FARM FINANCE

Press, Volume XCIII, Issue 28002, 23 June 1956, Page 7

FARM FINANCE

LOAN FACILITIES IN BRITAIN

In England and Wales long-term finance for agricultural properties is provided by the Agricultural Mortgage Corporation, which is empowered to grant long-term loans on the securities of properties (a) on first mortgage of agricultural land and (b) in recent years on major improvements to agricultural land and buildings. The corporation’s funds are derived mainly from the proceeds of various issues of debenture stocks which are subscribed by the public and are repaid by the operation of sinking funds.

The corporation’s reserves include a guarantee fund for which it may raise money under the Agricultural Credits Act. 1928, and the Agricultural (Miscellaneous Provisions) Act, 1944, in the form of interest-free loans from the Government up to a total of £2.500.000.

In Scotland In Scotland loans on favourable terms for agricultural purposes on the security of agricultural land are granted by the Scottish Agricultural Securities Corporation, Ltd., a limited company set up in accordance with the provisions of the Agricultural Credits (Scotland) Act, 1929. Both of the corporations at present receive grants from ' the Treasury towards any deficit in their respective annual profit and loss accounts.

Landowners in England and Wales may also obtain loans for certain improvements to agricultural land and buildings from the Lands Improvement Company. The amount of the loan is charged on the land improved, in the form of a terminable rent-charge payable half-yearly for a period not exceeding 40 years. These loans require the sanction of the Ministry of Agriculture, Fisheries and Food, but the Ministry does not itself provide the funds. The State makes substantial contributions towards the cost of land drainage and water supply in Britain. In England and Wales, for example, under various Acts, grants for farm drainage may be up to 50 per cent, of the approved cost; for main river drainage they can range up to 80 per cent. Farm water supplv grants are at the rate of 25 per c*ent. of the approved cost where the connexion is to a public main and 40 per cent, where a private source is used. Separate legislation provides grants for these services in Scotland and Northern Ireland.