NFF President Jock Laurie says the RBAs decision reflects that inflation is on the increase and some sectors of the economy are struggling.

“Like all business owners, farmers have today breathed a sigh of relief that the RBA has passed on a significant interest rate cut,” Mr Laurie said.

“While conditions across the country are mainly favourable, reflecting the news that as of yesterday, for the first time in a decade Australia is no longer officially drought-declared, some areas in southern Australia, particularly in South Australia and Victoria are unseasonably dry.

“Commodity prices have recently taken a tumble, with dairy, wool, cotton, lamb, sugar and fruit prices all softening in late April. And the Australian dollar remains strong: which, for an export dependent sector like ours, means challenging times for our farmers.

“Today’s decision by the RBA is welcome news as it eases some of the pressure on our farmers. But the most crucial component of today’s announcement is what follows it: will we see the banks pass these rate cuts on to farmers and agribusinesses?

“With many of the banks now choosing to act independently of the RBA when it comes to interest rate decisions, it’s a waiting game for farmers until the NFF’s May Agribusiness Loan Monitor is released later this month, providing transparency regarding bank movements.

“The Monitor will show which banks, if any, have passed on the cuts to their term loan and overdraft agribusiness customers: and by how much.

“And, as always, we encourage farmers to compare all the products on the market so they can make informed decisions about banking products, loan rates and portability options, should they decide to switch banks,” Mr Laurie said.

The NFF Agribusiness Loan Monitor will be released on Monday 14 May.