British banks are introducing support measures for farmers amid severe drought

According to the Energy and Climate Intelligence Unit (ECIU), the current season could be the worst for harvest volumes in history. Losses for British grain and oilseed crop producers are expected to reach £390 million, with total production falling by 2.5 million tonnes. In the livestock sector, challenges are linked to slower grass growth, forcing farmers to use winter feed stocks earlier than usual and increase procurement costs.

Major financial institutions, including NatWest and Lloyds Bank, have begun implementing anti-crisis programs. Measures include credit holidays, emergency overdraft facilities, advisory support, and funding for investments in technologies that reduce the dependence of agricultural enterprises on drought. Ian Burrow, head of agriculture at NatWest Group, noted that businesses are facing not only the consequences of the current season but also the need to adapt to increasingly frequent climate extremes.

Although no sharp increase in requests for financial assistance has been recorded so far, banks anticipate a rise in pressure as the season progresses. Parallel to production difficulties, market participants expect consequences for the consumer sector. Tim O’Malley, chairman of Nationwide Produce, warned of possible price increases and smaller vegetable sizes in retail chains, which is linked to lower yields and the quality characteristics of the grown crops.

The situation is complicated by temperature conditions: according to the Met Office, the current summer could be the hottest on record. The average temperature from June 1 to date is already 1.88°C above the 1991–2020 climatic norm. Agriculture Minister Steve Reed (Stephen Morgan) has called on farmers facing the consequences of drought to contact banks to discuss available financial support tools.