Wednesday, November 5, 2008

This cannot be good

Farm borrowing at record levels

Farmers are borrowing money at record levels as higher dairy prices and better harvests encourage them to buy land and new machinery. However, analysts also said that volatility in grain prices and rising fuel and fertilizer prices had increased overdraft borrowing. Figures from the Bank of England showed that lending to the farming industry stood at £10.6bn in the third quarter. Lloyds TSB said that the figure was an all-time high.

Posted by mark @ 12:48 PM (436 views)
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4 thoughts on “This cannot be good

  • planning4acrash says:

    Classic stuff, the boom in food prices, itself speculative, will lead to the next ponzi scheme. We may well be discussing the great foodprice crash, farmers out of business everywhere, come next fall. When will government sit in the norty chair and stop meddling with the free market?!

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  • Next fall??

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  • Agriculture is not the next ponzi scheme because it is based on sound fundamentals. Unless you haven’t noticed the worlds population is still growing and many of the world’s poor are slowly getting beyond a subsistence life style.

    A friend of mine said there were more people alive today than humans that have lived in the past. I don’t think this is true, but it can’t be far wrong. As a species our population has exploded exponentially in the past hundred years.

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  • As a farmer I would say that most farmers are better placed to deal with hard times than the rest of the economy. Obviously people have to eat so demand for food won’t be affected as much as cars or holidays or electrical goods. Also as most farms are (by other standards) small businesses they are used to make-do-and-mend policies, buying 2ndhand equipment, repairing old, even building their own. Farmers are very resourceful people and have not had the same boom times over the last 10-15 years that other sectors of the economy have so, despite this increase in borrowing, are better placed to ride out the current crisis.

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