Farmers are being offered fee-free lending, financial support and resources for agroforestry projects over £25,000.
Lloyds Banking Group says the deal is available through its Clean Growth Financing Initiative (CGFI), which aims to help farmers reduce their environmental impact.
“Integrating trees with crops or livestock can help boost overall farm income and resilience,” said Lloyds agriculture sustainability director Ben Makowiecki.
“Agroforestry can significantly enhance farm productivity through higher land equivalent ratios (LER) compared to single crops, potentially achieving 120-140% productivity.”
“This makes the land work harder, utilising vertical space, while bringing broader benefits, including increased biodiversity, enhanced soil health, improved water management and shade for animals,” said Mr Makowiecki.
Thorough financial planning and projections to demonstrate profitability and debt serviceability are vital for these types of projects, he added.
“We’ll fund agroforestry in the same way as other sustainable farming projects through CGFI, but it’s crucial to have a clear, comprehensive plan,” said Mr Makowiecki.
“This ensures all aspects of the project, from initial costs to long-term maintenance and market considerations, are thoroughly accounted for.”
Tips for farmers considering agroforestry projects include forecasts and budgets up to the time trees start producing commercially viable fruit. Financial planning is important beyond this phase.
“Think about ongoing pruning and maintenance, replacing dead trees, and ensuring a defined market is in place for new produce,” said Mr Makowiecki.
“If you’re growing fruit or nuts for the first time, you may need extra grading or packing and storage equipment. Also, budget for new trees and identify end uses for timber as the agroforestry area expands.”
Profitable farming
The Lloyds Banking Group remained committed to offering farmers guidance to help implement more sustainable, profitable farming practices, said Mr Makowiecki.
To accelerate this transition, the bank had partnered with Soil Association Exchange (SAX) – a farm assessment tool and consultancy service – funding access for existing clients.
Using SAX, farmers could assess their current environmental impact and evaluate where to bring in on-farm changes while identifying funding options. This could help open up investment.
Sources could include combining sustainability-linked bank lending alongside schemes such as Sustainable Farming Incentive or the Woodland Trust MoreWoods scheme, sponsored by Lloyds Bank, which covers up to 75% of planting costs.
Trust promotes Trees for Your Farm scheme
The Woodland Trust’s Trees for Your Farm scheme has provided funding advice to help farmers set up agroforestry systems since 2013.
Funded by Sainsbury’s, the trust has helped create over 260 schemes and raised the profile of agroforestry. It also offers up to 100% funding support where appropriate to farms which meet its criteria.
The trust has called on the government to accelerate planting rates by announcing increased investment in this autumn’s spending. It also wants significant improvements in restoration and protection for existing woods and trees.
Agroforestry can maintain or even enhance the farm’s main agricultural output while improving the resilience of the business, says the trust. At the same time, it can help to protect soils, rivers, biodiversity and the climate.
Trees and shrubs are a critical tool in supporting the farm with changing weather patterns, says the trust. But only 3% of the UK’s farmed area practises agroforestry – less than half the European average.
Systems can be designed to avoid the potential trade-offs that occur in many modern farming systems between food production and public goods, like clean air. “It’s a win-win for farming and the environment,” says the trust.
