One week after it was revealed that bank borrowing by Scottish farmers had risen to new record levels, NFU Scotland yesterday asked its members to provide details of their relationship with their bankers, especially relating to costs they face in obtaining or maintaining credit and overdraft facilities.
The latest borrowing figures to the end of May 2012 reached £1,670 million, some £56 million or 3.5 per cent higher than a year ago.
The Union said this information was important as it had already been contacted by members over pressures on their farming businesses from the current difficult harvest and the extreme increases in the cost of feed, fertiliser and fuel.
Union chief executive Scott Walker said the pressures on many farm businesses were building: “The poor weather means that harvest is proving to be time-consuming and costly. In many sectors, marketplace returns are poor to average and for those keeping cattle, sheep, pigs or poultry, feed costs are rocketing leaving prospects for autumn and winter gloomy.
“Anecdotally, some farmers have already had difficult discussions with their banks over long-term credit, availability of loans and access to sufficient overdraft facilities. Since the credit crunch, the fees associated with lending, and in particular overdrafts, have risen markedly despite the overall inherent stability in agriculture.”
The Union will be meeting the agriculture committee of the Scottish clearing banks in late autumn to discuss the results of the survey and the lending conditions affecting its members.