Credit squeeze getting worse as pressure intensifies

Farmers have spent thousands extra on additional feed and it is this expenditure that is now causing problems

The wider banking crisis and the plight of homeowners unable to meet their mortgage repayments is rightly a matter of much discussion in the media. It tends to mask, however, the difficulties caused by a general credit squeeze on business and farming.

The main banks have been quick to argue that they have ring-fenced hundreds of millions for farm loan consolidation, farm development and land purchase. This is true, but the funding tends to be more readily accessed by a small cohort of the most progressive or financially strong farmers. In any event, the credit squeeze is not all about banks; it is also linked to the relationship between farmers and their other traditional creditors, such as merchants who supply them with feed, fertiliser and hardware, and co-ops.