NATWEST is lending £1.25 billion to UK farmers to help the industry deal with increasing costs and create more sustainable ways of working.

Businesses in the UK agriculture sector are facing inflation of over 25 per cent and prices tripling for fertiliser, gas and fuel, as well as a raft of other cost pressures on feed, electricity, and seeds as a result of the combined impacts of inflation, Brexit, and the war on Ukraine on supply costs.

So, in response, the bank will provide money through routes including Green Loans, conventional loans, asset finance and increased overdrafts, to add to capital repayment holidays and reductions on small business loans that announced last month.

Plus, 150 of NatWest’s agriculture relationship managers have already been trained by the University of Cambridge and University of Edinburgh in sustainability so they can signpost farmers to the latest support on offer.

The bank’s analysis has found that costs on nitrogen fertiliser have increased almost threefold with the cost around £760 per tonne - up from £280 in May 2021, due to much of the manufacturing taking place in Russia and Ukraine.

Energy costs are continuing to affect the market with gas up 200 per cent on 2021, and electricity up 40 per cent.

These combined input cost pressures are squeezing the farming industry’s margins tighter.

NatWest’s head of agriculture Ian Burrow said: “The UK farming sector is currently facing unprecedented cost pressures, caused by a perfect storm of external factors.

“Inflation, supply chain challenges and the war in Ukraine are combining to cause steep rises in the cost of essential materials for the sector such as fertiliser and feed, on top of the broader challenge of fuel and energy costs that the wider economy faces.

“Together these impacts are putting intense pressure on profit margins, and we know the sector needs access to funding to navigate through the coming months.

“We are boosting our financial support for farmers by £1.25billion to help them through this challenging period. Our agricultural managers have in-depth knowledge of the sector, including being able to offer this individual financial support, where needed. We would urge affected customers to get in touch with their local agriculture relationship manager to discuss how we can help.”

To contact NatWest’s agriculture team, email or your local agricultural manager. Business customers cancall NatWest Business Banking on 03457 114 477.