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How might Brexit affect farmers’ ability to borrow?

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By Peter Wright FRICS FAAV, AMC Agent, Balfours, Craven Arms.

We know that we shall be coming out of the EU but when and how this may happen is anyone’s guess. I voted to remain with my head but my heart wasn’t in it. That said, the more I see of how the EU politicians and bureaucrats are reacting to the UK decision to leave the more I am convinced that we have made the right decision.  I hope so.

I’m amazed how many farmers I’ve come across who voted to leave. Without doubt there are producers who feel we should and could compete in the global market without Basic Payment support, or is it that all the red tape is more of an issue? I don’t think we’ve seen the last of either but at least it will be UK who will decide policy.

Since the recession, banks have favoured the agricultural sector as one of the few safe places for lending. In the last few years there have been some very disappointing end of year accounts which, added to all the talk of uncertainty, may have some bearing on how the banks might adjust their lending policy.

Interest rates cannot fall much further and now I see that fixed rates are just beginning to nudge upwards, which is a sure sign that the base rate may be raised. We’ve been speculating on this for at least six years and it’s never happened, but it will, we just don’t know when.

A deal with the USA may well mean an influx of cheap farm produce into this country. Our supermarkets you can be sure will take advantage of this knowing that most housewives buy on cost, not always on quality, which will make it difficult for British farmers.

There is never a better time than now, to reappraise existing farm enterprises and manage risks that the threatened future uncertainties may bring. There will be opportunities but these invariably will require investment.

Now is the time to be securing extra borrowing facilities. AMC’s Flexible Loan is an ideal starting place in providing a degree of unspecific working capital for businesses so that when decisions need to be made they can be swiftly acted upon.

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