The Courier & Advertiser (Fife Edition)
Bank offers help as inflation hits hard
The Royal Bank of Scotland (RBS) has unveiled a package of support to help Scottish farmers who are being hit by inflation of more than 30%.
As fertiliser, fuel, feed and energy costs continue to escalate, the bank’s measures include capital repayment holidays, increased overdraft limits and reductions in the interest rate on small loans.
The bank’s analysis has found costs on fertiliser have increased three-fold, with the cost per tonne now sitting at around £850, up from £280 in May 2021, while gas is up 200% and electricity 40%.
These combined input cost pressures which are due to the combined impacts of inflation, Brexit, and the war in Ukraine means margins are being squeezed ever tighter.
The bank will offer capital repayment holidays – where the business only needs to pay the interest on
a loan for an agreed period, reducing the amount due each month – as well as increases to overdrafts. For smaller businesses in the agriculture sector, the bank announced reductions in interest rate on its range of Small Business Loans up to £40,000, by between 0.5% and 1.35% dependent on term and amount.
RBS head of agriculture Roddy McLean said: “Our agricultural managers have in-depth knowledge of the
sector, including being able to offer individual financial support, where needed, to help customers navigate high energy, feed and fertiliser prices. We would urge affected customers to get in touch with their local agriculture relationship manager to discuss how we can help.
“As always, we are also here to support our customers in the long-term. That’s why we encourage customers to discuss the impact on their own individual business with a relationship manager to establish how we may be able to support them.”
RBS has a Green Loan and Green Asset finance product, allowing businesses to borrow with no fees for clean energy.
NatWest Group, the RBS parent brand, has published a white paper recommending a series of measures that should be taken by policy makers, financial services and the sector itself to help achieve a sustainable, naturepositive transition.
Head of climate economics and data Dr Maria Carvalho said there were “huge commercial opportunities” for farmers who are transitioning to lower-carbon, naturepositive production.
They ranged from a reduction of input costs, to unlocking price premiums from food retailers and accessing the benefits of green finance.