Farm lending tops £1.6bn in Scotland

By ANDREW ARBUCKLE
Published on 17/08/2012 00:00

Scottish farmers have again increased their bank borrowing, with the end of May 2012 figure reaching £1.67 billion, some £56 million, or 3.5 per cent, higher than a year ago.

But the chief executive of NFU Scotland, Scott Walker said that the union were still receiving reports from members who were finding it difficult to secure finance from the banking sector for new projects.

“It is disappointing that, with all the UK government’s statements on helping small businesses and increasing lending, a sector which has been relatively robust during the recession can still find it difficult to secure the borrowing that would help it to generate jobs and drive economic growth in rural areas,” he said.

Walker added that the union was also receiving complaints from members on the high fees being charged for arranging lending, especially overdraft facilities, which had risen markedly for many farm businesses.

“With the overall inherent stability in agriculture, especially in land values, our members’ question why they need to pay higher fees simply to restore the banks’ own balance sheets,” he said.

The £1,670 million figure is the third consecutive year that the outstanding debt of Scottish agriculture has risen.

Some 89 per cent of the advances went to owner-occupiers.

Of the remainder, 8 per cent went to tenant farmers, 2 per cent to agricultural contractors and 1 per cent to livestock salesmen 1 per cent – a similar profile to previous years.