At 15:48 on 22 September, England’s second Sustainable Farming Incentive application window closed. It had opened that same day. A farmer considering an investment with a decade of repayments had only part of a day to apply for support that might strengthen the business carrying them. Defra’s announcement supplied the closing time with uncomfortable precision.
The cows still needed milking. The borrowing decision remained.
In June, I wrote that “a sector becomes profitable when its risks are organised, not when its farmers work harder”. That was the central argument of my Farming Roadmap essay. The next question is what that organisation looks like on a lending proposal.
The western test case
Britain’s western farming country is a useful place to begin. The South West generated 19.8 per cent of England’s Total Income from Farming in 2024. Across the Bristol Channel, South Wales shares the business of converting grass, weather and daily husbandry into saleable food.
But a shared landscape does not mean a shared policy. England’s SFI26 has a £100,000 annual agreement ceiling. Wales began its separate Sustainable Farming Scheme in January, with entry to its Universal Layer non-competitive for farmers meeting the requirements. A lender working across the Severn must understand both systems, including when support becomes dependable income.
One landscape, two rulebooks. The divergence matters most at the point where a lender has to decide whether support counts as dependable income. Sources: Defra, Welsh Government, UK Government.
Succession brings another claim on cash. Since April, full agricultural and business property relief has been limited to a combined £2.5 million allowance per person, with unused allowance transferable between spouses or civil partners. Qualifying assets above it receive 50 per cent relief; eligible tax can be paid over ten years interest-free. The government’s rules make careful planning essential.
Borrowing may form part of that plan. It should follow an assessment of the liability and payment options, alongside clarity about who will run the farm.
What western farms will borrow for
Over the next five years, I expect western lending demand to gather around three purposes: keeping farms operable, reducing exposure to volatile costs and finding a better-paid route to market.
Three investment purposes, three different tests. Source: author’s analysis. This is a conceptual framework, not a forecast of lending volumes.
Slurry storage belongs chiefly to the first. Its return includes the ability to continue farming responsibly, protecting water and retaining nutrients. That requires a different appraisal from an investment promising additional sales.
Housing, handling and storage at Harper Adams. The least glamorous category of farm investment, and often the one that decides whether the business can keep operating at all.
Robotic milking and on-farm energy need closer examination of the second. Automation can release labour and make family life more manageable. But hours released are not automatically wages saved. Solar generation should be modelled against the farm’s actual electricity demand, connection costs and export terms.
Diversification carries the third promise, and some of the greatest scope for disappointment.
In The Litre Under Pressure, I examined how processing could return more value to dairy. The financing consequence follows: a fermentation room needs working capital, food safety systems and customers alongside its equipment. A vineyard needs distribution long before its first attractive label. My enterprise work at Harper Adams repeatedly brought me back to that gap between something worth making and a business capable of selling it.
Milk vending at Fodder, the Yorkshire Agricultural Society farm shop in Harrogate. A route to market is a capital decision as much as a marketing one.
Not every farm should become a processor. Shared facilities may make more sense than several neighbouring businesses borrowing to duplicate them.
The contract behind the shed
Poultry shows how a buyer can change the investment case. Lidl’s £1 billion British egg commitment, announced in 2024, included long-term cost-of-production contracts, minimum volumes and assistance securing bank finance for its free-range producer group.
The headline describes a commercial commitment. The financeable mechanism sits underneath it: greater visibility over what the farmer will sell and how payment will be calculated.
I saw the same principle in Indian poultry. Smallholders became bankable when finance, inputs, technical support and a buyer were assembled around production. The farmer’s capability mattered. So did a structure that made the risk intelligible to a bank.
There is a qualification. Integration can concentrate bargaining power. A long contract offers little comfort if its price can change unilaterally while the farmer remains responsible for the shed and the debt. Lenders must read the termination clauses as carefully as the projected volumes.
Model before buying
The same discipline belongs in technology investment.
A farmer under pressure is an attractive customer for anyone selling efficiency. Having worked on the commercial models behind technology adoption, I want to see installed cost, maintenance, useful life, labour actually displaced and the margin left when output prices fall. The model should also test a cheaper alternative, shared ownership and postponement.
Sometimes the most valuable result is deciding to buy nothing yet.
That does not make caution a complete strategy. My Rainfall Assumption essay examined how soil, water and contracts shape exposure before a difficult season begins. Investment that protects cash in a bad year deserves recognition.
The Lloyds and Wildfarmed Food & Nature Resilience Fund, announced in June, points towards a broader payment model, bringing businesses together to reward verified environmental improvements alongside production. Its significance lies in asking beneficiaries beyond the farm gate to contribute. Its performance will need to be demonstrated.
A better bargain for farm finance
Farmers should demand repayment schedules grounded in realistic cash generation. Lenders should examine the buyer, pricing formula and downside margin alongside land security. An uncontracted carbon estimate cannot service a loan.
The West’s missing investment may sit between farms: processing, storage, distribution and the people who secure customers. Agricultural universities can help test the economics and assemble the partners.
Back at the kitchen table, the equipment quotation is only one document. Beside it should sit the market agreement, the downside forecast and a clear account of who carries the loss.
That is the better bargain western farming needs. It is also how a farmer begins to borrow against next year with something other than hope.
Sources
- Defra, SFI26: Window 2 now open, 22 September 2026. Confirms the opening date.
- Defra, SFI26: Window 2 now closed, 22 September 2026. Records closure at 15:48 and explains that applications remain subject to eligibility and available budget.
- Defra, Total Income from Farming in the regions of England in 2024. Source for the South West’s 19.8 per cent share of England’s aggregate farming income.
- Defra and Rural Payments Agency, SFI26: scheme rules and guidance, sections 1.2 and 2.2. The £100,000 annual ceiling and one-agreement limit apply to SFI26 agreements.
- Welsh Government, Sustainable Farming Scheme: farm support is changing. Scheme commencement, eligibility and non-competitive entry to the Universal Layer.
- UK Government, What are the changes to agricultural property relief?. Combined agricultural and business property relief allowance, transferability, relief above the allowance and interest-free instalments.
- Lidl GB, Lidl injects £1 billion into British egg sector as free-range sales boost category growth, 26 September 2024. The commitment runs over five years; the announcement describes producer contracts, minimum volumes and finance assistance.
- Lloyds Banking Group, Lloyds and Wildfarmed launch Food & Nature Resilience Fund, 29 June 2026. Primary announcement of the fund and its intended environmental and commercial model.
- Melvin D’Souza, Farming Roadmap 2050: What It Means for Farmers and What to Do Now, Planet Earth Rise, 30 June 2026.
- Melvin D’Souza, The Litre Under Pressure: Can Value Addition Rescue British Dairy?, Planet Earth Rise, 9 July 2026.
- Melvin D’Souza, The Rainfall Assumption: What Britain’s Driest July Taught Its Farmers About Water, Planet Earth Rise, 8 August 2026.
Policy details and sources checked on 23 September 2026. The lending outlook and investment judgments are the author’s analysis. The South West income share refers to England’s Total Income from Farming for 2024, not UK output. Lidl’s commitment was announced in 2024 and is not a loan fund. The Lloyds and Wildfarmed announcement dates to June 2026; environmental outcomes are its aims rather than demonstrated fund performance. Photographs by the author at Harper Adams University and Fodder, Harrogate.
Farmer, manufacturer, winemaker and restaurateur across three food systems. He writes Planet Earth Rise twice a month. About Mel →
