He says New Zealand protein, its dairy and meat products, are in demand around the world, but any increase in production needs to be balanced by environmental sustainability.
"What we want to do is increase the level of communication around getting that balance of productivity and environmental sustainability and provide part of the solution," Heer says.
He says the loans are being used both for compliance, such as effluent management systems, and also for projects such as fencing waterways and tree planting, which are seen as good for the industry.
They have funded farm bridges so animals no longer have to wade though streams to get to the milking shed. "The new clean water accord is an industry good initiative, so it's not compliance in terms of resource consent," Heer says.
But good environmental practice is increasingly being seen by wider society as part of the licence to operate. "There are also people's personal motivations around protecting the environment and their sense of aesthetics.
"Also, what might meet compliance standards this year might not next year. Compliance evolves. This is a journey, not a destination. I think our farmers and communities are attuned to what practices are acceptable and what is industry best practice. Many of the loans have gone to existing customers but they are also bringing new business to the bank."
A lot of farmers are investing to protect the environment at the same time they are increasing production."By nature farmers are custodians of the land."
Over at Westpac, it's solar energy that's bringing a ray of green light to its rural business.
The Solar Shed initiative with Meridian Energy, launched last month at Mystery Creek's Field Days, is aimed at helping farmers install solar panels - and potentially saving them thousands each year on power bills.
The bank gives a three-year, no deposit equipment finance loan at a special interest rate. The power company provides a smart meter, full installation and a two tier tariff for electricity, and equipment supplier What Power Crisis provides 40 250W Renesola panels, roof mounts, cabling and a Steca or SMA 10kW inverter. When the farm isn't using all the electricity produced, it can go back into the grid for a credit.
Dave Jones, Westpac's head of Agribusiness, says in the past farmers have been put off solar energy by the cost and complexity of putting it in. He says the Solar Shed package is designed to pay for the investment in seven to eight years, giving electricity savings of more than $3000 a year. The set up will produce about 14,500 kW/hrs of electricity a year.
The Energy Efficiency and Conservation Authority (EECA) estimates around 140,000 kWh of solar energy falls on the roof of a typical farm shed each year, but many sheds consume more than this in electrical energy. Bill Highet from Meridian Energy says at the moment fewer than 1000 customers can send electricity back to the grid, but the number is quickly rising.
In Australia there are more than a million such solar customers. Solar power is also likely to be an important component in rural broadband networks.
BNZ has tied its Kauri Bonds to physical kauri trees. When it arranges such a bond, which is a New Zealand dollar denominated bond from a foreign issuer, it helps the Kauri 2000 Trust plant 100 kauri seedlings at Kuaotunu on the Coromandel Peninsula. On current progress than means about 1000 new trees a year.
Rabobank also claims a strong interest in sustainable farming. New Zealand CEO Ben Russell says Rabobank is involved in a range of partnerships and initiatives which promote sustainable farming practices and the protection of the environment, including a strategic partnership with the New Zealand Farm Environment Trust.
