Farmers optimistic about post-covid growth
Propel has released a landmark study revealing the financial outlook among farmers post-pandemic; and indicates the key investments that farmers are planning and how they intend to finance them.
Nearly 60% of farmers feel positive about the financial outlook for the farming industry over the next 12 to 24 months.
Just 22% of farmers expect the impact of Covid-19 to be a main constraint to growth in the next 12 to 24 months.
75% of farmers are looking to acquire assets in the next 12 months.
Asset finance is the most popular form of specialist finance, with 86% of farmers seeing clear benefits to using it to acquire machinery and vehicles.
After a challenging year for farmers, caused by the COVID-19 pandemic and Brexit, the survey highlighted farmers’ growing interest in acquiring new technology, 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.
Respondents are most likely to have already implemented renewable energy diversification opportunities on their farms. Other assets currently being considered include camping, caravanning and glamping.
The survey also shows that UK farmers are increasingly looking at specialist finance options to help maintain or grow their businesses. The findings highlighted that asset finance is the most popular form of specialist finance, recognised for conserving working capital (41%), offering affordable payments (35%) and simple budgeting (30%).
UK Agriculture is in the midst of change at a pace not seen in over a generation. Rising input costs, the shape of the market post Brexit, the phasing out of the Basic Payment Scheme (BPS) and the uncertainty caused by the pandemic are just a few of the significant additional factors that UK farmers are having to grapple with.
Despite all the challenges the farming sector has suffered over the last 20 months, UK farmers have been working to move food from farm to fridge throughout the pandemic. 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.
To read the full National UK Farm Finance Report, click here.
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