Farm debt in Scotland has increased by 4% over the past year, taking total debt levels to their highest since the late 1980s.
According to the latest government survey of the country’s main banks and other lending institutions, outstanding loans to Scottish farms rose by £73 million in the year to May 31, 2015. This left total outstanding loans to the agricultural sector at £2.03 billion.
“This was the sixth consecutive annual increase in Scottish farm debt,” reported the government. “Taking into account the effect of inflation, debt peaked in the mid-1980s at around £2.5 billion, before high inflation rapidly eroded the value of the sector’s outstanding debt. After remaining steady for a decade during the 2000s, debt levels have now risen to their highest since the late 1980s.”
Scotland’s cabinet secretary for rural affairs, food and the environment, Richard Lochhead (pictured above), said the debt figures showed there was “no doubt” that farmers are going through a tough time at the moment due to volatile market conditions compounded by the recent poor weather conditions.
“However, these statistics, which show that banks are still lending to farmers, suggest their continuing confidence in this sector,” he said.
He also commented that ministers were “redoubling their efforts” to help our farmers get through the current challenges to brighter times.