Farm borrowing stays at record £9.6bn

New figures from the Bank of England show farmers managed to hold off borrowing more in the last quarter of 2006, but bank lendings remain at an all-time high of £9.6bn.

Barclays’ agricultural policy director Euryn Jones said there had been little change in total farm borrowings in the last quarter of 2006, but the underlying trend of increased farm borrowings continued.

“Receipt of single farm payments is key to farm borrowing in the last three months of the year, and while farmers in Wales and Scotland would have received their SFP before the end of December, no cheques in England would have been sent out.”

Tim Porter, agriculture director at Lloyds TSB, said that under the old subsidy regimes it would have been normal to expect farm borrowings to fall by £300m-£400m in final quarter figures due to crop sales and subsidy receipts.

“Compared to the previous year, an upward trend in farm borrowings remains.

“But in addition, bank deposits to the end of December rose to £3.5bn – an increase of 14% on the year.”

 

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