Uncertainty surrounding world markets could extend to the farming sector, with tenanted holdings and those with high borrowings at greatest risk.

“We have seen a significant tightening in the way that financial institutions deal with our members when they step into the red,” said George Dunn, chief executive of the Tenant Farmers’ Association.

“We are worried that borrowing will not be as easily available as it was in the past,” he added.

“It is beginning to concern us that the availability of credit, both short- and long-term, is going to cause severe problems as we head towards harvest and people get to the bottom of their reserves.”

Farmers with a poor financial history, in depressed sectors like pig production, could also struggle to extend loans or refinance existing arrangements, said Pat Tomlinson, head of agriculture at Barclays Bank
 
“If you represent a high risk to a bank you might find it harder to get credit, or it will become more expensive.”

However, agriculture as a whole presented a low risk to banks, and would be one of the last sectors banks would withdraw from, he reckoned.

“There has been absolutely no impact on our credit appetite for agriculture and I suspect that’s the same for the main four banks.”

Smaller, secondary lenders, or those with borrowing based on the London Interbank Offered Rate, rather than the Bank of England’s base rate, could present more of a risk.

But with lenders such as Barclays forecasting as many as three 0.25% cuts by August, the cost of borrowing could drop for some in farming.

“At this stage I suspect agriculture will have a minimum impact from the credit crunch and could even benefit if other sectors are perceived as more risky,” said Martin Coward, agricultural director at HSBC.

But volatility, in both commodity and financial sectors, was likely to continue, and farmers had to speak to their lender to plan the best way forward, he added.

“For a business to react quickly to volatility the last thing it needs is to have too much debt or to have it structured incorrectly.”