NatWest is making loan repayment holidays, interest rate reductions and temporary emergency lending with no arrangement fees available to farming customers, as drought conditions across large parts of the UK cut crop yields and put pressure on farm cashflow.
The bank said its specialist agriculture team is proactively contacting customers. Further support for eligible farming businesses includes overdraft help, working capital facilities and funding for resilience investments such as water storage and reservoir projects that capture water during wetter months for use in dry periods.
The move follows official drought declarations covering much of the country. The Environment Agency said on 10 August that 71.3 per cent of England is now in drought after the driest July in 190 years, with farmers reporting their earliest harvests in 20 years and reduced yields, and livestock farmers beginning to use winter forage stocks early because of poor grass growth.
NatWest said it is not currently seeing a significant increase in demand for support, but expects enquiries to rise later in the season as farming businesses assess the financial and operational effects of the prolonged dry weather.
According to the bank, arable farmers are facing lower yields and earlier harvesting, while livestock businesses are contending with reduced grass growth and increased feed costs. Water availability and irrigation restrictions are affecting some operations, and warmer conditions are increasing the risk of disease outbreaks that can affect livestock productivity and farm incomes.
Farmers had warned as early as the spring that dry conditions were already hitting UK crop production, with the National Farmers’ Union reporting that some growers had started irrigating weeks earlier than usual.
Ian Burrow, head of agriculture at NatWest Group, said: “British farmers are increasingly being forced to manage the consequences of weather extremes, from flooding one season to drought the next. The challenge for many businesses is no longer simply recovering from a single event but building resilience for a future where these conditions are becoming more frequent.
“While we are not yet seeing a material increase in demand for support, we expect pressures on some farming businesses to build over the coming weeks and months. With harvests progressing earlier than usual in some areas and livestock farmers already relying on winter feed stocks due to poor grass growth, cashflow and feed availability could become increasingly challenging. Through our network of named specialist agriculture Relationship Managers, we’re ready to provide tailored support and guidance to customers as those pressures emerge.”
The bank said its network of named agriculture relationship managers gives farming customers a dedicated point of contact with sector expertise.
Farming minister Stephen Morgan said: “I know how difficult these dry conditions have been for farmers, and it’s good to see NatWest stepping up support for their agricultural customers at this critical time. Through the National Drought Group, we are working hand-in-hand with industry, the Environment Agency and the water sector to help farm businesses manage today’s pressures and build long-term resilience. I’d encourage any farmer struggling with the impact of drought to speak to their bank and explore what support is available to them.”
The dry summer adds to pressure on a sector still recovering from 2024, when the second-worst wheat harvest on record left farmers facing an estimated £600 million hit, according to the Energy and Climate Intelligence Unit.
NatWest is encouraging agricultural customers experiencing financial pressure because of the drought to contact their relationship manager as early as possible.
