Farm debt continues to rise
A National Statistics publication for Scotland.
Outstanding debt of Scottish farms has risen over the past year, according to the latest National Statistics.
Scotland's Chief Statistician today released the latest results from the Survey of Bank Advances to Scottish Agriculture which shows outstanding bank loans to Scottish farms rose by £53 million in the year to May 31, 2013.
Total outstanding loans to the agricultural sector amount to £1.72 billion. Accounting for inflation, this is an increase of one per cent since May last year.
Despite difficult lending conditions in the economy, this is the fifth consecutive annual increase in Scottish farm debt - although these recent increases remain within the typical fluctuations of the 21st century. The latest figures represent a real terms decrease of two per cent since debt levels stabilised in 1990. Real terms debt peaked in the mid-1980s at around £2.5 billion, before high inflation rapidly eroded the value of the sector’s outstanding debt.
Related evidence from the Bank of England shows that in May 2013, the UK agricultural sector (including hunting and forestry) was the only UK business area to see considerable rises in outstanding debt over the last two years. Most other business sectors saw successive reductions in debt levels.
Figures on outstanding debt in Scotland are not estimates of new loans. Information is not available to show when the loans were taken out or the associated repayment periods.
The figures released today were produced by independent statistical staff free from any political interference, in accordance with professional standards set out in the Code of Practice for Official Statistics.
1. “Real terms” means taking into account the effect of inflation. It shows, for previous years, the value of the debt expressed in today’s prices. This is because, for example, a loan of £10,000 in 1990 could have paid for something that nowadays would need a loan of £20,000, so we say the 1990 loan was worth £20,000 in today’s prices.
2. The full statistical publications can be accessed at: http://www.scotland.gov.uk/Publications/2013/09/5465
3. The release also includes a breakdown of outstanding debt by recipient type (i.e. owner occupier, tenant, contractors and livestock salesmen).
4. These statistics are used by government and stakeholders to monitor and assess the economic well-being of the agricultural sector and for policy evaluation. Further information on Agriculture and Fisheries statistics within Scotland can be accessed at:
5. More information on the standards of official statistics in Scotland can be accessed at: www.scotland.gov.uk/Topics/Statistics/About