WITH farm businesses in the north facing unprecedented pressures including inflation of 30 per cent and price hikes in the region of 200 per cent for fertiliser, gas and fuel, Ulster Bank said it is offering a range of measures to help with cost challenges.
Analysis carried out by Ulster Bank’s parent NatWest Group found that costs on fertiliser have increased three-fold, with the cost per tonne now sitting at around £850, up from £280 in May 2021, due to much of the manufacturing taking place in Russia and Ukraine.
Energy costs are also continuing to affect the market with gas up 200 per cent on 2021, and electricity up 40 per cent - combined cost pressures which are squeezing the farming industry’s margins tighter.
In response, Ulster Bank said it is now introducing a package to help support customers in the agriculture sector with individual financial support available for those hit by increased farm running costs.
It 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.
Earlier this year, Ulster Bank launched a new Green Loan and Green Asset finance product, allowing businesses to borrow with no fees to invest in eligible clean energy, clean buildings, clean transport, and agriculture.
The products are one of the ways the NatWest Group is delivering on a commitment to lend £100 billion of climate and sustainable funding and financing by 2025.
Cormac McKervey, senior agriculture manager at Ulster Bank, said: “We know this is a challenging period for many of our customers in the farming sector so felt it necessary to introduce further assistance. Our team of relationship managers have in-depth knowledge of the sector, including being able to offer individual financial support, where needed, to help our customers navigate high energy, feed and fertiliser prices.
“We are here to support our customers through these difficulties and in the longer-term. So, we are encouraging customers to take the time to discuss the impact on their own individual business with a relationship manager so we can put the right measures in place to mitigate some of these pressures.”
He added: “One opportunity which does exist for the agri-food sector here is that there are significant commercial opportunities for those who transition to lower-carbon, nature positive methods of food production. Those with green business practices in place are already seeing a reduction in input costs and have the potential to unlock price premiums from food retailers.
“We want to encourage more of our customers to take advantage of such opportunities and access the benefits of green finance, not just for their own growth, but for the wellbeing of society and protection of our planet.”
