AFTER a challenging year following the impact of the Covid-19 pandemic and Brexit, a recent farmer survey shows growers are increasingly looking at alternative finance options to help maintain or grow their businesses.
Finance lender and agricultural finance specialist Propel conducted the survey of farmers across the country to reveal their economic outlook.
It revealed the following:
• 75% of farmers are looking to acquire assets in the next 12 months.
• Nearly 60% of farmers feel positive about the financial outlook for the farming industry over the next 12 to 24 months.
• Only 22% of farmers expect the impact of Covid-19 to be a main constraint to growth in the next 12 to 24 months.
• Asset finance is the most popular form of alternative finance, with 86% of farmers seeing clear benefits to using it to acquire machinery and vehicles.
The survey highlighted a growing interest in acquiring new tech, particularly renewable energy equipment. Three-quarters of respondents are now looking to acquire additional assets. Tractors and trailers remain the most common items, but now renewable energy technology has become the third most popular area of investment.
More than three quarters (76%) of those interviewed are now exploring the use of high tech equipment on their farms. The most popular areas under active consideration are advanced weather forecasting, DNA soil testing and drone mapping and crop spraying, which points to an ongoing desire to continue to modernise and automate UK agriculture.
The survey also shows that UK farmers are increasingly looking at alternative finance options to help maintain or grow their businesses. The findings highlighted that asset finance is the most popular form of alternative finance, recognised for conserving working capital (41%), offering affordable payments (35%), and simple budgeting (30%).
Post Covid-19 farmers are also increasingly optimistic about their outlook, with over half of respondents (58%) feeling positive about the financial outlook for the farming industry over the next 12 to 24 months, with 13 percent giving a ‘very positive’ view.
However, the sector is not without its challenges, with rising costs identified as the main constraint to growth over the two years. Farmers were also concerned about the cuts in the Basic Payment Scheme (BPS), despite the Government’s sustainable farming approach announced in November 2020.
Commercial Director of Propel, Jon Maycock, said: “Diversification in the farming sector is well underway, and at Propel we’ve seen our clients’ continued desire to engage with and invest in technology ranging from herd GPS to items such as robotic laser weed killers, a more environmentally friendly form of weed management to herbicides. We will continue to support UK agriculture through this shift, just as they have supported the nation by putting food on the table throughout the pandemic.
“Despite all the hardships the sector has suffered over the last 18 months, UK farmers have come back swinging. However, the sector’s optimism should not be taken for granted. As farms emerge from the pandemic, it is vital that they are able to access fast and flexible finance to invest in the critical machinery and technology they need to drive future productivity and growth.”