Barclays can trace its earliest deal in UK Agriculture to being as far back as 1744 – in the following period of over 270 years since we have supported the sector through many periods of change and challenge. While during that time we have also been at the forefront of much change, innovation and financial sector firsts – from launching the world’s first cash dispenser in the 1960s to more recent innovations like cheque-imaging and Pingit, the phone-to-phone payment system. Clearly Barclays has an understanding of the need for innovation and, especially in this current era, the use of technology to improve efficiency and keep business productive, profitable, viable and vibrant.
Overall debt to the UK agricultural industry sat at over £18.5 billion in Quarter 4 2017, with credit balances sitting at over £7 billion in the same period – with debt levels being significantly higher the demand for funding and investment capital is clear. As a bank embedded within UK agriculture we often see the trends of agricultural expenditure as they happen, especially with little raw investment date available. While requests for land purchases always remain strong they in fact form less than half of the new funding requests – judged by amount. The large capital expense of a land purchase and long payback time on the investment means that some farms are looking at efficiency improvements and investment in infrastructure as a means of securing business viability in the longer term. Investment is across the board – robotic milking machines, GPS mapping for arable farms and some of the technology in use across the pig and poultry industry has been in place for many years.
From a banking perspective, not only does the investment provide efficiency and innovation it also provides an indication of the forward thinking nature of the management team. With most in the sector falling into the category of price-takers at the farm gate, it is management which most banks need to take a view on for any funding request. However, it can also provide a huge amount of management data on enterprise performance, yields, and if tied in with a book keeping system it can all provide up-to-the minute management and financial information and ensure the business operator is in complete control of the production on the farm, and knowledgeable about finance requirement from working capital perspective – a sign of good business management.
The industry is alive with the buzz word that Agri-Tech has become and now it needs to look at how to embed new technologies into the industry swiftly and completely, as they happen. The technology that seems jaw-dropping today soon becomes tomorrow’s common place – just look at the innovation in mobile phones since they first appeared. A business which does not invest and embrace the latest innovation can soon become too out dated to catch up.
If you are looking to finance a budding business idea in the Agri-Tech sector or to invest in technology for your farming business to improve efficiency and competitiveness and want an informal chat, call Craig Sigley, Barclays Regional Agricultural Manager, on 07775 543705 to discuss how we might be able to help.