NatWest to help farmers with £6.7bn as report reveals long term food security risks
The report cites 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.
Recent findings from the National Farmers Union suggest that further challenges are imminent, with 40 percent of beef farmers and 36 percent of sheep farmers planning to reduce herd numbers in response to input cost challenges, decisions that will pose further issues for retailers and consumers alike.
The report identifies three key areas of focus to future proof the sector:
1. The agriculture sector should be classified as a critical strategic industry, with a clear government strategy that reflects the entire food system
2. A common set of metrics should be agreed which define the environmental outcomes farmers need to achieve in pursuit of Net Zero
3. 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, NatWest is introducing a set of partnerships to drive progress across the sector.
READ MORE: Farmers demand urgent support as industry teeters on cliff edge of catastrophe
Through its asset finance arm Lombard, it has announced a partnership with the UK’s largest manufacturer of frozen potato products McCain, to offer 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 implement these practices across 100 percent of its potato acreage by 2030.
The partnership is one of the ways the bank is helping deliver a total commitment of £6.7billion of lending to farmers which includes the £1.25billion lending package that it announced last summer in support of the sector and the challenges posed by inflation.
To provide the tools and platforms needed to measure data, NatWest has chosen Google Cloud in conjunction with Climate Engine’s SpatiaFi software, to harness geospatial analytics to automate key climate related data and link defined fields and property to a customer’s registered address.
This aims to help farmers build a tailored picture of the challenges they are up against, from flood and drought risks to biodiversity.
This will then help them identify, track and respond to key areas of risk, and report more easily on common metrics.
Finally, to accelerate change at an industry wide level, the bank is also working with wildlife conservation charity WWF-UK to bring together the UK Government, food companies, farming organisations, financiers and NGOs (voluntary and social mission groups) to focus on financial and practical interventions to support farmers, such as incentives for them to collect data and adopt common metrics.
Alison Rose DBE, NatWest Group‘s chief executive 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 percent in the mid-1980s – it is clear the industry needs collective action for a sustainable and secure future.
“We will continue to stand by farmers to invest in their transition, while continuing to focus on financial solutions and partnerships, such as those with McCain, WWF-UK and Google.”
“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,” warned Minette Batters, National Farmers’ Union president.
“The industry, stakeholders, the 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.”
Published at Wed, 17 May 2023 09:18:00 +0000