Farming Debt is Up

Borrowing in the farming industry may have quadrupled over the past five years, but the resulting investments have helped grow UK farming’s contribution to the economy to almost £10 billion annually.

This was the message from Lloyds Bank’s head of agriculture Andrew Naylor, speaking at a rural surveyors’ continual professional development (CPD) session near Stafford on 5 October, organised by Surveyors RECAP. Emphasising the important role played by professionals in farming industry, he said new extremes of volatility meant everyone from surveyors to banks, lawyers and accountants needed to change the way they supported their customers.


“The Bank of England’s figures for net lending to agriculture, forestry and fisheries increased from £292 million to £1,260 million between 2010 and 2014 – but at the same time UK farmers’ contribution to the economy grew by £3.1 billion or 45% to almost £10 billion,” he explained.

“This extended period of low interest rates has definitely fostered investment in the UK. Our food and farming sector is now worth £103 billion, which is 6.8% of the UK’s national income or Gross Value Added. It’s clear that much of the borrowing in recent years has been channelled into investments such as infrastructure, expansion and automation – placing us in a strong position for the future despite current low commodity prices.”

He cautioned, however, that while input costs had generally decreased over the past year, commodity prices had fallen by a far greater amount. “Milk is down 25%, deadweight pigs down 16% and deadweight sheep down 11%. This new, highly volatile world is one which will require banks and other professionals to work more closely and flexibly with farming customers. We all need to adapt,” said Andrew.

“However, the good news is farming remains of huge importance to the economy as a whole. Total farm output has grown by a quarter to £25.8 billion in the past five years and the agri-food sector employs some 3.8 million people or 13.4% of the total UK workforce. That’s a significant contribution.”

Chartered surveyor Stephen Locke, who organised the session, said: “It’s important for surveyors and other professionals in the industry to keep abreast of issues that are affecting markets and the viability of farm businesses. But it’s useful to also see the whole picture and realise that although times are tough for many at the moment, the underlying industry is strong with rising levels of investment.”

Lloyds Bank

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