Farming: ‘Farmers can’t bank on old relationships’

Charges of up to 4 per cent for arranging bank overdrafts and then overdraft rates of up to 8.75 per cent above Bank of England interest rates have been revealed in a survey of Scottish farmers.

And despite there being no change to Bank interest rates in the past year, more than half the farmers said they were now paying more for their credit than they were 12 months ago, with only 4 per cent paying less.

More than two thirds of the respondents also posted comments, including several claimed examples of sharp practice and reduced customer care.

These had so soured the traditional long-term relationship between banker and farmer that several of the latter said they were considering changing their lender.

Speaking for NFU Scotland, who conducted the survey, chief executive Scott Walker said there was a strong feeling that farmers were paying the price for the reckless availability of credit that brought so many of the banks to near collapse. “That has upset some, as agriculture remains a safe sector to lend to,” he said. “Given the traditional loyalty of farmers to their bank, it is reasonable to expect that loyalty to be reflected in service, fees paid and access to credit.

“We hope banks appreciate that agriculture is in a better place than many business sectors but is highly capital intensive.”