8 Oct 2008

Agri-sector advised to plan ahead

6:52 am on 8 October 2008

A senior fund manager is advising the agricultural sector to plan ahead, in the face of very high borrowing costs predicted for the next couple of years.

While borrowing for the household and business sectors has declined in line with increases in the cost of borrowing, AMP Capital Investors head of fixed-interest Grant Hassell says the agriculture sector has bucked that trend.

He says the primary industry has increased its borrowing quite substantially since September last year, and that's most likely the result of dairy conversions and other investments in the sector.

But Mr Hassell says the dairy sector may experience a fall in revenue, and farmers need to take that into account when they think about borrowing.