NatWest has announced it will offer farms new measures to help battle inflation, including capital repayment holidays, increased overdraft limits and reductions in the interest rate on small loans.
Farms are facing inflation of over 30% and price hikes of around 200% for fertiliser, gas and fuel, and a raft of other cost pressures on feed, electricity and seeds.
This is a result of the combined impacts of inflation, the pandemic, Brexit, and the war on Ukraine on supply costs to the industry.
In response to these pressures, NatWest has today unveiled a package to help support farmers, with financial support available for those hit by increased costs.
The bank’s analysis has found that costs on fertiliser have increased three-fold, with the cost per tonne now sitting at around £850, up from £280 in May 2021, due to much of the manufacturing taking place in Russia and Ukraine.
It shows that energy costs are also continuing to affect the market with gas up 200% on 2021, and electricity up 40%.
As part of its new package of measures, the bank will offer capital repayment holidays – where the business only needs to pay the interest on a loan for an agreed period, reducing the amount due each month – as well as increases to overdrafts.
For smaller farm businesses, the firm also announced reductions in interest rate on its range of Small Business Loans up to £40,000, by between 0.5% and 1.35% dependent on term and amount.
Ian Burrow, head of agriculture at NatWest, said: “We are here to support our customers in the farming sector through this challenging period.
"Our agricultural managers have in-depth knowledge of the sector, including being able to offer individual financial support, where needed, to help customers navigate high energy, feed and fertiliser prices.
"We would urge affected customers to get in touch with their local agriculture relationship manager to discuss how we can help."
It comes after the bank launched a new Green Loan and Green Asset finance product in March, allowing farming businesses to borrow with no fees to invest in clean energy.
