“Farming went through its own recession for a number of reasons between 1998 and 2004, but is historically an extremely resilient marketplace” he says, sharing the results of recent discussions with farming clients. “A weak pound has given us great meat export prices, people still need to eat, and the weather this season is promising a good return.”

To back this up he predicts that AGF, a group comprising 15 agricultural equipment finance brokers covering the length and breadth of the UK, is on target to process similar or improved levels of business to the €100 million it reported for its first full year of business in 2008.

The group was formed, with all members included as partners and shareholders, in response to a change in the agricultural finance market in early 2007. Virtually all funders in the sector except the captives of AGCO, Case New Holland, John Deere and Claas had withdrawn from direct finance sales, says McCarthy, leaving several manufacturers and dealers looking for finance providers that understood the sector.

AGF was quick to pool the resources of its members and fill the breach – but had the banks been right to leave?

McCarthy answers by quoting a well known statistic in his marketplace; that only around seven percent of the agricultural industry’s net worth is borrowed money. This, he explains, greatly reduced the impact of the credit crunch and subsequent bank paralysis on the industry compared to more credit-driven sectors such construction or haulage. Agriculture, he stresses, is a remarkably low risk area.

At the same time, he says, the credit appetite of the farm sector is constant and consistent, being mainly based on machinery which is highly specialised and in need of regular replacement – and thus well suited to finance and leasing.

In addition, he comments, there are ways in which the global recession has actually aided business. The slowdown in CEE and Asian markets has seen less demand for equipment in those regions, leading to a greater availability for British dealers and importers.

“The banks, however, hit by losses in other assets such as construction, property, and commercials, have tended to look at everyone in the same light and tightened things up across the board.” Says McCarthy. “We have repeatedly said: ‘look at this as a separate industry and a separate finance market, with a lower risk customer profile’, but to no avail.”

Looking forward to the rest of 2009, McCarthy notes that some new equipment prices have risen by as much as 20 percent recently – a good sign for residual values, if second-hand values manage to keep pace, he says.

As in the rest of the industry, it seems vendor partnerships are in favour in agriculture too – in the wake of agreements with baler maker Big Bale a year ago and Combine Harvester dealership Kevin Kirby in January, the group is on the verge of finalising a sales-aid venture with a leading milk equipment manufacturer.

AGF is also looking to expand the range of services it can arrange for farmers, by further strengthening a partnership with agricultural insurance specialist Farm & General.

Contributed by: Fred Crawley, Reporter – Leasing Life & Motor Finance