Rate cuts are welcome relief for farmers

Today’s unprecedented 1.5% cut in interest rates provides welcome relief for farmers says Paul Spencer, Agriculture Director for Lloyds TSB Agriculture and the Agricultural Mortgage Corporation (AMC).

"This significant interest rate reduction announced today will have an immediate effect for many of our customers and go some way to relieving the cash flow pressures being experienced by many farming businesses at present" he said "without question it has been a challenging year, however I remain optimistic about the long term outlook for UK agriculture."

"With input prices for items such as fuel, feed and fertiliser beginning to fall and with the value of land remaining strong, the capacity for borrowing in UK agriculture is robust. Farmers can be reassured that well funded banks, like Lloyds TSB and the AMC, will continue to look favourably at well constructed proposals."

Mr Spencer continued, "While commodity prices remain volatile, robust financial planning and good budgeting decisions will be crucial. The key is controlling costs and offsetting risks. There are actions that farmers can take to counteract volatility such as fixing interest rates, utilisation of pool selling and exploring forward and futures contracts through experienced brokers. I would of course always advise farmers to consult their professional advisers before committing to any such actions."

"Lloyds TSB Agriculture and AMC remain committed to supporting the agricultural industry, as they have done through good times and bad for many years."