Risk management and capital investment underpinned by supportive agricultural banking will be critical as UK farming moves towards a post-Brexit future.
This was the agreement at a recent meeting of NFU president Meurig Raymond and Lloyds Bank head of agriculture Andrew Naylor, where banking’s role in helping farmers manage market volatility, smoothing the path towards new agricultural and environmental policies, and managing global issues such as antimicrobial resistance were discussed.
Mr Raymond said volatility of markets continued to be a concern. “Dairy markets in particular are worrying. They are rising now from their prolonged downturn, but not quickly enough.
“The banks have a role in helping farmers affected by depressed markets to plug short term shortfalls in cashflow, but also in reducing risk, for example through hedging on commodity products or fixing exchange rates.
“Ability to secure low cost, long term borrowing to improve infrastructure will also be important, alongside capital allowance support from the Treasury. For example, better buildings help improve efficiency and animal health, which increase competitiveness and marketability. This also helps us keep our global commitments such as reducing the need for antibiotics to treat sick animals,” he added.
The long term prospects for the UK’s food and drink were also discussed, with Mr Naylor outlining the reduced confidence in ‘provenance’ felt by the industry, as identified in Lloyds Banks’ latest Food and Drink Research report.
Mr Naylor said: “Despite the wide array of foods produced across the UK that promote their origins, or have the area they come from or their unique story protected under EU schemes, the report shows food and drink manufacturers think opportunities to capitalise on provenance have fallen over the past 12 months.
“This could be because of uncertainty over the future of our EU ‘Protected Designation of Origin’ and ‘Protected Geographical Indication’ statuses following the referendum. Alternatively, food and drink companies could be seeing cost-conscious consumers simply prioritising the price of goods over provenance in their buying decisions.
“Either way, the proportion of companies who think English and Welsh produce has a good reputation internationally has held firm at 86 per cent, and this should be a clear signal that there is a future in investing in the development of existing and new brands based on regional attributes.”
This was echoed by Mr Raymond, who added that it was important to promote the quality standards of British food.