Farmers prepare to square off against banks

The lobby group is seeking to meet with the banks to "argue there is scope for immediate interest rate reductions, especially in the floating category," said economics spokesman Philip York. It supports the Reserve Bank's view that floating mortgage rates are "unusually high"

The move comes after a central bank report backed away from criticism over fixed-rate loans, although stated there was still room for lenders cut floating-rate products.

"Farm mortgages are arguably the safest form of business to lend against," York said. "We look forward to discovering what proportion of banks' farm business customers are paying the same, if not less, than residential customers."

The Feds joined politicians, labour unions and manufacturers in airing disappointment over Parliament's decision not to pursue an inquiry into banking sector funding costs and margins.