Scottish farmers are being urged to consider AMC finance to ensure their financial stability following concerns that this year’s vital subsidy payments may be delayed by up to five months, with payments made in March or April 2016, rather than the expected November and December.
Following cabinet secretary Richard Lochhead’s admission that as many as 21,000 applications have yet to be processed before the end of December it has now been reported that bankers have set aside a half billion pounds to save farmers from destitution.
Leading land and farming agent, Bell Ingram, shares the banks concerns, fearing some farms could be left with absolutely no working capital, following an extremely tough year for the sector.
Malcolm Taylor, head of land management at the firm, says the anticipated delays to the new Basic Payment Scheme could leave some farms unable to trade for months and is urging those affected to look at the options provided by AMC (Agricultural Mortgage Corporation).
In addition to the payment delays - the current price and over supply issues in potato farming, the political uncertainty thrown up by recent UK and upcoming Scottish elections, the continued fragility of the UK economy and the unrest in world markets, all add up to make it a very worrying time for Scottish farmers.
Mr Taylor is concerned many farmers may see the delays as the final straw, but has urged them to consider AMC financing as an option to bank loans to both safeguard any immediate funding issues and to improve their long-term financial security.
He said: “When it comes to finance everyone likes and needs certainty and that is especially true in the farming world – even before these delays were known.
“The past mild winter has made potato farming in particular very difficult this year with some having to cope with up to £100 losses on a tonne and that is simply unsustainable for those who will not receive their subsidy payments this year, unless they have the luxury of a large amount of capital to call on.
“Then there is the uncertainty over UK and Scottish politics, quantitative easing in Europe, recession in China, oil price uncertainty, unrest in the Ukraine and the European vote – all of which make it a very uncertain world for farmers right now.
“Knowing exactly what a litre of oil will cost and the price of a tonne of fertilizer together with knowing what finance costs are all make budgeting easy. With the high street banks looking to increase facility fees and overdraft fees, now is the time to consider the benefits of borrowing from the AMC.”
AMC products are based around farmer’s financial planning and offers far longer term and lower rates than typical high street banks offer.
Head of AMC for Bell Ingram, Stewart Hamilton said: “The ability to fix borrowing at under 5% for up to 30 years must be an attractive proposition to farmers. Base rates are likely to rise, all be it slowly over the next few years, but knowing exactly what finance costs will be for customers of the AMC must be seen as giving security in these uncertain times.
“In addition the AMC flexible facility can allow farmers to run this instead of an overdraft or alongside an existing facility.”
“The two AMC products, the Standard Loan for between 5-30 years and the five year Flexible facility are designed specifically to help farmers run their businesses with certainty and without annual renewal meetings. As its name suggests the Flexible Facility is an ideal way to help cash flow issues.”
The AMC uses a network of local agents like Bell Ingram with specialist local knowledge, based in offices throughout Scotland.
With over 85 years in the agricultural lending market the AMC is well equipped to tailor the financial requirements for individual farming businesses. Once a loan is agreed, depending on future requirements, farmers will not be bothered by agents, they are simply left to run their businesses.
The AMC can look at funding land purchases, the provision of working capital, refinancing existing facilities and even funding and refinancing Hydro and wind energy schemes. Taking advantage of low interest rates must make sense for many businesses giving them a degree of certainty in these uncertain times.
Established over 116 years ago, Bell Ingram has 130 professional staff across 11 UK offices, including chartered surveyors, estate and forestry managers, architects, planners, GIS specialists and estate agents.