Triodos bank has set up a new lending initiative to help farmers overcome the costs associated with converting to organic cereal production. The bank specialises in ‘ethical lending’, and has set aside five million pounds for conventional cereal farmers converting to organic production. It will lend at 1% over the Bank of England base rate, which is currently 0.5%. Farmers can borrow up to £500,000 at the preferential rate, but may also be able to borrow more at normal rates.
The bank lends £36m to organic food and farming businesses, up 20% in the first quarter of 2009.
If successful the initiative could support an extra 10,000 acres of new organic cereal production, equivalent to 10% of the UK’s total. compared with normal market rates farmers could also save £160,000 over the space of three years.
Ian Price, manager of Triodos’ Farming and Food team said: “Farmers have been affected by the credit crunch, so this package will remove one of the reasons for non-conversion,” . “We hope this will also encourage the organic sector to address market awareness issues and continue to press home that technical challenges can be overcome.”
For more information and to visit the Triodos website please click here.