Farmer Peter Repacholi evicted from 102-year-old WA property amid drought and rising costs

Updated

Peter Repacholi faced down every farmer's worst nightmare this week, quietly driving out the front gates of his family's 4,000 hectare farm at Kondinin in Western Australia for the last time.

In the end the 62-year-old did not wait for the final day of a 42-day eviction notice sought by Bankwest over a $3.5 million debt.

"I didn't want to be there when they came to take over, too emotional," Mr Repacholi said.

His early departure to temporary accommodation in the eastern wheat-belt town with his wife Angela was the latest chapter in a bitter battle with the bank, which called in receivers last November and sought his eviction in February.

He has now met lawyers in Perth to try to negotiate a settlement with the bank to at least allow him to return to the original homestead property, Palomar, which was developed by his grandfather in 1912.

Like many wheat-belt farmers Mr Repacholi succumbed to a spiral of debt after a run of drought and frost combined with rising costs.

In the end he was spending $600,000 a year to run the farm, and more than $200,000 of this was his interest bill.

Last June after reassessing him as a higher credit risk, Bankwest raised his interest rate from 8.5 per cent to 13.62 per cent.

According to state Liberal backbencher Dr Graham Jacobs, it is a common story.

Dr Jacobs is the Member for Eyre, which includes some of the most marginal areas of Australia's biggest grain belt, where debt-laden farmers are sometimes charged as much as 17 per cent interest on their loans.

"Twenty years ago we had around 25,000 cereal growers in WA, today we've got about 4,400," Dr Jacobs said.

"Now how much more culling are we going to do, if you like? When people say the bottom 10 per cent have to go because they're not viable, they’re not viable because the banking system and the lending system is not appropriate and not suitable for that industry."

Dr Jacobs has been a vocal critic of the big four banks' treatment of farmers and their failure to tailor their services to better reflect the seasonal realities of farming.

He has also been highly critical of what he calls a cosy relationship between the banks and companies managing farm receiverships.

"Once farmers do get to the receivership process they've got 30 per cent equity left in their farm, the receivership process chews up the remaining equity and it's tragic that farmers have to go, even more tragic that when they do go there's nothing left," he said.

Ironically Mr Repacholi had a bumper year in 2013, harvesting about $800,000 worth of grain. But he had arranged finance outside the bank to fund his cropping program and after harvest, Bankwest claimed it all.

"They confiscated everything. They took every grain I took off the farm," he said.

He expected the bank to leave him with nothing. He estimated his farm, livestock and machinery were worth more than $5 million, but if there was a foreclosure sale he would be unlikely to see a cent.

"This is happening to too many farmers, what the banks are doing," Mr Repacholi said.

"It's written in their contracts or documents on mortgages, it's all for the bank, they will not lose because it’s all written up in their documents. If it's a foreclosure sale you lose, they just kick you off."

Bankwest said it could not comment on Mr Repacholi's case because of its confidentiality obligations, but a spokesman told the ABC the bank regretted any foreclosure.

Bankwest was established in 1895 as WA's rural bank. It is now owned by the Commonwealth Bank.

Commonwealth chief Ian Narvev told the ABC's AM program last February that foreclosure was a last resort and the bank tried to be more compassionate to farmers in drought.

Last year cereal growers in WA had a record year, harvesting about 16 million tonnes and returning about $5 billion to the economy.

Even still, the bumper crop paid off only $1 billion of the estimated $14 billion owed by WA farmers.

By some estimates up to 300 farmers are still struggling to raise finance for this year's planting season, which traditionally begins in April.

The WA Government said it was still waiting on the criteria and guidelines to be decided on the Commonwealth's new drought assistance package.

It said 16 WA farmers had also applied for concessional loans under a new Commonwealth scheme offering low interest loans of up to $400,000.·

They confiscated everything. They took every grain I took off the farm. This is happening to too many farmers, what the banks are doing. Peter Repacholi

The state's Minister for Agriculture and Food, Ken Baston, says he felt sorry for farmers affected by drought but ultimately agriculture is a tough business.

"They are businesses and they do need to survive in a business sense and so in many cases quite often maybe too much capital is borrowed," Mr Baston said.

"You only need to go in the city and you see lots of shops that are shut because they've gone down a similar investment line that didn't work out, so yeah I guess what I'm saying is business can be tough."

According to the WA Farmers' Federation, farm debt has been a major factor in the number of cereal growers leaving the wheat-belt.

It has caused a seismic shift in how farms are being managed.

WAFF President Dale Park says large family corporates were taking over from traditional family farms and fly-in fly-out workers had become a reality.

"They will bring staff in for the peak times, so seeding and harvest will be a big influx," Mr Park said.

"So they might employ five permanents and they'll bring another 10 or 15 in for those peak periods, so it's a real change of how country WA is structured, which is going through a hell of a change at the moment."

Towns across the wheat-belt may be getting smaller, but community spirit in places like Kondinin is strong.

When news spread of the Repacholi's impending eviction, dozens came for a barbecue to show their support.

Kondinin Shire president Allen Smoker says many local farmers were "on their knees" before last year's record breaking harvest.

"I felt today as I drove into the farm, you have a look at the farm, there's nothing obviously wrong here, the farm looks in good shape," Mr Smoker said.

"It's just a situation that's arisen over 10 pretty difficult seasons particularly in this strip of heavy country where Peter's farm is situated.

"Look, from the community point of view we're just really strongly here to support individuals because they need support in this situation."

Mr Repacholi says he was humbled by the turnout.

"Someone's been kicked in the stomach, people come out to support because a lot of those people are hurting as well," Mr Repacholi said.

"I don't want to go there, but if we have another bad year even coming off a good year, they will see the red line too."

Sean Murphy’s full report will be on ABC TV’s Landline this Sunday from noon on ABC1.

Topics: rural, agribusiness, business-economics-and-finance, kondinin-6367

First posted