While most farmers recognise the importance of mitigating and adapting to climate change, Adam White, Head of Agriculture at Barclays Business Banking, told 8point9, that for many farmers, restoring nature is currently taking precedence over reducing greenhouse gas emissions.
Discussing the roll out of farmer discounts for the Barclays Green Loans for Business, White said, “Being a farmer means shaking hands with nature. Certainly the farmers I talk to and spend time with want to be stewards for their land and that means ensuring wildlife and ecosystems continue to thrive. Biodiversity has obviously got lots of impacts on those farms – it’s not just the joy of having nature in your garden. [Biodiversity loss] is making farms more vulnerable to things like pests and pathogens and in particular crop failure through loss of pollinators.
“There’s definitely a desire among farmers to both reduce emissions and promote by diversity. Our research showed that 83% of farmers consider that improving nature and diversity is important for the future of their farms – and at this point biodiversity is actually taking precedence over reducing greenhouse gas emissions.”
White also recognised that there was a perception among some farmers that banks were poorly set up to lend to regenerative and agroecological innovators. However, he said that there had been a substantial effort across the banking sector to adjust their knowledge and financial modelling to address this.
He said, “18 months ago I was at an event and somebody from within the agricultural industry said, ‘a lot of farmers that we’re talking to are concerned about talking to their banks about regenerative agriculture because they think it’s new; it’s different – you don’t perhaps understand it – it’s going to have an impact on land values; on profitability.’ I was shocked because we absolutely want to be having those conversations and understanding them.
“Over the last two years we’ve done a huge amount of training and up-skilling with our relationship managers to really get them to understand what are the core principles, what are the things that farmers would be looking to do differently.
“We’ve showcased examples of farms from the dairy and poultry sector and also the arable sector who have gone on this journey and some of the experiences they’ve had. Being pioneers, you tend to learn all of the mistakes first, so they’ve been fantastic.”
Barclays is also using on-farm events to help build knowledge and enable conversations.
White said, “We’ve also rolled out a series of farm-to-farm events where we get a small group of 20 farmers and the local team of relationship managers and we actually go and see what a farmers done in terms of changing towards regenerative on their farm. It becomes a safe space to have a conversation about, ‘What did you do? What went wrong? What went well? Would you have done it again? What would you have done differently?’ That’s great learning for everybody.”
White explained that whether a farmer is working in a mainstream or regenerative farm business, whether they own their land or not, the key issue that banks will consider is the ability to repay a loan.
He said, “The key decision for us is affordability. We understand the volatility of the agricultural markets and we always take a long-term view of that. Barclays has been working with agricultural businesses for over 275 years, so that’s not something that unique to the current time in.
“Understanding a farm business plan is vital to the process and that plan will always be unique to that particular farmland and the challenges that they have; the sector that they’re in, the performances of that sector, where the opportunities are. Key for us is working with our team of agricultural relationship managers – they’re experts, they understand how the benefits of what that client is looking to invest can be realised.”
You can watch the full interview here