Barclays is extending the £100 million ($129.3 million; €113.4 million) UK Farming Loan Fund, a vehicle it launched last year, making another £100 million available to farmers to invest in business efficiency, agtech and to diversify into new revenue streams.
The first fund was launched “to support farmers in the immediate aftermath of the EU referendum,” the bank said in a statement. The bank is now extending the fund “in response to strong take-up and to help the sector to navigate uncertain times ahead.”
Barclays Agriculture also announced the introduction of new financial products including Barclays’ Input Finance, which offers farmers both short-term and long-term cashflow support with loan periods ranging from one to 24 months. Barclays’ Rural Project Loan is aimed at helping farmers with additional income streams to diversify or restructure their existing agribusiness. Repayments are spread over one to 25 years.
The announcement comes just one month since a National Farmers’ Union (NFU) survey revealed that UK farmers are becoming increasingly worried about a post-Brexit future. According to that survey, 20.1 percent of respondents said they would be decreasing investments as a result of the EU referendum result.
“We welcome this announcement from Barclays,” NFU deputy president Minette Batters said. “This comes at a time where despite the tentative signs of price recovery, the sector is still far from seeing levels which will sustain a long-term and profitable farming industry.”
Last year, when Barclays first launched the fund, farmland prices had experienced the sharpest drop since the 2008 financial crisis – albeit from unexpectedly high levels in 2015.
However, this year, according to estate agents Strutt & Parker, the value of farmland in England seems to be leveling out after two years of gradual decline.
“The past six months have been a time of unprecedented political and economic uncertainty, thanks to the Brexit vote and a snap general election,” Michael Fiddes, head of estates and farm agency for Strutt & Parker, said in a statement. “However, despite the turmoil, land prices have held up remarkably well.”