By Olivia Cooper
UK agriculture is almost 1bn better off in cash terms than it was a year ago, latest Bank of England figures reveal. But it is likely to be a short-lived respite.
Most of the cash has come from foot-and-mouth compensation. This allowed farmers to cut borrowings by 147m, and interest charges by 9.5m, in the year to September.
Deposits have grown by almost 800m in the same period.
But this cash will only remain banked until restocking begins in the spring, says John Colley, senior agriculture manager at HSBC.
“The majority of farmers will restock, but it will not be until the spring that we have a better idea of their intentions.”
Figures also show that borrowing rose by 190m in the last quarter.
This is mainly in the arable sector, and is in line with seasonal trends. But Mr Colley anticipates it will continue to grow through the winter.