In a world where product prices are regularly moving up and down, agricultural markets are characterised by volatility in price of outputs and inputs.

In the past, this has made it difficult for many farming businesses to raise the finance necessary in order to support their operations and growth.

It is now critical for lenders to adopt a broader view of the market through analysis of five-year averages, for example, instead of the cyclical and more immediate periods of highs and lows.

However, diversification of farming enterprises has been a prominent catalyst to the overall growth of the sector. Businesses which are more efficient and multidimensional weather difficult trading periods more successfully. We’re seeing more farmers recognise the need to diversify their business and progress at the same rate as technology. For example, some clients are moving away from specialist land based businesses to more vertically integrated contracts with large scale agri-food businesses.

These businesses manage the volatility of input and output prices for a farm business while guaranteeing a management fee for their time and capital investment.

Enabling this growth of integrated operations and expansion into new specialties such as poultry for meat and eggs or pork, requires lenders to take a holistic view of the sector. This new style of business will change traditional income sources, income flow and influence growth projections.

Despite a move away from the traditional, these strategies ultimately strengthen the foundations of farming businesses, safeguarding them against up and downs.

Volatility is an inevitable repercussion of an industry so dependent on factors out of its control, ranging from the weather to Brexit. However, the industry is protecting its future through diversification to safeguard against its cyclical nature. Lenders should follow suit by looking beyond the here and now and investing in the future.

*Nigel Young is one of three specialist HSBC agri managers in NI. In December 2016, the bank had 10.2% of lending in the NI agri market, a major increase from less than 0.5% held in 2006. This week HSBC announced a £300m fund to support agribusinesses in the UK