Agricultural Bank Lending November 8, 2013 12:00 am Latest figures from the Bank of England show agricultural borrowing at their highest ever levels. The quarter to the end of September 2013 saw lending to agriculture jump by over £500 million to £14,765 million. This is a larger quarterly rise than seen in recent years. As shown by the chart below, the growth in borrowings over the last 12 months has risen much faster than trend. This indicates the cashflow pressure faced by many UK farmers. The figures may drop in December as has historically been the case when the SPS is paid into farmers’ bank accounts. Deposits have remained fairly static in the last quarter. This, combined with the increase in borrowing, this has resulted in the highest ever net lending to agriculture. With base rates at their current historic lows, this increasing debt is of little concern on the average farm. However, when interest rates rise, as they undoubtedly will at some point, this borrowing could be a a major problem to some businesses.
