The National Farmers’ Union (NFU) has met with leading lending banks to highlight the concerns of farmers and growers about the tightening of access to credit and the impact of the recent financial turmoil on agriculture.
NFU deputy president Meurig Raymond told the banks that, although farming might be less affected by an economic recession than some sectors of the economy, farm incomes faced substantial pressures in the coming months from input bills and market pressures.
Speaking after the meeting, Raymond said: “It was extremely important and timely for the NFU to hold this meeting with senior executives from the major agricultural lending banks. Many farmers have come to us raising concerns about the rising costs of borrowing, at a time when the bank base rate is falling, and how this is affecting their businesses.
“Farmers are likely to face substantial increases in working capital needs in the next year as they deal with cost pressures from inputs and regulation like NVZ measures, combined with lower commodity prices in some sectors. The pressures are especially acute for tenant farmers, many of whom are yet to conclude outstanding rent review negotiations at this time. All farmers will be looking to banks more than ever to help them through this difficult period.
“We agreed on the importance of good communications in these very volatile times. It is not easy for farmers to understand why some banks have taken a much more risk-averse view of lending recently and this has to be clearly explained and justified.
“We fundamentally believe that farming is, and will remain, one of the best customers for British banks. Farming may face some immediate pressures but the long-term outlook with growing demand for food is positive. It is reassuring that all the major banks share this view and have confirmed their commitment to support farming businesses,” added Raymond.
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