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The Challenges Facing the Agricultural Industry

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As we move towards the summer months, and with Covid-19 at the centre of the UK’s focus, we take a look at the priorities of those working in the agricultural sector and the key issues they are facing. 

Paragon offers a range of agricultural finance solutions and we caught up with some of our customers and our commercial finance team, to find out what is on their radars during this time. 

Ed Morris - Milton Farms

"We have gone from one extreme to another this year, from where we had too much rain, to now where the soil is so dry that we are having problems getting things in the ground. 

At the moment we are busy planting potatoes and drilling maize and sugar beet. Things are all rather hectic!"

Russ Nicholls, Business Development Manager – Commercial Finance at Paragon added:

Most crop farmers are battling varying degrees of moisture within their soil and are almost having to deal with their farms on a field-by-field basis, which is far from ideal and much more time consuming.

"Staff shortages are also an issue, partly due to the ongoing Covid-19 issue, but also due to the fact that fewer and fewer people in the UK want to work in agriculture. For many agricultural businesses it’s not quite ‘business as usual’ but fortunately we are not too negatively impacted by coronavirus. Many farmers - crop producers mainly - are in fact experiencing a ‘mini boom’ as demand is up so much from the supermarkets."

Ben Sutton - Frank Sutton Tractors

"Most of our business has not stopped. We are a service-based company, serving the vital food producing industry and we are still busy providing new machines that have been pre-ordered and are now due for delivery, as well as servicing the equipment that is already out to our customers."

Russ commented: "Agriculture, mainly due to its long-established roots and the continual demand for food, has always been somewhat insulated from the ups and down that happen to other business sectors and the economy. Prices are up almost universally and costs (such as fuel) are well down on where they were last year."

David Walling  - Walling UK Limited

"Currently, despite the uncertainty across the UK, the agricultural sector has been very much business as usual, there remains some customers who will use the current situation to be hesitant as we found with Brexit in 2019 and we do regularly with weather implications. The overall split we have within our business between UK and export sales has been consistent with where it was 3 months ago."

Inherently, during times of recession, farming has tended to come to the fore in the UK.

"The customers involved in dairy and stock farming still needing to produce milk and fatten cattle/lambs to go into the food sector, we are likely to see a greater emphasis on the UK market for production of our own produce for the coming months, though buying decisions are also being tempered by reductions some companies are making in milk prices.

I’ve found so far that the agricultural businesses who had long-established buying plans to replace items this year are still going ahead with those plans. It’s important to remember that this time of year has long been a key time for the sector both in terms of entering the spring/summer season where the work is done and also with the tax year implications in the last six weeks or so still relevant to the customers."

 

Paragon Banking Group PLC.  Registered in England number 2336032.  Registered office 51 Homer Road, Solihull, West Midlands  B91 3QJ.