the issues and make them fully aware and start to think about next year."
