Banks need to radically rethink how they support farmers to shift to farming systems that prioritise climate and nature, according to the farmer-led research from Soil Association Exchange.
The study spoke to more than 100 UK farmers and revealed a clear absence of financial solutions and advice that recognises the complexity of the transition they are looking to make for climate and nature.
The ‘Banking for Change: Addressing Financial Risk as a Barrier to Farm Transition’ research was led by farm environmental monitoring platform Soil Association Exchange with support from the Green Finance Institute and the British Business Bank.
Climate and nature
It found that most farmers think financial and business risks are barriers to a transition to agroecological farming systems, but access to lending itself was not seen as the primary barrier.Â
Instead, farmers highlighted the need for flexible and preferential terms on either new or existing lending, which would give them the capacity and space to navigate transition without financial risk to their farm business. This flexibility, combined with long-term business advice, was seen as essential for a successful transition.
Soil Association exchange chief executive, Joseph Gridley said:
“This research shows that while farmers are ready and willing to make changes to address climate and nature, financial barriers remain a major obstacle.Â
“Importantly, however, farmers are not simply looking for new loans. What they told us, is that they need the lending flexibility and business support from their bank to help them through the transition, because they cannot burden the financial risk.
“Supporting farmers is not just a job for government. It is clear that banks and development finance institutions have a critical role to play in helping farmers manage the risks associated with transitioning to more sustainable systems, but they need to radically rethink how they are doing it today.”
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