In a year when funding by the Agricultural Mortgage Corporation (AMC) for farmers across the North of England reached record levels, the team at Carter Jonas in York has been recognised as one of the top performing AMC Agency offices in the UK.
The York-based team of specialist rural agents have been providing farm and rural finance through AMC since its inception in the late 1920s, with the last year having been one of their busiest by far.
“The demand for borrowing has been as high as I can recall,” said Andrew Fallows, Partner and Senior AMC Agent at Carter Jonas’ York office. “I think this reflects the key drivers of the agricultural sector over the past year. Farmers have faced significant increases in fuel and fertiliser costs and the level of working capital needed to ensure these businesses operate effectively rose accordingly.”
The land market was also very buoyant during 2008, with good quality, productive farm land in high demand, driving average prices to over £5,000 per acre, with some sales of commercial land in 2008 exceeding £7,000 per acre.
“It is not surprising then, that over 35 per cent of our lending last year was for land purchase,” said Andrew. “With a similar amount (34 per cent) of lending being provided for farm inputs, working capital and improvements as farmers seek to reinvest in their businesses for the long-term.”
“Of course, the credit crunch also impacted in the latter part of the year and as some of the banks came under pressure to change the terms of their lending arrangements, particularly overdraft facilities, we saw an increase in the demand for funding as farmers looked to re-finance away from other less competitive sources,” continued Andrew.
“The coming year will certainly be interesting and I see no reason why the demand for capital will be any less intensive and the supply and demand balance will likely be quite sensitive. Additionally, with interest rates likely to continue at low levels during the remainder of the year, now would be a good time for farmers to consider fixing their long-term borrowing interest rates.”