Agriculture is bucking the UK economic trend

Agriculture is bucking the UK economic trend, meaning farmers are well placed to secure finance despite the credit crunch, according to The Agricultural Mortgage Corporation (AMC).

While most individuals and businesses are facing tighter lending availability and higher interest charges, the farming sector remains largely unaffected, says John O'Meara, Regional Agricultural Manager for the south-west. "The agricultural sector has always been attractive to banks because of its strong security. Now, agriculture seems to be going against the general mortgage market – land and commodity prices are rising – so it's still an attractive sector for lenders."

However, some producers are finding their interest rates have increased sharply, because their borrowing is based on the London Interbank Offer Rate (LIBOR), which has risen due to the credit crunch, rather than the Bank of England's base rate, which has fallen. Others have found it more difficult to secure new finance, or are facing tighter lending criteria.

AMC is therefore asking farmers to challenge it to beat their bank's interest rate, and to examine the small print on existing or new loans. "AMC is still as committed to agriculture as ever we have been – and despite the credit crunch we are determined to retain our competitive edge," says Mr O'Meara.

As well as offering competitive interest rates, AMC's margins are agreed for the life of the loan – unlike many other banks, which adjust their margin at annual reviews. "Our costs are clear from the start, giving our customers the confidence to plan for the future," says Mr O'Meara. "Once we give you a loan, we leave you alone."

In the uncertain wider financial climate, it is also important to consider the strength and security of your lender, he adds. AMC is part of the Lloyds TSB Group, which is one of the few triple-A rated banks in the UK, ensuring it is here for today, tomorrow and the future.

"We have always been cautious lenders but judge each case on its merits," says Mr O'Meara. "We want to ensure that our customers can meet their debts – it safeguards their interests and enables us to continue to offer the same steady service through thick and thin."

Unlike some banks, AMC will have its usual stand at the Royal Cornwall Show on 5-7 June (stand number 3), and will welcome all farmers wanting to take the AMC Challenge or simply to discuss business improvements and restructuring.

It will also be attending the following shows throughout the summer, where it is happy to welcome farmers and the media on its stand: Cereals 2008; the Royal Show; Great Yorkshire, Royal Welsh; Four Oaks Horticulture; Glee Horticulture; the Dairy and Livestock Show; and the Dairy Show.