Bank offers loans for green projects
Bank offers loans for green projects
By Philip Clarke
ENVIRONMENTALLY friendly farmers are to be offered preferential terms to finance improvements to their holdings.
A new loan – the Farm Devel-opment Loan – was launched this week by NatWest Bank, aimed at helping farmers meet the cost of complying with both voluntary and compulsory schemes and regulations.
These include projects covering animal welfare, waste disposal, countryside stewardship, water storage and organic conversion. The launch follows the introduction of a similar loan scheme by Barclays Bank last month.
NatWest head of agriculture Brian Montgomery said the package had been developed to encourage farmers to make sure they were not harming the environment. But there is also a financial incentive. "From a profitability perspective, farm assured standard produce often attracts a premium price, so good environmental sense is also good business sense," he said.
Up to £75,000 is available under the Farm Development Loan with interest fixed at 8.99% for up to seven years. "This represents a discount of over 3% in the first year and 1.5% in subsequent years against our standard tariff," said the company.
No security is required for establishing the loan, though Mr Montgomery said applications would be scrutinised closely to ensure the projects were bona fide. But the overall aim was to provide a package that was easy to administer, easy to understand, with no arrangement fee.
"Agriculture is one of the most visibly regulated of all business sectors," said FW columnist and chairman of Linking Environment and Farming (LEAF), David Richardson at the Farmers Club launch. "It is generally accepted that farmers will have to outlay significant capital expenditure over the next few years if they are to retain their licence to produce food. I am pleased that NatWest has recognised this requirement through the offer of preferential finance."
• To encourage farmer uptake, the first 1000 successful applicants will qualify for a free LEAF audit – a self-assessment management tool designed to help farmers check they are operating in an environmentally sensitive way, normal cost £23.50.