Natwest bank lend an additional £1.25bn to the agricultural sector

The bank will deploy this money through a variety of routes, including Green Loans, conventional loans, asset finance and increased overdrafts. The extra funds come on top of capital repayment holidays and reductions on small business loans announced last month.

In addition, 150 of NatWest’s agriculture relationship managers have been trained by the University of Cambridge and University of Edinburgh in sustainability so they can signpost farmers to the latest support on offer.

The new support is to help the industry deal with a variety of cost pressures, and to aid farmers in making the transition to more sustainable practices.

Farming businesses are facing inflation of over 25% and price hikes in the region of 200% for fertiliser, gas and fuel.

Other cost pressures are hitting feed, electricity, and seeds, as a result of the combined impacts of inflation, Brexit, and the war in Ukraine.

The bank’s analysis has found that costs on nitrogen fertiliser have increased almost threefold, with the cost around £760 per tonne – up from £280 in May 2021, due to much of the manufacturing taking place in Russia and Ukraine.

Energy costs are also continuing to affect the market with gas up 200% on 2021, and electricity up 40%. These combined input cost pressures are squeezing the farming industry’s margins tighter.

Head of agriculture at NatWest, Ian Burrow, said the UK farming sector was facing unprecedented cost pressures, caused by a perfect storm of external factors.

"Together these impacts are putting intense pressure on profit margins, and we know the sector needs access to funding to navigate through the coming month," he said.

“We are boosting our financial support for farmers by £1.25billion to help them through this challenging period. Our agricultural managers have in-depth knowledge of the sector, including being able to offer this individual financial support, where needed."