A new report published today by NatWest Group has found that the UK must prioritise food security in the Agricultural sector if it is to avoid continued shortages and production issues in the long term.
The UK has seen a variety of food shortages in recent months, with availability and production of items such as eggs, cucumbers and tomatoes all affected by a perfect storm of record energy inflation, post-pandemic supply chain disruption, the war in Ukraine and the unpredictable effects of climate change.
As the report highlights, recent findings from the National Farmers Union suggest that further challenges are imminent; 40% of beef farmers and 36% of sheep farmers are planning to reduce numbers in their herds in response to input cost challenges, posing further issues for retailers and consumers alike.
The report identifies three key areas of focus to future proof the sector:
- The agriculture sector should be classified as a critical strategic industry, with a clear government strategy that reflects the entire food system
- A common set of metrics should be agreed which define the environmental outcomes farmers need to achieve in pursuit of Net Zero
- Farmers should be financially rewarded for achieving these outcomes through discounted finance or access to improved investment - retailers and manufacturers should offer favourable procurement and payment terms
In recognition of these three areas, NatWest Group has announced a set of partnerships to drive progress across the sector.
The bank, through its Asset Finance arm Lombard, has announced a partnership with the UK’s largest manufacturer of frozen potato products McCain, to offer its potato growers increased funding support and preferential terms. This will be matched by McCain for assets that support regenerative agriculture, aligned to their global commitment to implementing these practices across 100% of its potato acreage by 2030.
This partnership is one of the ways the bank is helping deliver a total commitment, announced today, of £6.7billion of lending to farmers, helping them invest in their operation. This total includes the £1.25billion lending package that NatWest announced to support the sector with challenges posed by inflation last Summer.
To provide the tools and platforms needed to measure data, NatWest Group has selected Google Cloud in conjunction with Climate Engine’s SpatiaFi software, to harness geospatial analytics to automate key climate related data and linking defined fields and property to a customer’s registered address, helping farmers build a tailored picture of the challenges facing them, from flood and drought risks, to biodiversity. This will then help farmers identify, track and respond to these key areas of risk, and report more simply on common metrics.
Finally, to accelerate change at an industry wide level, the bank is also working with WWF-UK to bring together UK Government, food companies, farming organisations, financiers and NGOs to focus on financial and practical interventions to support farmers, such as incentives for farmers to collect data and the adoption of common metrics.
Alison Rose DBE, Chief Executive, NatWest Group said:
“The UK Agriculture sector is at a turning point, facing higher costs, declining domestic production, supply chain issues, inflation, and what many see as the daunting challenge of net-zero. With just under half of the actual food on plates now produced in the UK – compared to 78% in the mid-1980s* – it is clear the industry needs collective action for a sustainable and secure future.
“NatWest has now committed £6.7billion of total funding to this sector, and we will continue to stand by farmers to invest in their transition, whilst continuing to focus on financial solutions and partnerships, such as those with McCain, WWF-UK and Google that we have announced today to help drive this change.”
* UK Government 2021 Food Security Report
Minette Batters, President, National Farmers’ Union said:
“The UK needs to decide what it wants from the agriculture sector and the clock is ticking. Our sector employs over four million people across the UK and is worth £116billion to the UK economy*.
“The industry, stakeholders, British public and Government need to come together to create a plan for the sector and the future of food production – partnerships are the only way we can solve the real problems our sector faces for the future prosperity of British farming.”
*NFU British Farming Report 2022
For more information or to request interviews please contact Mike Johnston at NatWest press office, 07584 403860, mike.johnston@natwest.com
Disclaimer:
This is for media use and not a financial promotion.
The £6.7bn lending package will be deployed through a variety of routes, including Green Loans, conventional loans, asset finance and increased overdrafts.
Information about Lombard
Security, guarantees or indemnities may be required. Product fees may apply. Finance subject to status and is only available for business purposes unless otherwise stated. Over 18s only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it. Specific Criteria and Terms apply.
For more information visit https://www.lombard.co.uk/
Download the latest NatWest Agriculture Report here. (PDF 6.1 MB)
