Farmers are borrowing more than ever: NFU urges banks to invest more in farms

Farmers call on banks to back farming as Brexit nears
Farmers call on banks to back farming as Brexit nears

The National Farmers Union (NFU) has laid out the need for investment on farms and urged banks to collaboratively demonstrate support to UK farming in a meeting today.

The meeting led by the NFU President Meurig Raymond at NFU's headquarters in Warwickshire gave an opportunity to underline the importance of more resilient and productive businesses, as a result of investment, ahead of potential economic uncertainty impacting farm businesses.

This comes as an NFU survey shows the numbers of farmers requesting to borrow money has increased to 42% in 2016. Of these farmers, 66% feel banks would be supportive – down 10% on last year.

Banking’s role in helping farmers manage market volatility, smoothing the path towards new agricultural and environmental policies, and managing global issues such as antimicrobial resistance were discussed.

Meeting attendees heard from NFU Director of Policy Andrew Clark about the policy opportunities and challenges facing farming in Brexit negotiations – setting the scene for the need for certainty for farm businesses.

Investment need has been 'escalated'

'Banks to make clear to farmers that they are supportive of the sector', NFU President said

Meurig Raymond said the need for investment in farms has always been there – but with Brexit looming that need has 'certainly escalated'.

Mr Raymond said: “Productive and profitable farm businesses are vital as the Government enters these major policy negotiations.

“In light of this, we took the opportunity today to underline the need for banks to make clear to farmers that they are supportive of the sector.

“I was pleased to hear that the NFU and banks in the room were all in agreement - looking to Government to add a much-needed element of certainty to their businesses.

“We’ve established in recent weeks that the right trade environment and the continued access to labour post-Brexit are pivotal for UK food and farming. When we reflected on this, the banks round the table could see that clarity on these issues will determine not only farming’s success, but the success of the nation’s economy."

'Mutually beneficial relationship'

British Banking Association’s (BBA) CEO Anthony Browne said bankers and farmers 'could not be more different in the eyes of most people.'

Mr Browne said: "The two sectors are typically located in separate parts of the country and play very different roles in the economy. It’s important to recognise, however, that both sectors share a mutually beneficial relationship.

"The fresh produce that people buy in shops or get delivered to their doorstep is not only grown by farmers, it is funded by banks. In the face of volatile commodity prices, banks are supporting farmers in these tough times.

"It is vital that farmers can secure the finance that they need to invest in crops, machinery or livestock. These figures show that banks are providing this lending at record levels.

"With interest rates at an historic low, there has rarely been a better time for businesses of all sectors to borrow," Mr Browne concluded.