Through uncertainty comes growth

The research showed that more than a quarter (27 per cent) of farming businesses expect a positive impact on their business if no trade agreement is reached with the EU, while nearly a fifth (18 per cent) expect a negative impact. Almost a quarter (23 per cent) did not expect any impact at all, and 32 per cent said they didn’t know.

This is a clear split in opinion across the farming sector over what will happen if no trade agreement is reached with the EU, and it’s this lack of clarity that continues to be at the forefront of our farming customers’ minds.

For many farmers, stepping away from the EU’s Common Agriculture Policy presents an opportunity to start afresh and focus on British interests, while the impending publication of the new Agricultural Bill, detailing government plans for the farming sector post-Brexit, continues to create uncertainty.

But despite the current climate, we’re still seeing a strong appetite from farmers across Shropshire who want to secure borrowing to help them achieve their growth plans.

Many are looking for new ways to boost their income and diversify away from their reliance on more traditional farming activities and some of the higher yielding returns lie in leveraging the value of the farm to borrow, and then invest in new ventures, such as converting property for residential use, holiday lets or storage.

More and more agricultural businesses are realising the benefits of term loans to achieve this type of diversification, and we’ve seen a shift towards these types of products, with customers clearly recognising the advantages and security of longer term borrowing.

Longer term lending on term loans, with no break clauses for the length of the loan can mean that farmers benefit from the return on investment and have more certainty over the life of the loan.

Farming businesses need to prepare for the future by ensuring they have the working capital available to continue to grow and navigate times of uncertainty. And, during times of economic uncertainty, it’s important that they have a trusted banking partner on-hand to guide them.

While economic changes can cause pressure and uncertainty, they can also create opportunities. It’s important for farmers to consider their options for growth and discuss the viability of diversification projects to ensure they’re well positioned to evolve and succeed, whatever the future holds.

David Knight is the Midlands Area Director for Lloyds Bank Agriculture