NFU urges banks to assist farmers in cashflow crisis

The NFU has held meetings with representatives from banks to discuss ways they can support farmers facing a growing cashflow crisis.

The agriculture sector is under severe financial strain, following the unexpected suspension of Defra’s Sustainable Farming Incentive (SFI) scheme to new applicants last week, which had become a key financial pillar for thousands of farmers in England.

NFU deputy president David Exwood expressed regret that such a meeting, on Tuesday (18 March), was necessary.

See also: Farmers share how bombshell SFI closure will affect them

“The sudden closure of the SFI was a shock to everyone, especially when confidence was already at an all-time low,” he said.

“Farmers were relying on the scheme to continue their work as both countryside stewards and food producers.”

Mr Exwood added that there was clear agreement at the meeting that trust between farmers and the government had been “severely eroded”.

Many farmers now feel they cannot rely on government schemes and are scaling back their environmental goals just to keep their businesses afloat.

With cashflow becoming a major issue, Mr Exwood urged farmers to engage in conversations with their banks, if necessary.

“The SFI has become an important cornerstone for farmers, and now the decision to close it has made an already difficult situation worse.

“Every farming business needs certainty, and that has been taken away,” he said.

“The NFU will continue to work with all stakeholders to restore stability and enable our members to continue producing food and caring for the environment.”

Phil Stocker, chief executive of the National Sheep Association, warned that the removal of SFI support, coupled with the decline of the Basic Payment Scheme (BPS), will severely impact upland and lowland farms, particularly in 2025-26, jeopardising cashflow and leaving farms in a financial crisis with uncertain bank support.

Banking recognition

The banking sector has acknowledged the financial pressure facing farmers.

A head of agriculture at one major bank said that while many farming customers had already submitted applications for the SFI before the closure on 11 March, the impact remains significant, especially for sectors reliant on BPS, such as arable, beef and sheep farming.

“Strong output prices for livestock are helping in the short term, but arable farmers may feel the pinch more due to weaker prices,” the bank representative said.

He added that it would take a long-term approach in supporting farmers, addressing working capital pressures on a case-by-case basis.

“We aim to understand any working capital pressures caused by the SFI closure and support our customers accordingly,” the representative added.

Banks are advising farmers to reassess their financial plans, explore alternative funding options and focus on strengthening existing agreements and business models. 

The banking sector and the NFU are set to continue discussions as they work together to help farmers navigate these challenging times.