Australia's two biggest banks are voicing concern over the value of properties affected by the Queensland government moratorium on clearing of secondary growth.
According to The Australian Financial Review, the moratorium, which began on April 8, has been extended to October while new legislation is drafted, with the result that some farmers have lost land for production.
Commonwealth Bank of Australia's state manager for agribusiness, Richard Brimblecombe, said properties' productive capacity would diminish over time as a result.
"The security value of property held by banks will be diminished by this," he said. "We also think the reduction in productive capacity will mean a reduction in the ability to service loans. It's a double whammy for the primary producers, and that is a concern for all stakeholders."
NAB Agribusiness regional manager for North Queensland and the Northern Territory (which also has clearing moratoriums) Geoff Howard said: "Where there is more regrowth it means there is less feed, less feed means less carrying capacity and properties are valued on carrying capacity."
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