Farmers, financial experts and politicians discussed the challenges facing agriculture in the East of England as part of Lloyds Banking Group’s The Big Conversation: Helping Britain Recover
How can farming get through the tough months ahead? Lloyds Banking Group brought together farmers, financial experts and politicians for an online event to explore that question. Entitled ‘Weathering the Storm – Building Financial Resilience in the East of England Agriculture Sector’, the discussion, which will be available to view online, was one of a series of events in Lloyds’ Big Conversation: Helping Britain Recover.
Representatives of the National Farmers’ Union, farming mental health charity YANA – You Are Not Alone, the Confederation of British Industry (CBI) and the Money & Pensions Service joined Mid-Norfolk MP George Freeman and Lloyds experts to look at the challenges facing agriculture in the East of England. This included how to build economic resilience and prepare for economic recovery, while exploring initiatives or policies that could help facilitate the process.
After the event, Mr Freeman and host Matt Hubbard, Lloyds Banking Group’s Ambassador for the East of England, highlighted some of the key points raised in the discussion.
The challenges
On top of a poor harvest this year and more bad weather, the panel was concerned about the switch to the new system of direct support, as well as a possible loss of foreign labour following Brexit and the impact of a trade deal – and there is still Covid-19 to contend with. “The truth is, we’ve never known farmers to face such uncertainty,” said Mr Freeman.
“As an industry run largely by small family-owned businesses on tiny profit margins made volatile by the weather and crop diseases, agriculture needs a consistent long-term policy framework to be able to invest in,” he concluded.
The discussion highlighted that, as hard as it is just facing these problems, the challenges are compounded by the toll it all takes on farmers’ mental health. “Our bankers are able to see the impact these pressures have,” said Mr Hubbard. “We can’t emphasise enough the importance of talking early and using the support that is available.”
Financial resilience
The panel agreed that building financial resilience is complicated by the uncertainty about future support, the impact of trade deals, changes to pesticide legislation and the labour market. “It’s important for farmers to have a clear vision and share that with their banker at an early stage to get advice on all financial options – and to keep a constant dialogue as things change,” said Mr Hubbard. “Lloyds has been around for more than 250 years and we can help farmers keep their business going though these tough times.
“We can help them from the cradle into their later years, looking both at the farm finances and their personal finances,” he added. “This can be a real challenge in agriculture, where owners’ finances are intertwined with those of the business.”
The panel also highlighted how low margins and the drive for low-cost food threatened the resilience of the whole sector. “UK food has never been more plentiful or affordable,” said Mr Freeman. “The challenge for farmers when it comes to increasing margins is to add more farmgate value and tap into growing consumer willingness to pay a premium for provenance assurance.
“This needs to be done alongside ensuring high-quality basic food for hard-pressed consumers. There are many things supermarkets can do to reduce the cost of packaging, food miles and food waste.”
Initiatives and policies
The panel called for action on a number of fronts – from soil health and green initiatives to clarity about how the Sustainable Farming Initiative and Environmental Land Management Schemes that replace EU-based support payments will work.
“To me the industry needs three key things,” said Mr Freeman. “First, short-term reassurance and clarity that Brexit and free trade will not abandon UK farmers. Second, a clear framework for environmental grants and support for innovation and diversification. Third, a UK “fair trade” Policy that uses variable tariffs to give UK farmers a level playing field and create export markets for UK Agritech innovation.”
“There are so many factors that feed into resilience in agriculture – and other areas,” says Mr Hubbard. “This is why the Lloyds’ Big Conversation is helping create a plan to rebuild the economy.”
To find out more about The Big Conversation, click here, and for more on Lloyds Banking Group, click here.
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