NatWest has announced a £1.25bn lending package for Britain's farmers.
The high street bank, which has 40,000 agricultural customers, said the cash would help the sector deal with a variety of "cost pressures" - and assist farmers transition to more sustainable practices.
The cash will be deployed through a variety of routes, NatWest said, including green loans, conventional loans, asset finance and increased overdrafts. In addition, 150 of NatWest’s agriculture relationship managers have already been trained by the University of Cambridge and University of Edinburgh in sustainability so they can signpost farmers to the latest support.
The news comes as Britain's agricultural sector faces price hikes for fertiliser, gas and fuel, animal feed and seeds.
“The UK farming sector is currently facing unprecedented cost pressures, caused by a perfect storm of external factors. Inflation, supply chain challenges and the war in Ukraine are combining to cause steep rises in the cost of essential materials for the sector such as fertiliser and feed, on top of the broader challenge of fuel and energy costs that the wider economy faces," said Ian Burrow, head of agriculture at NatWest.
"Together these impacts are putting intense pressure on profit margins, and we know the sector needs access to funding to navigate through the coming months."
NatWest recently carried out research that found the cost of nitrogen fertiliser had increased almost threefold to 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, NatWest said, with gas up 200% on 2021, and electricity up 40%.
Last month the bank published a new white paper - Financing nature-positive transitions in the agriculture sector - exploring the need for a sustainable transition in the industry.
The report found that near-term investment in agricultural infrastructure, ambitious policy incentives and a common set of metrics need to be prioritised if the UK is to benefit from a sustainable food and farming system.
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