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Survey Shows Cashflow Challenges to Scottish Farms

NFU Scotland’s weather aid survey has revealed the extent of the financial pressure that many Scottish farming businesses are finding themselves under.

The Union’s latest survey, which closed on Monday 6 May, received more than 400 responses.  Initial analysis shows that two-thirds of respondents have had to seek an extension to banking facilities or a loan.  The results also showed that one in ten had been refused an extension to their overdraft.  

Looking ahead, 84 percent of respondents were bracing themselves for lower sales and output this year and almost half of respondents were anticipating that they may need additional finance as the year progresses.

The Union met with representatives of Scottish clearing banks recently and has written to banks today to underline the position many farming businesses find themselves in as a result of the extreme weather endured in 2012 and the spring of 2013.

NFU Scotland will also be participating in the Scottish Government’s steering group that meets today (8 May) to consider the £6 million Scottish Government Weather Aid package announced last week.

NFU Scotland President Nigel Miller said:

“The level of pressure heaped on many Scottish farm businesses by the weather of 2012 and the spring of 2013 is extreme.  Our survey has confirmed that farm finances are creaking and that the majority of respondents have had to make arrangements to cover additional costs and cash flow problems.

“The level of disruption to both arable and livestock farms means that it is likely to be 2014 before many farm businesses will see any significant improvement in their position.

“The analysis of our survey is underway but it is clear the area of winter crop ploughed in is significant and much of the remaining oil seed rape acreage is compromised at best.  Extra feed is still being required on livestock farms and costs will continue to mount over the May period.

“The response on some farms has been the forced sale of livestock earlier than planned to buffer cash flows with others postponing intended investments.  That has implications for the industry beyond the farmgate.

“The banks have the ability to provide a bridge out of these difficult times. Without the option to extend credit, there is a danger that viable businesses will be damaged or lost.

“We met with Scotland’s clearing banks recently and we have written to them again urging them to be proactive in supporting farm clients.  Banks are well aware of the pressure and some have already improved access to business reviews and borrowing arrangements.   That is welcome but this survey shows the need for that approach to be adopted by all lenders and the need for such support to remain available through 2013 and beyond.”

Ends

Contact Bob Carruth on 0131 472 4006

Date Published:

News Article No.: 64/13


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