Call for greater support for farming from banks

Bankers have been encouraged to support the many sound farm and farmer supply businesses that are currently suffering unplanned bumps in 
their cash flows because of the weather.

Speaking in Edinburgh, David Caffall, the chief executive of the Agricultural Industries Confederation, representing the supply sector, said many of his members were now under severe pressure.

“In a way everything is linked to last year’s lousy harvest but the real issue is cash flow,” he said. “My members are in many cases under severe pressure. It is tempting to have a rant about the banks but this is a classic case where they should be funding sound businesses,”

He was loathe to blame any single bank, saying in his experience the situation varied from area to area and also depended largely on the approach of regional managers.

He added: “To make matters worse, some of the interest rates being demanded are fearsome. The tonnage of animal feed being delivered in recent weeks sounds like it is great business but it comes at a cost because the raw materials were not there and had to be bought in at short notice.

“The end result is that the banks are having a birthday on the back of an industry that can ill afford it.”

In another example of the cash flow pressure that now exists in the farming industry, he described fertiliser deliveries this year as “logistically challenging” because of farmers delaying ordering until the very last minute.

When questioned about the potential under these circumstances of cases of bad debt to arise, Caffall said it was always a worry but farmers were pretty good at keeping to their commercial obligations.

Earlier he had praised the way farmers and the trade had worked together to cope with the “rubbish harvest” last year in ensuring all qualities of grain found a home. In many cases, he said this had involved conversations about every single lorry load rather than acceptance of large bulk consignments.

If the past 12 months of bad weather had cast a black cloud over the industry, he admitted he also had serious concerns about the long-term future of 
arable farming in the UK.

Yields had been falling at just the time they needed to be rising to feed a larger population. The possible loss of neonicitinoid seed dressings was a concern as was possible EU action that could see up to 40 fungicides removed from the farmer’s armoury. Added to this there were the possible removal of approval for metaldehyde based slug pellets and the ever increasing requirements of the Water Framework Directive.

Each of these areas individually was of concern but it was the cumulative effect which could be devastating in terms of arable production.