Rumours abound that banks plan to foreclose on farms

17 February 1998

Rumours abound that banks plan to foreclose on farms

By Boyd Champness

BRITAINS four major banks will start foreclosing on cash-starved farms in north Wales and south-west England next month, according to a prominent south-west farmer.

Outspoken Devon farmer Richard Haddock said 150 farmers in north Wales, and a further 30 or more he knows personally in the south-west region, are expected to go out of business within the next month or two.

Mr Haddock said recent talks with regional bank managers revealed that they would start foreclosing on farms by the beginning of Spring.

He said bank managers had told him that they were prepared to wait until the end of February to see if Government was prepared to allocate more money to the ailing livestock industry before sending in the receivers.

However, Mr Haddocks claims are not supported by bank chiefs, nor by the NFUs Welsh headquarters, which has checked up on the assertions.

And a Farmers Union of Wales spokesman also rejected the claims, saying most bank managers were “bending over backwards” to keep farm businesses afloat.

Midland Bank agriculture director Norman Coward said: “If there really were 150 farmers in north Wales likely to be closed down by Spring, then the other three major banks must have many more bad debts on their books than Midlands.”

While Allison Bradford, from Lloyds Bank, said: “There is no substance to that rumour whatsoever.” But she conceded that many livestock producers would start to feel the pinch once their tax bills arrived in March.

Mr Haddock – under pressure from his own bank – said tenant farmers who have borrowed money against the value of their stock are those most at risk.

“Prior to the BSE crisis the average price for a cow was about £800. Most tenant farmers were allowed to borrow up to 50% to the value of their animals. Now that the crisis has hit, these animals are only worth about £400 and a lot of people are getting caught out,” he said.

“Most farmers are not prepared to say anything. They are shutting themselves away because they are afraid that if they go public, then no one will supply them with cattle, feed or seed,” he added.

Tenant Farmers Association chief executive George Dunn does not refute Mr Haddocks claims, but said the association has not received a barrage of complaints from “grassroots” members that the banks are being heavy-handed with them.