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Innovation Needed to Tackle Horitcultural Challenges

British horticulture businesses face a challenging winter due to soaring borrowing costs. With the Bank of England maintaining high interest rates, many growers, especially those with variable-rate loans, are struggling with debt.

The delay in anticipated interest rate cuts has exacerbated these financial difficulties. High winter operational costs combined with low revenue have forced many growers to make tough decisions, such as mothballing greenhouses and postponing development projects.

"It's a mixed bag," says Chris Primett from Malcolm Scott Consultants. "Larger garden centres are struggling, while some smaller ones are still finding ways to grow."

To cope with these financial strains, innovation is crucial for the horticultural industry. Embracing new technologies and methods can help reduce costs and increase efficiency. Industry consultant Neville Stein advises securing long-term fixed-rate funding to mitigate the unpredictability of fluctuating interest rates. Derek Jarman of the British Ornamentals Association highlights the necessity of borrowing for many growers to cover winter running costs, suggesting innovative financial products and services could offer more stability.

Lee Stiles from the Lea Valley Regional Growers' Association and Peter Burks from the Garden Centre Association both echo the preference for fixed-rate loans and the need to minimise extra costs. They emphasise the importance of innovation in financial planning and operational strategies to navigate these tough times.

Economist Mark Berrisford-Smith cautions against premature interest rate cuts. Despite easing inflation, underlying pressures, particularly in the services sector, remain high. Any rush to lower rates could backfire, making it essential for horticultural businesses to innovate in managing their finances and operations.

In this challenging economic climate, horticulture businesses are tightening their belts and focusing on careful cash flow management and strategic planning. Innovation, whether in financial strategies or operational efficiencies, will be key to their survival and future growth.


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