Welsh farmers offered 3% loans worth up to £1m

Nation.Cymru staff

Welsh farmers will be able to apply for low-interest loans of up to £1 million from this week under a new Welsh Government scheme aimed at supporting investment in more sustainable and productive farm businesses.

The £5 million Sustainable Agriculture Loan Scheme (SALS), which opens on 1 July, will offer fixed-rate loans at 3% interest to help farmers fund projects including renewable energy, energy efficiency, new equipment, waste management and improvements to farm buildings.

Delivered by the Development Bank of Wales, the one-year pilot will provide loans ranging from £25,001 to £1 million, with repayment terms of up to 15 years. A repayment holiday will also be available, while seasonal repayment options are being considered to reflect farming cashflow.

The Welsh Government said the scheme was designed to help farms invest in long-term resilience at a time of rising energy and input costs, while supporting wider goals around decarbonisation and sustainable land management.

Speaking ahead of the NFU Sustainable Farming Conference, Cabinet Minister for Rural Resilience and Sustainability Llyr Gruffydd said the upfront cost of investing in more sustainable farming could be a significant barrier.

“Welsh farmers are ambitious and forward-thinking, but the up-front cost of investing in a more sustainable, resilient future can be a real barrier.

“This scheme reflects our commitment to support the agriculture sector in a way that underpins the long-term sustainability of farm businesses and promotes innovation and growth.”

Giles Thorley, chief executive of the Development Bank of Wales, said access to affordable finance had long been a challenge for many rural businesses.

“Rural Wales is full of ambitious businesses looking to invest, adapt and build long-term resilience, but access to the right kind of finance has often been a challenge.

“The Sustainable Agriculture Loan Scheme is designed to provide practical, affordable support for on-farm projects looking to support improvements in productivity, reduce energy costs and invest in more sustainable operations.

“This is about helping Welsh farms to invest for the long term while supporting the wider rural economy, local supply chains and the transition to lower-carbon agriculture.”

To be eligible, businesses must carry out agricultural or related activities on land in Wales and either farm at least three hectares of eligible land or demonstrate more than 550 standard labour hours a year.

The Welsh Government said up to £5 million would be available through the pilot during the 2026-27 financial year, with the scheme intended to test demand for long-term agricultural finance.