Low-interest bank loans to reduce emissions

• Flexible terms based on cash flow

• Reduce greenhouse gas emissions

• Remain profitable and sustainable

Farmers working to improve soil health can take advantage of a new loan agreement with preferential interest rates.

Launched by Oxbury Bank, the Transition Facility aims to help farmers continue farming profitably while changing their management practices to reduce carbon emissions and boost their resilience.

Rewarding change

Available from an interest rate of 1% over the Bank of England base rate, the loan is versatile and can be used for any purpose. It can be drawn down and repaid continuously over period of up to six years.

Speaking at last month’s LEAF conference, Oxbury co-founder and managing director Nick Evans said the bank wanted to incentivise and reward farmers who made sustainable changes.

“Oxbury spent two years developing the Transition Facility ensuring that it understood the needs of farmers and the supply chain,” he told the LEAF audience of farmers, industry leaders and academics.

“The bank concluded that the whole industry including government, banks and the supply-chain needs to work together to support farmers to remain profitable while reducing emissions and improving soil health.”

Cashflow and capital

The facility provides funding for farmers to manage their cashflow and capital needs while increasing their resilience by reducing carbon emissions, improving their soil health and boosting soil organic carbon.

Its launch follows independent research by the Soil Association Exchange showing that 77% of farmers who have decided to transition have little or no financial flexibility to adapt their farming systems.

With climate change pressures and demands from government and supply chains, Mr Evans said Oxbury recognised the need for farmers to obtain the necessary funds to change their farming practices.

The loan facility operates alongside other financing initiatives – including government grants and private sector payments for farming practices – creating a blended finance model to extend the impact of multiple partners in the value-chain.

Farmers already making changes will need to provide Oxbury with documentation showing what they have done. Farmers who are planning to make changes must provide budgets and other evidence for the changes to be made.

For full details about the Transition Facility, visit oxbury.com

Flexible approach measures carbon levels

As well as giving farms access to finance, the Oxbury Transition Facility helps farmers prove that any changes are delivering results.

Carbon footprints will be measured at the start of the facility and will be ongoing to assess reductions in emissions. Satellite imagery and soil testing will measure improvement in soil organic carbon levels.

Oxbury has partnered with Downforce Technologies to calculate the annual average soil carbon levels across more than 120,000ha of farmland. This will help farmers track the outcomes of transition actions on soil health.

While there are existing facilities for farmers to fund specific sustainable projects, Oxbury’s initiative allows farmers to take a range of actions over time and understands that the benefits will be gradual.

Customers can use the facility in the way they deem most appropriate for their transition. This could cover for instance input costs, general working capital, infrastructure or machinery.