Outstanding debt of Scottish farms has risen over the past year, according to a release from Scotland’s Chief Statistician.
The latest results from the Survey of Bank Advances to Scottish Agriculture have revealed that outstanding bank loans to Scottish farms rose by £53 million in the year to 31st May 2013.
Total outstanding loans to the agricultural sector amount to £1.72 billion. Accounting for inflation, this is an increase of 1% 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. According to the Chief Statistician, the latest figures represent a real terms decrease of 2% 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.
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